There are about 20/22 thousand jewellery shops in Bangladesh. Daily sale in these shops is estimated at Tk 200 million. Surprisingly, no gold is imported through letter of credit. Expatriate Bangladeshis can bring 200 grams of gold each while returning home. Businessmen, customs and intelligence officials can not provide any information about import of gold through official channels. This leads one to believe that the requirement of jewellery shops in the country is met by smuggled gold. This practice is going on for a long time.
Huge quantities of gold smuggled into Bangladesh are redirected to India through land route. India has raised import duty on gold. That is why, the criminals are using Bangladesh as a corridor. The matter has come to public attention because of large gold hauls in Dhaka and Chittagong airports in recent times. There are no rules about gold import in Bangladesh.
In many countries there is a provision of buying gold from the central bank at international price. This gold is then converted into jewellery for sale in the market. This opportunity may be given to our traders. Bangladeshi goldsmiths are more efficient than many of their counterparts in neighbouring countries. That is why, many of our goldsmiths are going to India to work in gold and diamond factories.
Gold bars can be imported with the approval of the ministry of commerce and Bangladesh Bank. This costs Tk 40,000 per 11.66 gram. For this, Vat/tax of Tk 4000 is to be paid. Such imports are not profitable for business. As a result, Bangladesh Biman has turned into a carrier of smuggled gold. It has been learnt that very often gold is detected because of internal feuds among the gold smugglers. Officials working at the airport are also suspected to be involved in the smuggling network.
It is alleged that arms smuggling is settled through gold. Hundi operators buy gold in Dubai market for onward transportation to Bangladesh. Passengers of international flight travel with domestic passengers in the same flight and the gold change hands on the plane. Customs authorities file cases against smugglers and the seized gold is deposited with the central bank but the accused often manage to get out on bail. Thereafter, they disappear. Big smugglers are never awarded severe punishment.
Scanning is done for 5.0 per cent of the luggage. It is possible that smugglers may escape scanning. It is said that the cleaners of Biman may be involved in smuggling during duty hours. Some of these staff members were dismissed after they were found guilty.
Gold smuggling is in the headlines for sometime. Gold is coming to Sylhet, Chittagong and Dhaka airports. Gold is coming in and going out. The smuggled gold is seized and deposited with the central bank. But bulk of gold is rerouted to India without anybody's knowledge. Previously, gold used to be auctioned in the central bank but this is not done anymore.
Smuggled gold is believed to be used for meeting various transaction purposes. Let us take the case of cattle import into Bangladesh. This import does not take place legally. No letter of credit is opened for import of cattle. It is possible that gold is used for payment against cattle import.
India imports lot of gold every year and exports gold ornaments. The value of Indian rupee has depreciated. Government of India has raised duty on gold import. This has increased the price of gold in India. Bangladeshi businessmen are taking advantage of this situation and exporting smuggled gold to India..
Smuggling and hundi are profitable for businessmen but the government and the country are losing. Stocking gold is a good business. Bangladesh bank buys gold but does not auction smuggled gold. A sound policy is needed for gold trade in the interest of the nation.
The writer is an economist and columnist. [email protected])
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