No gold import policy yet: smuggling galore

Shah Alam Nur | Published: December 01, 2013 00:00:00 | Updated: November 30, 2024 06:01:00

Bangladesh is yet to formulate a gold import policy. Its absence has led to a hike in smuggling depriving the country of millions of taka revenue earnings, officials and business concerns said.
They said due to lack of a government policy, jewellery businessmen cannot import gold through proper channel. This has forced the industry to depend either on smuggling or on 'baggage rules' for gold import.
'Baggage rules' allow a passenger to carry legally a fixed volume of gold or gold ornaments. A Bangladeshi can bring in 200 gm of gold. Bangladeshi jewelers depend on the expatriates who bring gold from countries like Saudi Arabia, the UAE, Qatar, Bahrain, Singapore, South Korea and South Africa.
Most of jewellers in the city said smuggled gold ornaments are available in their stores amid shortage of gold in the legal market which is based only on 'baggage rules' gold. Â
"In 1996, the Bangladesh Jewellery Manufacturers and Exporters Association (BJMEA) and the Bangladesh Jewelers Association (BJA) made a proposal to the government for enacting a policy for gold industry but till now the proposal is existing just on paper," a BJA leader told the FE.
"Our jewellery industry needs 12 to 14 tonnes of gold annually to meet the domestic demand but there is no scope for importing gold officially because of lack of a gold import policy," he said.
He said as a result, most of jewellery shops depend on smuggled bullion.
President of the BJA Dr. Dilip Roy told the FE: "Now the country's jewellery manufacturers cannot purchase gold through proper channels. So they are depending on smuggled gold, expatriate workers and travelers".
He said, "The Bangladesh government could not still formulate a national gold policy in the last 40 years. Political interference in favour of smugglers and bureaucratic tangle are two major causes behind it".
Mr Roy, also Managing Director of the Grameen Jewellers (Pvt.) Ltd said Bangladesh currently has more than 10,000 jewellers' shops with an average Tk 300 million turnover per day.
Around 1,000 jewellers' shops are located in Dhaka city alone, he said.
General Secretary of the BJS Dewan Aminul Islam Shahin told the FE, existing import policy does not permit direct import of gold. Therefore, businessman have to depend heavily on recycled gold jewellery.
Aminul Islam, also Managing Director of the Siraj Jewellers, said now the manufacturers can only import gold through opening letters of credit (LC) and has to pay 58 per cent tax, which is a lengthy and complex procedure.
Commissioner of Customs Zakiya Sultana told the FE, a sizeable quantity of gold is coming to the country but the government doesn't get import duty due to lack of import policy.
Anwar Hossain, President of the BJMEA, said the gold manufacturers 10 years ago had placed a demand to the Commerce Ministry for formulating a gold policy for keeping the market stable by releasing pure gold from the Bangladesh Bank.
He said most of the countries, including India, Pakistan and China, have formulated their own gold policies long ago.
Anwar Hossain told the FF that they want to buy gold from the international market. They have demanded framing of a national gold policy for regulating the country's jewellery market.
He said presently, the country's existing laws do not permit the traders to import gold from the international market, or to export gold ornaments.
He said if the government could make a gold policy, it would have helped the local jewellery industry flourish as a major export-oriented sector.
Former BJS President MA Wadud Khan told the FE that in 2010 their organisation wrote a letter to the then Commerce Minister seeking his urgent intervention in this connection.
He said at that time, the minister had assured them of fulfilling his earlier pledge of formulating the policy within three months, but till now they have got no result.
Mr Wadud, also Managing Director of the Chadrima Jewellers, said at that time the government also decided to make a jewellery industry policy under the supervision of the Industries Ministry immediately after formulation of the import policy.
When contacted, Industries Secretary Mohammad Moinuddin Abdullah told the FE that they don't have any file about gold policy.
He assured that he would comment after finding such proposals.
According to the BJMEA, Bangladesh's annual demand for gold was 17 tonnes (1 tonne = 1000 kg) five years back. This has now come down to 12 tonnes.