Bangladesh has seen a sudden upsurge in gold smuggling within 2013-14 through its international gateways. Gold seizures in the two airports have become a near regular occurrence. Law enforcers are apprehending gold smugglers at the country's two international airports every other day, with gold bullions being brought in primarily from the Middle East, thought to be headed towards India.
Customs officials claimed to have seized around 650kg of gold, worth an estimated $31m, in the last 15 months. According to the Customs Intelligence and Investigation Directorate (CIID), 4.3kg of gold was seized within the 2009-10 financial year, 0.35kg in 2010-11, 1.21kg in 2011-12, and 5.56kg in 2012-13.
So, the extreme rise in smuggling is fairly predictable and the reason behind it is not quite subtle. Our next-door neighbour India is one of the world's top importers of gold, but its import tariffs are much higher than that of Bangladesh.
Since the government of India raised tariff on gold to 10% in August 2013 from 2% in July 2012 to check the legal gold import to trade off a severe current account deficit in 2012, this tariff barrier cut its gold import sharply to 19 metric tons in November 2013 from 162 metric tons in May 2013.
So the supply of gold dropped but the demand has remained the same seeing how legendary the Indian market’s demand for gold is. The price of gold doesn’t plummet much in India, even when the price goes down in the international market for the stable domestic demand. Resultantly, gold smuggling syndicates are using Bangladesh as a route to smuggle gold to India across land-borders by bribing corrupt officials of Biman, customs, the immigration police, and others involved.
Being interviewed by newsmen, many customs officials admitted that the gold being seized at the airport was only the tip of the iceberg. The amount of gold seized by the officials is only a fragment of the bullion that is being brought to the country.
However, the only good here is that whatever volume of gold is being confiscated in the airports is being added in the gold reserve of the central bank, but on the other hand Bangladesh is being highlighted in the media as a safe gold-smuggling route. The syndicates are poisoning our immigration mechanism through their bribing. Our local gold businesses are losing their shares and the scope for corruption is increasing.
Reportedly, Bangladesh has 12 metric tons in annual demand of gold and that is partly met by expatriates. Travellers and migrant workers, working in Middle Eastern countries, can legally carry 200g of gold on each visit to Bangladesh. In addition to the Middle East, gold also flows into Bangladesh from Thailand, Singapore, Hong Kong, and Malaysia.
Reportedly, the jewelry market in Bangladesh is entirely dependent on smuggled gold because of cumbersome import procedures.
Moreover, the higher duty on imported finished jewelry compared to gold bars also encourages businessmen to rely on smuggled gold. India has a demand of 1,500 metric tons of gold annually, but after the tariff hike in India, Bangladesh raised its own import tariffs on gold by 20 times on July 1, bringing them in-line with those of India, thanks to our corrupt officials who appear to have done little to stem the tide.
According to the CIID, more than 4,000 people were arrested for smuggling at the Dhaka airport in the last three years. They include 89 airline employees, 396 CAAB officials, 34 customs and immigration officials, and 240 Ansar personnel. But we never hear about how they were prosecuted or if the were even prosecuted at all.
Recently, the Detective Branch (DB) arrested 5 individuals, including a deputy general manager (DGM) and a flight scheduler, and according to information gathered from the arrestees, a hundred other officials, including some high executives, are under the surveillance of DB.
Despite their efforts, most of those arrested in gold smuggling cases last year are now out of jail on bail. The masterminds behind this ill trade are influential folk who have never been clearly identified.
Corruption is already rampant in Bangladesh, and officials aiding gold smugglers have now pushed it to a new degree. Local and international media are reporting on this gold smuggling haul regularly. There is already a perception among people that customs and immigration are already highly prone to corruption, and now this degree of gold smuggling has confirmed their beliefs.
A lot of civil-service examination candidates put customs as their top choice because of its highly lucrative possibilities, but it will destroy our social mechanism if steps are not taken against it immediately. The sooner the government understands this, the sooner our country can advance.
