New report calls for more vigilance on gold entering and exiting India
OTTAWA, CANADA - EQS Newswire - November 27, 2019 - IMPACT's
new report reveals India to be one of the largest gold smuggling hubs in the
As a result, gold that is tied to conflict, human
rights abuses, and corruption in Africa and South America is entering legal international
markets through India.
In its latest report, A
Golden Web: How India Became One of the World's Largest Gold Smuggling Hubs, IMPACT uncovers how India imports approximately 1,000
tons of gold per year--a quarter more than official figures indicate. Some
enters as legal imports thanks to falsified paperwork.
"Actors across India's gold industry are failing to do
proper checks on where gold comes from to ensure it's not financing conflict
and human rights violations," according
to Joanne Lebert, IMPACT's Executive Director. "With its role as a leading global gold manufacturing centre, India must
take action to address the weaknesses in its gold supply chain."
IMPACT's research reveals that one third of the
world's gold passes through India, the heart of the world's gold manufacturing
sector. With its gold jewellery exports on the rise, India has become one of the
world's leading trading hubs--with illicit gold entering country, being
transformed into goods, and leaving for international markets, including North
The report identifies three primary factors which allow
a problem of this magnitude:
Tax breaks: To boost India's refinery sector, the government introduced tax
breaks in 2013 for gold doré --also
known as unrefined gold. This has led to traders covering up questionable provenance
claims by falsifying documentation of gold doré
to take advantage of lower taxes. Gold doré
imports shot from 23 tons in 2012 to over 229 tons in 2015 as a result of
these tax breaks.
origin documents: Gold doré imports have spiked, with the majority coming from producing
countries that lack strong internal controls or are linked to supply chains
with weak evidence of due diligence. Analysis of trade data reveals more declared
gold imports to India than some countries are capable of producing, such as in
the Dominican Republic and Tanzania, as well as instances of paperwork fraud
like in Ghana. In the case of the
Dominican Republic, as much as 100.63 tons of gold doré imported to India between 2014 and 2017 cannot be accounted
for in the country's gold production.
Complicit allies: Refined
gold is being smuggled into India primarily from the United Arab Emirates, while
key traders and refiners in Africa's Great Lakes region with links to India
have been identified as being part of the illicit gold trade.
To tackle the problem, IMPACT calls on India to take
immediate steps to:
Harmonize its taxes, including
between doré and refined gold to discourage
Enhance regulatory controls at
the border to require additional, valid information for all imports of all
"India is at the heart of a web of the illicit trade of
gold, with threads spanning the globe and almost certainly financing conflict and
corruption. Authorities must take action to remove incentives for gold smuggling
and ensure the gold industry implements due diligence. Anyone buying India's
gold jewellery should be asking questions about where that gold comes from to
have confidence in their supply chain," adds Lebert.
IMPACT also calls on actors across India's gold
industry to implement due diligence on their gold supply chains. Gold traders,
refiners, and jewellers have a responsibility to understand, mitigate, and publically
report on any risks in their supply chain--all the way back to the mine site.
Download the full report here: http://bit.ly/IndiaGoldenWeb
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approaches for natural resources to improve security, development, and
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for lasting change. www.impacttransform.org