Two men, supposedly belonging to one of three gold syndicate groups operating out of Changi Airport Terminal 1. They were seen sorting out gold chains near the entrance of the Departure Hall. - ST PHOTO: ZAIHAN MOHAMED YUSOF
SINGAPORE: The authorities in India, including Customs officials, are on the lookout for travellers acting as “gold mules”, who return home with jewellery they had agreed to carry for a fee.
This comes in the wake of a spike in gold smuggling to the country, and amid reports of syndicates targeting travellers at various airports in jurisdictions in the Gulf, as well as in Asia, including Malaysia and Singapore, where gold is cheaper than in India.
According to media reports, the crime is so pervasive that in September 2023, 113 out of 186 passengers on a Chennai-bound flight from Muscat, Oman, were arrested for conspiring to smuggle gold and electronic goods.
The Indian Customs caught them with 13kg of gold, more than 200 mobile phones, laptops and cigarettes. It was reported that smugglers had influenced the passengers with chocolates and perfumes as commission.
The Straits Times learnt that smugglers have been approaching Indian migrant workers flying home via Changi Airport Terminal 1.
Travellers who show an interest in being a gold mule are directed to a quiet spot in the airport, where a deal is struck. During negotiations, the courier is assured that a syndicate runner will retrieve the gold jewellery from him when he lands in India.
Mr Mohamed Bilal, the president of the Gem Traders Association of Singapore, said that while it is not illegal in Singapore for travellers to carry precious metals, including gold, out of the country, the couriers risk breaking the law in India when they do not declare the gold they are carrying in.
Male Indian nationals are permitted to carry up to 20g of duty-free gold, of a maximum value of 50,000 rupees ($800), into India. The limit for female Indian nationals is double in terms of weight and value.
Gold jewellery carried over and above these limits will attract Customs duty.
Mr Bilal said that the practice has been going on for decades, adding that Singapore’s gold is prized due to its quality.
ST had observed the activities on separate occasions from July 2023. The men who approach the passengers work as runners for bosses who observe the proceedings from a safe distance.
These runners often carry palm-sized bags which contain gold jewellery.
Gold smuggling in India has seen a spike in seizures and amount discovered in recent years.
In March 2023, The Hindu newspaper reported that there was a total of 3,982 seizures in 2022, involving 3,502kg of gold.
This compared with 2,445 seizures (2,383kg of gold) in the previous year and 2,567 seizures (2,154kg) in 2020.
The World Gold Council said in a report that gold smuggling in India spiked after the import duty of gold was raised in July 2022 to 12.5 per cent from 7.5 per cent.
The smuggled gold was detected at land borders such as Nepal, Myanmar and Bangladesh, as well as at India’s international airports, Mr Sanjay Kumar Agarwal, chairman of the Central Board of Excise and Customs, said in October 2023.
According to media reports, syndicates have hidden small gold bars in belts, toys, luggage lining and even shoes.
Sometimes, smugglers also bring in gold dust or paste. Indian Customs learnt that some of the passengers arrested had been to Gulf countries on “sponsored trips”, and returned with gold hidden in their luggage.
Among the smuggled gold uncovered by the Indian authorities, some came from flights originating from Dubai, Malaysia and Singapore.
Small amounts
ST understands that the gold smuggling runners at Terminal 1 want the mules to carry jewellery of between 25g and 30g of gold, which is just outside the legal limit.
Nanyang Technological University associate professor of accounting Kelvin Law said there are two reasons why gold is one of the favourite instruments to move funds out of countries.
“First, there is an extremely high demand for gold in countries like India,” said Prof Law, who specialises in corporate taxation, financial fraud and sustainability.
“Second, the ability to melt down and reconstitute gold means its origins become virtually untraceable. Once melted, it is impossible to determine where the gold was mined or processed.”
He said there is some concern about the opacity of the gold’s origin and ultimate usage.
“There are anecdotes that the smuggling of gold can be tied to illicit financial activities and money laundering by organised criminal syndicates.
“These operations often involve gold powder smuggled from conflict or high-risk areas, which, upon reaching its final destination via intermediary countries, is melted down in local refineries,” added Prof Law.
He said the concern is the integration of proceeds from these sales into the local financial network, potentially for illicit purposes.
“Such activities pose a risk to our financial reputation and potentially implicate us in global networks of financial crime, especially considering the high global media exposure of the money laundering case here,” he said, referring to the 10 foreigners arrested in a $2.8 billion money laundering probe. - The Straits Times/ANN
