smugglers
Dan Atkinson in London
LONDON is at the centre of an $80-million-a- year gold-smuggling racket shipping stolen and otherwise-illegal bullion from Mozambique into Europe.
Some of the metal is then refined in the United Kingdom, often in primitive garage refineries. It goes to the jewellery trade.
“A lump of gold is a lump of gold,” said one industry source, underlining the ease with which smugglers can refine away identifying features from illicit bullion.
Investigations by the South African police have highlighted the smuggling route from the Cape through Mozambique and on to airports in Britain. The rackets under investigation dwarf run-of-the-mill evasion of value-added tax (VAT) on gold, one case of which earlier this year involved 500 000.
Much of the bullion has been stolen from mines in South Africa, which are reeling from what they say is a total of more than $350- million of losses every year. “It is a major tax on the mines,” said a London gold analyst.
Of the rest, industry sources suggest that some is legitimately owned gold evading tough exchange-control regulations in South Africa, Mozambique and Zimbabwe. And there are hints that a proportion comes from jewellery stolen by muggers and thieves in South Africa.
The London route is thought by South African police to stretch from an airport in suburban Johannesburg, from where undeclared gold is flown to Maputo in Mozambique. It is then flown to Britain, either to Heathrow or quieter provincial airports, and re-refined to hide its origin.
With modern technology, a new breed of rogue refiner is able to produce gold bars to the standard of purity demanded by British and other European jewellers. “There are people who have the technology,” said one expert.
For sale to reputable jewellers, the gangs will need paperwork “proving” that the gold was refined at an established refinery, but for the less scrupulous in the trade there is no need.
Five tons of gold is thought to have gone along this route during the past year alone, metal that would have a total value of about $75-million at the present market price.
Illicit gold movements out of Africa to Europe are on a vastly different scale to the more common British problem of evasion of VAT on bullion, and there are suggestions that mafia-type gangs and ruthless criminal syndicates are involved in the racket.
Illicit shipments of gold to Britain are expected to decline, at least temporarily, after South African police activity during the past few weeks. London broker T Hoare said the Mozambique smuggling ring might have shifted a total of 15 tons of gold during the past 10 years, bullion with a total worth of more than $180-million.
The Chamber of Mines in South Africa estimates theft at 30 tons a year, or more than $350-million worth.