Concerns have been expressed that sharp increases in sales of gold from Switzerland to India may indicate money laundering via this trade channel.
Switzerland is one of the world’s largest refiners of gold while India is one of the world’s biggest importers.
Gold sales from Switzerland to India have doubled in the past 15 years, against a backdrop of rising gold prices and a strengthening rupee.
One expert indicating this trend should cause concerns is Dev Kar, the chief economist at Global Financial Integrity, a Washington-based non-profit that tracks illicit financial flows globally.
Kar says that higher import duties and quantitative restrictions on gold are suspected of fuelling the smuggling of imported gold.
He also estimated that Inida’s underground economy accounts for around 50 per cent of official GDP and that, on average, US$34.4 billion dollars in illicit funds have been transferred out of India every year over the past 10 years.
Tax haven ties
Almost all of the outflows take place through the deliberate mis-invoicing of trade, according to the economist, who argues that trade-based money laundering is one of the surest and safest ways to trade in illegal gold.
Trade-based money laundering is thought be widely practiced in India because of the availability of black money and close ties to tax havens such as Mauritius, Dubai and Hong Kong.
Categories: Trade Based Financial crimes News