Police close to busting gold smuggling racket

Kathmandu, January 10

Nepal Police claimed today that it is close to locating the root cause of rampant smuggling of gold and its initial investigation reveals there is a powerful network behind smuggling of yellow metal.

“Arresting mules is not the solution to the problem because rampant smuggling of gold is directly linked with money laundering and poses a threat to national security,” said Inspector General of Police Upendra Kanta Aryal. He sought full cooperation from the government to conclude the investigation to control such crimes.

Presenting the preliminary findings of investigation on gold smuggling to Finance Committee of Legislature-Parliament, Aryal said the police have been seizing a large quantity of gold every year. The police had seized gold valued at Rs 770 million in last fiscal and worth Rs 300 million so far this fiscal. Police had seized a record high of 111 kg gold in fiscal 2014-15.

Gold smugglers have been found to be using the country’s only international airport, Tribhuvan International Airport, to smuggle gold to India via Nepal and Aryal hinted that the smuggling is being carried out frequently with the involvement of influential people in the country. Police have claimed a strong network is behind the smuggling based on the testimonies recorded from those arrested with 33 kg of smuggled gold on January 5.

The parliamentary panel today summoned Deputy Prime Minister and Finance Minister Krishna Bahadur Mahara, authorities from revenue administration, Nepal Police and authorities from Ministry of Home Affairs. The panel had shown concern about the efficacy of customs clearance process and questioned agencies involved in airport security as the 33 kg of gold seized by the police had cleared all customs procedures at TIA.

Regarding the January 5 incident, Department of Customs and security agencies have been pointing fingers at each other. However, IGP Aryal said security personnel were not allowed to enter the customs area and asked the government to review the system and mobilise security agencies in the customs area as well.

Rajan Khanal, revenue secretary at Ministry of Finance, backed the police investigation and said gold smuggling could be controlled only after finding the root cause of the problem. He assured the administration would provide necessary support. Nepal Police, Department of Revenue Investigation and Department of Customs are investigating the matter.

Khanal added, “If we are able to control hundi, smuggling will also be controlled subsequently.”

The government has prohibited people from taking away capital to invest abroad. Hence, the network of smugglers is suspected to be tapping remittance in labour destinations to finance such illegal activities, which could be a reasons for slowdown in remittance inflow.

The economy will suffer in long run due to outward capital flow. After Balance of Payments crisis of fiscal 2009-10, the government has allowed only commercial banks to import 15 kg of gold every day.