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Huge gap in price, gold smuggling "heats up" in border area

11:53 | 13/10/2021

VCN - The domestic gold price was higher than the world price by up to nearly VND 10 million/tael, hence smugglers used many tricks to illegally transport gold across the border to make a profit.

The case of smuggling five gold bars was seized by Tinh Bien Customs in coordination with Tinh Bien border guard, An Giang. Photo: T.Tuấn
The case of smuggling five gold bars was seized by Tinh Bien Customs in coordination with Tinh Bien border guard, An Giang. Photo: T.Tuấn

"Hand-carry" a few kilograms of gold across the border

After the case of smuggling 51kg of 9999 gold across the An Giang border was closed by the competent forces at the end of 2020 and they arrested Nguyen Thi Kim Hanh and many others in this smuggling line, the situation of gold smuggling across An Giang border and many southwestern border provinces has subsided. However, recently, this situation has begun to heat up again, and competent authorities have continuously seized many cases of gold trasported in large quantities.

Recently, on September 27, Vinh Xuong Customs Branch (An Giang Customs Department) and the Road Border Gate Enforcement Working Group of Vinh Xuong International Border Gate Border Station coordinated to control the area. At the road border gate, Nguyen Van Nghiep was discovered (born in 1982, permanently residing in Hamlet 5, Vinh Xuong Commune, Tan Chau Town, An Giang Province) while he was driving a motorcycle without a license plate and carrying two bags containing more than 2.2kg of jewelry (suspected to be gold). The goods were estimated to be worth about VND2.7 billion. Nguyen Van Nghiep confessed that he was hired to transport the above goods for Pham Hai Duong (born in 1978, permanent resident in Vinh Xuong commune, Tan Chau town).

With more than 100km adjacent to Cambodia, An Giang border was often identified as a hot spot for transporting contraband goods, including gold. Previously, on September 9, the Working Group of Tinh Bien Border Station chaired and coordinated with Tinh Bien Border Gate Customs Branch (An Giang Customs Department) to check and discover a truck with plate 67L - 9350 moving from the direction of entrance gate No. 1 (from Cambodia to Vietnam). The competent force discovered that more than 2.8kg of gold jewelry of all kinds was hidden in the vehicle.

Also at Tinh Bien border gate, in May 2021, Border Defence forces worked with Tinh Bien Customs Branch to stop Huynh Thi Nguyen who used a motorbike to hide five pieces of gold and 1,040,000 Riel (Cambodian currency). Huynh Thi Nguyen declared that she was hired to transport the gold and foreign currency mentioned above to Vietnam for Sau Huong at Sau Huong gold shop (Xuan Hoa cluster, Tinh Bien town, Tinh Bien district, An Giang province) by a Cambodian.

Similarly, gold smuggling also occurred in the Central Highlands border line recently.

Specifically, on September 21, the Bo Y Customs Branch discovered and handled a case of illegal transport of 0.65kg of gold from Laos to Vietnam. Nguyen Thi Vui (born in 1956, living in Kon Tum city, Kon Tum province) claimed that she bought this gold in Muong Cau area, Attapeu province (Laos) and brought it back to Vietnam. Previously, in August, a man was discovered at this border gate when he was transporting 1.7kg of gold from Laos to Vietnam. This person claimed to be hired to transport the above gold for a woman from Muong Cau to Vietnam with a salary of 200,000 Lao Kip.

How to tackle the issue

The gold smuggling from abroad to Vietnam has persisted for many years due to the huge gap between the domestic gold price and the world gold price.

Mr. Huynh Trung Khanh, Senior Advisor of the World Gold Council in Vietnam and Vice President of the Vietnam Gold Business Association, said that according to the assessment of the World Gold Council, when the domestic gold price was higher than the world price by approximately 2% or more, it would create the phenomenon of gold smuggling. While in Vietnam, this disparity was much larger and widening. Even recently, there was a time when the domestic gold price was higher than the world price by over VND9 million/tael for gold bars and nearly VND3 million/tael for jewelry.

Meanwhile, the smuggling of gold was easy because of its compact size and high value. One kg of gold was only equivalent to one cell phone, so it is easy to hide. The sanctions for gold smuggling were also very light compared to the profit that could be earned if transported successfully.

Therefore, according to Mr. Khanh, the amount of smuggled gold seized only accounted for a very small proportion of the gold smuggling activities. Although the competent authorities have made efforts to destroy a number of lines, that has only solved the top part.

Explaining this difference, Khanh said, the domestic gold market had been "closed" for nearly a decade, with no connection to the world, leading to an imbalance in supply and demand. Since Decree 24 was issued, no enterprises had been licensed to import raw gold for the production of gold jewelry and fine art. The State Bank (SBV) also did not import gold for SJC Company to process into SJC gold bars.

Meanwhile, all three countries adjacent to Vietnam, namely Laos, Cambodia and China, were open to the gold market. Especially gold trading was easy and convenient in Laos and Cambodia.

“Every year Cambodia imported 40-50 tonnes of gold, while the population was only about 15 million people. The supply was abundant and the price was cheap, so the subjects would find ways to transport gold to Vietnam and sell it for a profit,” Khanh said.

Therefore, Mr. Khanh suggested that the SBV should allow enterprises to import raw gold to make gold jewelry.

“Currently, we had an abundant source of foreign currency due to trade surplus and foreign exchange reserves were also around $100 billion. Therefore, Vietnam had enough resources to import raw gold, thereby narrowing the gap with world prices," Khanh said.

When the price difference narrowed, the smuggling situation would automatically cool down.

In addition, the permission for importing gold also opened up opportunities for enterprises to produce gold jewelry for export. Because the skill level of Vietnamese jewelers was highly appreciated compared to other countries.

However, for a long time, Vietnam had neglected this market for other countries to exploit such as Indonesia, Malaysia, Thailand. Many countries had even attracted Vietnamese jewelers to work and exported tens of millions of dollars in jewelry every year.

By Thu Hòa-Nguyễn Hiền/Thanh Thuy