Guyana’s three-month-old government is beginning to come to grips with the magnitude of illegal activities that were tolerated by the previous regime and has a number of western agencies, including U.S. Customs, to thank for it.
The recently established asset recovery unit operating out of the office of President David Granger reported this week that it has just uncovered a gold-smuggling racket to the U.S. involving at least $220 million worth of gold in less than a year of monitoring.
As officials have indicated, a number of businessmen without gold export licenses would smuggle large amounts of gold out of the country to the U.S. without declaring the shipments at the local airport but would in fact declare their cargo to American authorities upon arrival for fear of seizure and prosecution.
The smugglers have quite smartly used a loophole in local laws, labeling their exports as “scrap gold” because this category does not attract any export duties from Guyana or import taxes into the U.S.
Startled by the amount of gold arriving on commercial flights from Guyana at New York’s John F. Kennedy Airport and other American airports, U.S. customs office began liaising with the Guyanese intelligence community, alerting them to the racket and also began building intelligence files on the smugglers.
In one case, officials from the two sides compiled evidence showing that a single businessman alone accounted for a whooping $18 million in smuggled scrap gold, while a group of others account for at least $200 million.
The racket came to the attention of authorities around mid last year so agencies are looking into the money laundering aspect of it and say they expect a number of indictments from the US in the coming months as evidence is overwhelming.
Scrap gold has much to do with personal amounts of gold a person might have owned and decided to smelt the pieces into a bar or bars so these is no real tax categorization for this.
About two years ago, the natural resources ministry had complained that half of the gold produced in the country by small and medium scale miners is smuggled out of the country, a fair amount of it through neighboring Suriname and the others by air to Canada and the US. Rough estimates put the amount at around one million troy ounces. As well, officials say that much of Guyana’s gold ends up in Dubai in the Middle East through Suriname.
Taxes and royalties in Suriname on raw gold are way cheaper than in Guyana, making it a prime temptation for smugglers, as the profit margins are humongous.
Some also head out to the Caribbean by river transport as was seen in the case of about 70 gold bars discovered on a trawler from Guyana to Curacao back in 2012.
A leading city businessman remains under the watchful eyes of local and especially American intelligence officials as they try to track down where the money is going and what it could be financing.
To go along with the investigations and to put pressure on some of those involved, the State Department has already cancelled American entry visas of several businessmen and women, many of them from the western Bartica river town that is regarded as the gateway to interior goldfields.
The revocations include an extremely wealthy businessman with extensive assets in the interior and in the city. Officials say several more are in the offing and would be forthcoming later this year.