We first reported on the increase of gold smuggling in Japan back in September 2018 when new taxes instituted by the Japanese government made gold smuggling much more lucrative. It seems that gold smuggling in Japan may rival India if the current trajectory continues.
What we reported at the time
Japan has an unflattering reputation as a “go-to place” for gold smugglers. In 2017, there were 1,347 cases discovered by law enforcement — 112 times the tally from 2013, the year before the last tax hike. Seized gold last year amounted to 6,236 kg, a 47-fold increase.
“It looks like the break-even point for smugglers is between 5 and 8%,” a government source said of the sudden spike. Source
Will this trend continue? Will the smugglers stop having their wares stolen by the authorities? Are they going to come up with better ways to get the gold into Japan? Losing 6,236 kilos of gold is a lot of gold, a massive amount of fiat down the drain.
It seems the people of Japan are truly preparing for the coming tax increase and doing everything within their individual power to protect their wealth from thieving government officials.
With Hong Kong being the point of origin for the gold it seems the Shanghai Gold Exchange will continue to record high levels of physical gold passing through the market and into the hands of international gold smugglers. What’s interesting is the fact that gold is so important there are entire teams of “experts” dedicated to gold smuggling. I thought gold was of no importance – a “barbarous relic” and as Ben Bernanke said, it is “not money”. So, why all the attention for something used to make jewelry or “collectible” coins and medallions? Is jewelry that important? Seriously?
Another interesting fact about this latest report from South China Morning Post is this story is approaching two years old! Why the long delay? Where is the gold, which totals 220 Kilos or said another way 484 Pounds of physical gold which translates to 7,744 ounces. The volume of gold we are talking about is significant in the fact this is merely one scenario, not several grouped together. Another serious question would be is the 220 kilos counted in the original report from September 2018 or is this outside of the 6,236 kilos originally reported?
Reuben Rosen, a 58-year-old Israeli living in Tokyo’s Shinjuku Ward, and David Cohen, 55, of Setagaya Ward, are accused of hiding gold ingots in consignments of vehicle parts flown to Narita International Airport.
Japanese authorities found 220kg of gold concealed in components for car suspension systems that arrived at the airport in November 2017. The gold had a value of ¥1.9 billion (US$17 million or HK$136 million) and the bust is thought to be the largest of its kind in Japan.
Customs officials told the Asahi newspaper that the men were suspected of evading ¥73.9 million in taxes that would have been levied on the gold had it been declared. Source
Avoiding 73.9 million yen ($674,885) in taxes on one transaction is enough to make a lot of people become a “criminal”. Serious question, what did the person bringing the gold into the country do to deserve such a tax, all he and his team were doing was entering the country, and what did the government do to justify collecting such a massive amount of extortion, I mean, taxes for this one transaction? Is it any wonder people try and try to avoid being held hostage by rogue governments that simply line their pockets with our labor called taxes.
