Gold Smuggling Increases 37 Times Last Year

The soaring gold price has spurred gold smuggling.

The Korea Customs Service said Wednesday that as of late last month, the number of reported gold smuggling incidents was 14, worth 12.8 billion won.

Compared to the same period last year, the frequency doubled and the amount increased 37 times.

The form of smuggling has improved from family groups bringing in small amounts of gold bars to organized groups. A gold bar smuggling organization, caught last August, illegally shipped a 120-kg gold bar (worth 2 billion won) on a cargo-passenger ship that regularly operates between China and Korea.

Such bold and large-scale smugglings are perhaps attributable to the gap between the local gold price and the international gold price. The local gold price has sharply increased due to the rise in gold buying by the wealthy, who have not found attractive investment subjects this year.

The Korea Customs Service said that as of late last year, the price gap was just 2,237 won per 3.75g, but the gap this year was widened to 3,000 ~ 5,000 won.

Meanwhile, legal gold imports are also increasing to a great degree.

The amount of gold imported this year as of late October is $3.3 billion, an increase of 80 percent from $1.8 billion over the same period last year, and far larger than the last year’s total amount, $2.8 billion.

Jae-Seong Hwang jsonhng@donga.com