Aside from the loss to the economy in taxes, royalties, foreign exchange earnings and the undervaluing of the GDP, the large-scale gold smuggling which the new government says it detected when it entered office in May will be a major test of its intent to unearth the depths of this crime and prosecute fully.
Gold has been smuggled for as long as it has been mined by big and small alike. In recent years it would have rocketed upwards with the dizzying heights of the price on the international market in 2011/2012 and is probably on the downswing with the swooning of prices.
Nevertheless, the smuggling, particularly if it was large scale, points to cavernous problems in the monitoring, regulatory and law enforcement systems and needs to be tackled frontally.
On Aug 27, Minister of Governance with responsibility for Natural Resources, Raphael Trotman told this newspaper that when the government took up office in May it found evidence of rampant gold smuggling particularly to Brazil, Suriname and the United States and has made tackling it a priority.
“From what we are seeing gold is going over our borders with Brazil and Suriname and some amounts are going up to the US”, he had said.
He had stated that there is collaboration with foreign jurisdictions and that the Special Organized Crime Unit (SOCU) is also looking at the situation. Tongues have also been set wagging over reports that US visas have been revoked for several persons implicated through their dealings, or lack thereof, with the US Customs Service.
Gold smuggling, based on credible reports, had been going on for many years during the PPP/C administration and by senior players in the industry. The then government appeared disinterested perhaps because of the influence of the major planners.
The most potent sign of what had been happening surfaced in November 2012 when the vessel, the Summer Bliss was raided by armed gunmen, after it moored in the Caribbean island of Curacao. They took 476 pounds of gold. The vessel was last known to have been seen in Guyana waters prior to the raid and therefore fed the informed view that the gold, then worth around US$11.2M had been smuggled from Guyana, the handiwork of perhaps several major producers/buyers here.
Considering the scale of the discovery, the level of disinterest by the PPP/C government was breathtaking not withstanding a few feints in the direction of determining the extent of this racket and the major players behind it. Curacao was understandably ill at ease over what these shipments might say about the laxity of its systems and the scourge of corruption, as later underlined by a subsequent US demand for information on shipments over a number of years, and therefore not very enthusiastic about pursuing this matter. It was Guyana, the likely victim of US$11.2m in gold smuggling that it could ill afford which had the most at stake even if there was little prospect of recovery of the precious metal. Discovery of the facts surrounding this case would have given it an exemplary insight into the intricate web of fraud, security gaps and likely identities of those behind this and other shipments.
The key to the entire puzzle was of course the eight-person crew that had been clinically robbed on arrival in Curacao, likely as a result of the compromising of the smuggling ring. Guyana should have petitioned Curacao immediately for full access to the crew. This was not done at all. Unsurprisingly, the Guyanese crew vanished. The smugglers could take no chances. Where these persons are at the moment is not known. If the APNU+AFC government is truly interested in getting to the bottom of the smuggling of gold then it would do its utmost to retrieve all relevant information from the Curacao authorities including details of the crew. The onus would then be on the government here with cooperation from its international partners to locate the crew members, some of whom might have even filtered back here, for answers on where the gold came from. This would undoubtedly require witness protection and relocation considering the influence of the masterminds and the risk to them.
What the rampant gold smuggling would have also borne out is the scandalous ravishing of the tax system by these predators and undoubtedly others while the salaried workers are saddled with pay as you earn and the 16% VAT. Clearly the tax burden has to be rebalanced to have the high-class smugglers and others engaged in a variety of evasions pay their fair share so that there is a prospect of relief to those with modest earnings. The new administration needs to examine closely what else the Guyana Revenue Authority (GRA) must do to ensure that all revenues due to the GRA are paid and that the loopholes for smuggling and evasion are tightly constricted.
Ports of exit whether at the airport or by sea remain easily compromised by smugglers and the security arrangements need to be revisited and upgraded to avoid a recurrence of crimes of this magnitude.
The APNU+AFC administration must be aware that Guyanese have become accustomed to but increasingly intolerant of supposed high-profile investigations which come to naught. The PPP/C government was a master at this particularly during the 12-year Jagdeo reign and later Mr Ramotar’s 2011-15 sojourn as exemplified by his stonewalling over the NCN report. The public will not be forgiving to this government if it shows itself to be similarly duplicitous. It must now marshal all of its resources to get to the bottom of this smuggling racket, report as much as possible to the public and diligently pursue prosecutions.
