Approximately 15,000 ounces of gold is being smuggled from Guyana each week and the country is losing as much as 60% of gold produced here in this manner, Minister of Natural Resources Raphael Trotman says.
“I believe that we are losing about 50 something to 60% of our production from smuggling,” Trotman told reporters at a press conference today at Cara Lodge. He said based on reports, it is assumed that approximately 15,000 ounces of gold is leaving Guyana per week. He said that gold is going to Brazil, Suriname, and is being landed at the Miami International Airport and JFK Airport in the US and even as far as Europe and the Middle East.
If priced at US$1,000 per ounce it would mean around $3b would be leaving the country each week.
Trotman disclosed that a team from the US Federal Bureau of Investigation (FBI) and Homeland Security visited last year and briefed Minister of Public Security Khemraj Ramjattan and him on gold smuggling. The team also interacted with other agencies such as the Special Organised Crime Unit (SOCU). According to the minister, the points of entry and exit as well as the quantities were garnered from the briefing given by the US team.
Government and law enforcement officials have said that there has been major smuggling of gold to the US and other countries, including Brazil and an investigation is underway that encompasses collaboration between Georgetown and Washington on tracing shipments of gold and their declaration in the US.
According to Trotman, not all the gold being smuggled is coming from Guyana. “There are indications that gold is coming from Colombia, perhaps Venezuela, passing through what could be weak or porous systems in Guyana and making its way up,” he said.
Asked about the measures taken to halt smuggling, Trotman said it is the remit of the police and the ministry has been working with SOCU and the police force. He said an enforcement or investigative arm of the ministry is under discussion. It is unclear why the large-scale smuggling is continuing even through the problem was identified months ago.
Trotman asserted the fact that a team from the US was dispatched here to talk about partnership, about building better relations, and about sharing of intelligence is a sign that something is being done. He also said the higher gold declarations for last year is a sign that a dent has been put into smuggling. “We are seeing small, incremental steps, progress being taken and we are quite happy (at) the direction in which we are going,” Trotman said.
According to the minister, the two foreign large-scale mining companies declared just over 40 000 ounces of gold so it was local miners who moved production beyond the 400 000 ounces mark “which is a feat in a depressed market.” Gold declarations for 2015 amounted to 451,490 ounces, representing a 16.5% increase over 2014 figures.
Meantime, in relation to whether any specific person or entity was identified in relation to gold smuggling, Trotman said the fact that both the FBI and Homeland Security were in Guyana would mean that persons of interest would be on the radar. However, he said that is not part of his remit and he is not privy to the nature of the investigations. He added that if there are persons of interest on a list, neither he nor any minister will disclose who those persons are.
In terms of leakages from gold exports, Trotman said the Gold Board compound does not have a facility to seal gold but exporting the precious mineral is covered by protocols. However, he acknowledged that people are going to find ways to beat the system and they have heard of this from time to time. He said the authorities would move to tighten procedures.
Meantime, asked if government is looking at lowering taxes and royalties to try to reduce the level of smuggling, Trotman said it would have little impact.
“There is no empirical evidence that suggests that if we lower the royalties, it will automatically lead to a rise in declarations because you got to examine the reasons why people are smuggling gold. Some of it has not only to do with a better price which could be obtained in Suriname, some has to do with hiding income from government to avoid taxes altogether so other people may be using smuggling as a means of laundering of illicit or illegally obtained money so lowering the royalty will not, from where we stand and from the research we have, will not automatically lead to substantially higher declarations,” he declared.
