Precious Metal Smuggling On the Rise, or Fall, in Hong Kong?

Hong Kong’s Import and Export Ordinance prohibits bringing unclaimed precious metals into the region. Tourists must report to customs if they take gold weighing more than 0.25kg across the border. Violation is punishable by a max penalty of seven years imprisonment and a HK$2 million fine. Despite the consequences, precious metal smuggling increased by more than 70% from 2015 to 2016 – forcing customs officials to double-down on the city’s border checkpoints with enhanced inspections. Several of the smuggling attempts that failed were shockingly large:

  • On April 27, an inspection of a refrigerator truck at the Huanggang checkpoint uncovered 66, 16kg plates of silver
  • On May 22, agents at the Man Kam To checkpoint found nearly a ton of silver hidden on three in-bound trucks
  • On June 28, authorities at a Shenzhen immigration control point seized 76kg of gold bars, resulting in 12 arrests
  • On July 20, a woman was detained at the Shenzhen border for the Louhu District when authorities discovered that she was hiding 15, 1kg gold bars taped under her clothes
  • On August 17, an inspection of a luxury vehicle at the Shenzhen Bay immigration control point uncovered 30, 1kg bars of gold

There are a few possible reasons for driving the increased smuggling activity. For starters, 2016 was a good year for precious metal prices. However, mainland-China has strict regulations and high taxes for precious metal exports (which includes goods crossing the border into Hong Kong). Since the entire Chinese market has a consistently high demand for gold, smuggling attempts that successfully avoided that red tape would have been very profitable.
   
Is the activity likely to continue into 2017? Well, gold prices started to trend downward as 2016 came to a close. This, combined with the increased success customs agents have had in catching smugglers, could indicate that the rate of incidences will go back down to previous levels.

 

Manhattan Gold & Silver Update

OUR STORE WILL BE CLOSED MONDAY JUNE 1ST.

We are open for business with limited hours from 11am - 2pm. The easiest method for metal processing is to either mail, or drop off/curbside service. Customers will not be allowed in the exchange at this time. 

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