Transmitting Treasure: Navigating The Complexities Of Sending Gold From Afghanistan

There have been concerns about gold being transported out of Afghanistan, with gold bars being packed into hand luggage and jacket pockets on commercial flights to Dubai. While the gold is legal to fly and some are legitimately being sent by gold dealers, there has been a surge in shipments, puzzling officials about the origin of the gold and the reason for it being sent to Dubai.

Gold is being smuggled out of Afghanistan in hand luggage and jacket pockets

The gold is fully declared and legal to fly. Some, if not most, is legitimately being sent by gold dealers seeking to have old and damaged jewelry refashioned into new pieces by skilled craftsmen in the Persian Gulf, said Afghan officials and gold dealers. However, there has been a surge in shipments since the early summer of 2012, which has caught the attention of Afghan and American officials. They are investigating the origin of the gold as very little is mined in Afghanistan, and why so much appears to be heading for Dubai. Noorullah Delawari, the governor of Afghanistan's central bank, has stated that "if we find this is a way of laundering money, we will intervene".

The smuggling of gold out of Afghanistan is part of a larger problem of cash smuggling. For years, flights have left Kabul almost every day carrying thick wads of banknotes—dollars, euros, Norwegian kroners, Saudi Arabian riyals, and other currencies—stuffed into suitcases, packed into boxes, and shrink-wrapped onto pallets. In 2020, Afghan government officials helped smugglers sneak almost $1 billion in cash and gold out of Afghanistan as the US-backed government neared collapse.

The gold is being transported on commercial flights to Dubai

Dubai's appeal as a destination for gold is due to several factors. Firstly, there is no import duty tax or VAT on gold bars brought into the country. This makes it a very attractive destination for gold traders, who can import large quantities of gold without incurring taxes. Additionally, Dubai has a very laissez-faire, entrepreneurial business environment with minimal restrictions on the amount of gold that can be brought in or taken out of the country.

The process of transporting gold on commercial flights to Dubai often involves hand luggage or jacket pockets, with gold bars of various sizes being carried by individual couriers. These couriers may be transporting gold for gold dealers who are sending old and damaged jewellery to be refashioned into new pieces by skilled craftsmen in Dubai. However, the increasing volume of gold being transported out of Afghanistan has raised concerns among officials, who suspect money laundering may be taking place.

The gold trade between Afghanistan and Dubai is part of a larger pattern of gold trafficking. Dubai's gold souk, a compact area with hundreds of small dealers, is a common destination for gold brought in by couriers. This gold is often sold as scrap, obscuring its origins and making it difficult to determine whether it was sourced ethically. Dubai's relatively relaxed customs process further contributes to its appeal for gold traders, as hand-carried gold is not subject to the same level of scrutiny as other forms of cargo.

The ease of transporting gold to Dubai and the city's role in laundering artisanal gold have made it a node of corruption and a destination for illicit financial flows. While Dubai's role in the global gold trade is problematic, the emirate's ideal geographical location, excellent air access, and competitive marketplace continue to make it an attractive destination for gold dealers and traders.

The gold is fully declared and legal to fly

If you are sending gold from Afghanistan, it is important to be aware of the relevant laws and regulations. In this case, the gold is fully declared and legal to fly, which is an important first step. Here are some further considerations and guidelines to keep in mind:

Contact the Relevant Authorities

It is always best to be transparent and proactive when dealing with valuable items like gold. Contact the relevant customs or border protection authorities before your trip to inform them of the gold you will be carrying. This can save potential delays at security checkpoints and will ensure you are complying with the necessary procedures.

Keep Gold Close and Secure

It is recommended to carry gold in your hand luggage or carry-on bags, rather than checked luggage. This reduces the risk of loss or theft. Keep the gold securely stored in the overhead locker or, even more securely, under your seat, where you can keep a close eye on it.

Declare the Gold

Even if you have informed the authorities in advance, it is important to declare the gold at security checkpoints. Be honest with the security personnel and, if necessary, request a private screening to avoid drawing attention to your valuable cargo.

Documentation

Proper documentation is essential. Bring receipts, invoices, or other documents that prove ownership and value. This will help assure officials that the gold is legitimately yours and reduce the risk of unexpected issues during your trip.

Value and Weight Restrictions

Be mindful of the value and weight restrictions that may apply. For example, in the United States, the value of the gold must be less than $1 million, and if the value of gold coins or silver coins exceeds $10,000, a FinCEN 105 declaration form must be completed. Additionally, check with your airline for weight restrictions on hand luggage.

Research Your Destination

The regulations and laws for transporting gold can vary depending on your destination. Research the rules and import regulations of the country you are travelling to, as well as any applicable laws in your country of citizenship. Some countries may require declaration forms, and others may impose customs or import fees.

The gold is being sent by gold dealers to be refashioned into new pieces

Gold dealers are highly risk-averse due to the volatility of the metals market. They rarely speculate on future spot prices and instead hedge their inventory in the markets. This means that they can protect themselves from price fluctuations. For example, if the gold price increases by $50, the dealer will make an additional $50 on the sale to the customer, but they will lose $50 on their short position.

Gold dealers make money on the premium, the amount charged over the spot price. For instance, you may pay a premium of $60 above the spot price of gold for a US Mint Gold Eagle. However, gold dealers do not buy these coins at the spot price, and it costs money to melt, refine, and mint gold into coins.

Gold dealers will also buy gold from the public. They will then sell these metals to a large-scale depository or wholesaler. The wholesaler makes a profit when buying from the dealer, and the dealer makes money when buying from the public.

Gold dealers in Kabul and current and former Kabul airport officials have noted a surge in gold shipments since early summer, with most of the gold being carried on commercial flights destined for Dubai. According to Afghan officials and gold dealers, some gold is being legitimately sent by gold dealers to be refashioned into new pieces by skilled craftsmen in the Persian Gulf.

Gold buyers are typically licensed by the Department of Justice and their local police departments. They use calibrated scales to ensure you have a fair and accurate reading. They are also motivated to buy gold rather than sell new pieces to you.

If you are looking to send gold, you can use the United States Parcel Service (USPS) Registered Mail service, which allows people to safely ship physical gold fully insured. USPS Registered Mail parcels can be insured for up to $50,000 USD per parcel.

There has been a surge in gold shipments from Afghanistan since the early summer of 2012

Most of the gold is being carried on commercial flights to Dubai, in the United Arab Emirates. The amounts carried by single couriers are often so large that passengers flying from Kabul would be advised to take care with their luggage in the overhead compartments. One courier, for example, carried nearly 60 pounds of gold bars, each about the size of an iPhone, on a single flight in mid-October. The load was worth more than $1.5 million.

The gold is fully declared and legal to fly. Some, if not most, is legitimately being sent by gold dealers to be repaired or refashioned by skilled craftsmen in the Persian Gulf. However, the surge in shipments since the early summer of 2012 has sparked concern among officials. They are now investigating the origin of the gold and why so much is heading to Dubai, as very little gold is mined in Afghanistan.

Noorullah Delawari, the governor of Afghanistan's central bank, has stated that they will intervene if it is found that these shipments are a way of laundering money. However, he acknowledged that there are more questions than answers at this point. The high volume of gold leaving the country remains a mystery, with officials unsure of whether it is regular Afghan commerce or if something else is going on.

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