The gold supply chain is riddled with transparency issues. One way travelers attempt to transport unauthorized gold across borders is with carry-on hand luggage. To improve travel security while reducing illicit gold trade, a few major organizations have come together to create more standardized policies on international travel with precious metals.
The Dubai Multi Commodities Centre and the World Gold Council recently joined forces in a global effort to address illicit gold trade while adding improved security measures for travelers with small quantities. The new policies ensure travelers can have precious metals, including gold, in their hand-carry luggage as long as it’s within a certain value restriction. This regulation extends to the UAE, China, India, Pakistan, the Americas, Europe, and numerous other countries.
Right now, most countries have their own regulations in place regarding travel restrictions. Some areas enforce restrictions on the type of precious metal, monetary value, weight, and more. The non-standard regulations allow smugglers to get away with illicit gold trade in certain areas while restricting tourists from simply taking their gold products home from vacation in other areas.
Many tourists travel to places like Dubai to shop for gold jewelry from renowned marketplaces before realizing they cannot bring their purchases home because of the complicated travel restrictions.
“Setting a standard rule for hand-carrying gold will help millions of tourists who come to the City of Gold to buy precious metal jewellery and bars. In fact, many tourists come to Dubai only to buy gold jewellery for their weddings,” Waheed Abbas from Khaleej Times reported.
Aside from the convenience aspect, the improved standards should also help eliminate many instances of illegal gold trade. People often use hand-carry luggage to transport illicit gold so they can avoid detection. This practice only worsens the already concerning transparency issue the industry is facing.
By eliminating illicit gold trade instances through strict hand-carry laws, we can remove some instances of irresponsibly sourced gold from circulation. Tourists will still be able to travel with their small quantities, but smugglers will not get through customs with handbags full of gold bars and coins.
“Stricter measures on hand-carry gold are an urgent priority. The positive impact this initiative will have on the legitimate gold mining communities worldwide is immeasurable,” Ahmed Bin Sulayem, the executive chairman and CEO of DMCC, explained.
Typically, the UAE, specifically Dubai, is a hot spot for illicit gold trade because of its relaxed regulations. UAE gold refineries have high instances of money laundering, terrorism financing, and other supply chain transparency concerns. The Ministry of Economy has been cracking down on such issues lately with minimal results, so these recent efforts from the Dubai Multi Commodities Centre show a promising step forward.
“This is a prime example of how Dubai and the UAE are demonstrating a true desire to enact positive industry reforms, so we are proud to be working alongside the World Gold Council on this crucial matter.” Sulayem continued.
So, why is transparency such a pressing concern in the gold industry?
Irresponsibly sourced gold often comes from mines that use unregulated practices like child labor, unsafe working conditions, money laundering, and more. These unregulated practices lead to high fatality and injury rates, environmental ramifications, and more. For example, illegal mining facilities in Brazil are dumping mercury into local rivers, tainting the community’s drinking water, and harming thousands in the area.
Of course, the industry does not condone these practices, and most buyers do not want to purchase from such unregulated facilities. Instead, smugglers move the gold in an untraceable way, like using carry-on luggage, so buyers cannot detect its origin.
So, when will the new travel standards be implemented on a global scale?
Right now, the World Gold Council and DMCC are still conducting further research with stakeholders from each of the representing nations to develop a fair limitation on the amount of personal gold travelers can carry in their hand luggage without allowing smugglers to get through. Hopefully, this set limit will reduce the circulation of irresponsibly sourced gold, ultimately shutting down illegal mines and their unsafe practices.
The parties are also discussing how to implement standardized customs procedures for declaring gold, plus ideas on new digital tracking processes. All of these policies, including the weight limits, will be implemented globally once agreed upon. Once these policies are implemented, we should see a substantial improvement in both gold supply chain transparency and retail shopping accessibility for travelers.