Customs amends jewellery transportation laws

by Kurulu Koojana Kariyakarawana

Despite numerous measures taken by the authorities to curb the illegal transportation of jewellery mostly gold out of the country during the past several months, there has not been a visible reduction in the number of attempts being made by the perpetrators engaged in the racket. Many unorthodox manoeuvres were adopted by those who seriously into the illicit trade of smuggling gold out of the country under the very nose of the law enforcing authorities at airports.

Whilst some go to the extent of hiding portions of precious metal inside their private organs, some others just wore them like personal jewellery and tried to walk through the security gates and scanners challenging the eyes of the Customs officials. This became an eye opener for both the local and Indian airport security authorities with a group of 56 Sri Lankan passengers arriving at the Cochin International Airport in Kerala, India wearing various types of gold jewellery and ornaments weighing over 10 kilograms.

The problem was that the group came wearing raw gold objects instead of actual jewellery and secondly how they managed to pass through the Customs at the Bandaranaike International Airport, their embarking port in the first place. While preliminary investigations were being carried out by the Indian authorities, informal inquiries were made from their Sri Lankan counterpart, the Customs Department as to how this group managed to leave the country unnoticed.

The local authorities who were clueless about this incident could not come up with an explanation as there were no specific laws related to the transportation of gold jewellery in place at that time. Since the group had left the country wearing these as jewellery and not hiding them as contraband little could be done according to the prevailing laws. This captured the attention of many responsible parties to ponder drafting a new set of laws that could control a situation like this in future.

The incident was reported on November 25 when altogether 56 passengers from Sri Lanka arrived at the Cochin International Airport in Kerala carrying approximately 11 kilograms of solid gold worth over Rs.30 million. The Air Intelligence Unit of the Cochin International Airport apprehended two groups, one on Sunday morning where 42 passengers were arrested of whom 28 were females and 14 passengers were arrested on Monday.

The first group came wearing gold jewellery weighing up to 10 kilograms while the last group wore jewellery weighing around 1.7 Kgs. Some of the men had worn these around their necks covered by large collars and some females had concealed them in their undergarments. Initial investigations revealed that many of the arrested passengers were constant visitors to India especially to the South Indian ports such as Chennai, Madurai and Cochin. Some of them had even travelled five to six times a month up and down, the Indian media reported.

Although this may be the first time the Indian authorities came across such occurrence Commissioner of Customs of the Cochin International Airport K N Raghavan said he knew little about the number of instances to smuggle crude gold into India, being thwarted by the local Customs officials during the past few months. Smuggling gold out of the country has been on the rise since lately as the perpetrators rely on various peculiar ways to do so as the Sunday Observer exposed a few weeks back.

There we revealed how individuals invent unusual methods to export gold (eg. concealing in their rectums) and even how they risk internal injuries as a result. Local traders including a few foreigners were among the captives of the Customs Department and airport security units. According to latest Customs reports over 50 instances of attempting to smuggle raw gold had been detected since January 1 to date. The amount of gold seized in these detections weigh around seven to eight kilograms worth over Rs.100 million.

The inquiries conducted by the local Customs revealed that the group that was taken into custody in Cochin had left the country as a group visiting a wedding ceremony. Customs Spokesman Director Leslie Gamini said the need to draft new laws was much felt following the incident. Top level meetings representing senior official from the Preventive Division and the Legal Division were held with the Customs Director General last week who finalised a set of regulations to be imposed on the travellers who wear or carry gold jewellery along with them.

Previously the authority to grant permission to carry gold jewellery had been vested with the Government Exchange Controller under the Exchange Control Act. This authority was however transferred to the Customs Director General in 1994 due to the practicality of looking to the instances of exporting or carrying jewellery case by case.

According to the new regulations there is an authorised quantity of gold jewellery permitted to be carried by the individuals described in the circular. These amounts vary on the person who is carrying or wearing them. And they have to be departing travellers who would carry jewellery on bring back basis.

Departing travellers who are permanent-residents in Sri Lanka are permitted to carry in person or Bona Fide personal baggage articles of jewellery up to the following limits, on bring-back basis:

• Articles of gold jewellery per female traveller: Adult - fifteen (15) sovereigns.

• Articles of gold jewellery per male traveller: Adult - five (5) sovereigns.

• Articles of gold jewellery per minor traveller: Five (5) sovereigns.

• Articles of gold jewellery should not be in crude form or of gold in inwrought or semi-manufactured forms and, should be industry manufactured.

• Carrying articles of gold jewellery contrary to above limits and conditions shall be dealt with the provisions of Customs Ordinance and/or decided appropriately including exercise of discretion of the Director General of Customs.

The important clause about this is the jewellery being taken should be industry manufactured ones, which in other words mean that clusters of pawned jewellery that are being melted into raw portions are never allowed. The definitions of Articles of Jewellery and Precious Metal Alloys are described as follows.

Articles of Jewellery: (a) Any small objects of personal adornment (for example, rings, bracelets, necklaces, brooches, earrings, watch-chains, fobs, pendants, tie-pins, cuff-links, dress-studs, religious or other medals and insignia); and (b) Articles of personal use of a kind normally carried in the pocket, in the handbag or on the person (for example, cigar or cigarette cases, snuff boxes, cachou or pill boxes, powder boxes, chain purses or prayer beads). These articles may be combined or set, for example, with natural or cultured pearls, precious or semiprecious stones, synthetic or reconstructed precious or semi-precious stones, tortoise shell, mother-of pearl, ivory, natural or reconstituted amber, jet or coral. (Clause No.9 of Harmonized System notes of Chapter 71 for the purposes of heading 71.13.) Precious metal alloys: For the purposes of this Chapter, any alloy (including a sintered mixture and an inter-metallic compound) containing precious metal is to be treated as an alloy of precious metal if any one precious metal constitutes as much as two percent, by weight, of the alloy.

Alloys of precious metal are to be classified according to the following rules: (a) An alloy containing two percent or more, by weight, of platinum is to be treated as an alloy of platinum; (b) An alloy containing two percent or more, by weight of gold but no platinum, or less than two percent, by weight of platinum, is to be treated as an alloy of gold; (c) Other alloys containing two percent or more, by weight, of silver are to be treated as alloys of silver. (Clause No.5 of Harmonised System notes of Chapter 71.) Also 1 Sovereign of gold = 8 grams of gold. Although the law is described like this the Customs Officer holds the authority to permit a passenger with his or her jewellery depending on the situation as defined by the term Bona fide.

For instance a female traveller who is to depart the country with possessing a gold necklace of 20 sovereigns the Customs Officer in charge has the authority to grant permission considering a reasonable explanation. This will not entirely serve the purpose as there is a lot of confusion involved in this new law whereas travellers are only permitted to carry industry manufactured jewellery made to the common designs.

According to the latest trends seen in the west, people tend to wear novel designs of jewellery that does not even symbolise an actual design but gives a crude element. If this is the case it would be tricky for the Customs official who anxiously waits to put a tab to this problem.