The Yakuza Landscape Today

Golden Crimes: Growing Smuggling Problem Exposed by High-Profile Robberies

Society

Gold smugglers who evade consumption tax requirements at Japanese customs can make large profits by selling the precious metal at tax-inclusive prices. The trade has expanded since the 2014 hike in consumption tax to 8%, and the huge sums of money involved have led to robberies of gold and cash.

A Gold-Smuggling Triangle

Gold smuggling has become a more attractive proposition since the Japanese consumption tax rose from 5% to 8% in April 2014. Its appeal will rise even more when the further hike to 10%, planned for October 2019, is complete.

Criminals purchase gold bars in Hong Kong, where there are no restrictions on carrying gold out or currency in, and fly to South Korea. In the transit area at Incheon International Airport, they divide the bars up among a number of “mules,” who convey them undeclared through Japanese customs. The gold is then sold in Japan at a price including the 8% tax, and the criminals take the cash back to Hong Kong.

Starting with ¥100 million worth of gold yields profits of ¥8 million. Then ¥108 million in gold can be turned into ¥116.64 million. The money soon mounts up. Although there are transportation and other basic costs, many smugglers conduct several transactions each week, allowing them to double their initial investment in just a month.

A String of Crimes

The incidents described above are just two examples of crimes connected to the gold trade. In March 2017, two employees of the city of Osaka were arrested trying to smuggle six kilograms of gold bars worth ¥27 million from South Korea. They said they had repeatedly engaged in smuggling in the spirit of a side job, after being asked to do so by a pachinko buddy.

Immediately after the Tenjin parking lot robbery, four South Koreans were apprehended while attempting to take ¥435 million in cash undeclared through customs. Fukuoka Prefectural Police stated that they were members of a large gold smuggling ring based in South Korea and that the cash appeared to be earnings from selling smuggled gold. In the course of the investigation, police learned that 30 mules boarded various flights from Incheon in one day, carrying a total of 150 kilograms of gold bars into Fukuoka.

Around the same time, there was another roadside incident in Ginza, Tokyo, where a bag containing ¥72 million in cash was stolen immediately after a gold transaction.

Gold bars and fake cosmetics cases used in a smuggling attempt from South Korea on display on June 15, 2017, at Narita Airport in Chiba Prefecture. (© Jiji)

The existence of a sea route emerged in May 2017 when investigators found 206 kilograms of gold in a squid fishing boat at a port in Karatsu, Saga Prefecture. It was identified as having been smuggled by a group including Chinese members.

The above represent only the crimes that have come to the surface. It is likely there have been many robberies where the victims could not make any report because of their own involvement in smuggling.

Ultimately, huge amounts of money that should be paid to the Japanese state in consumption tax is ending up in the hands of criminals.

(Originally published in Japanese on January 16, 2018. Reporting and text by Power News. Banner photo: A police team conducts an investigation on April 20, 2017, on the site of a robbery of ¥380 million in cash in Tenjin, Fukuoka. © Jiji.)

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