In­voice fraud rife in SA gold ex­ports: re­port

The Pak Banker - - BUSINESS -

CAPE TOWN: South Africa was fin­gered in a re­port for fla­grant dis­crep­an­cies be­tween its of­fi­cial trade sta­tis­tics of gold ex­ports ver­sus the records of its trad­ing part­ners.

Ac­cord­ing to in­for­ma­tion pub­lished by the United Na­tions Con­fer­ence on Trade and De­vel­op­ment (UNC­TAD), South Africa's trade data for gold showed cu­mu­la­tive gold ex­ports of $34.5bn from 2000 to 2014, whereas its trade part­ner data re­vealed an amount which was more than three times higher at $116.2bn.

"This is in­dica­tive of mas­sive ex­port un­der-in­voic­ing," the re­port said. To­tal mis­in­voic­ing of gold ex­ports to South Africa's lead­ing trad­ing part­ners amounted to $113.6bn over the 15-year pe­riod. "In other words, vir­tu­ally all gold ex­ported by South Africa leaves the coun­try un­re­ported."

The re­port, which was re­leased on Sat­ur­day at a global com­modi­ties fo­rum in Nairobi, Kenya, sug­gested that the gold sec­tor in South Africa de­serves close scru­tiny to iden­tify the fac­tors that may be gen­er­at­ing in­cen­tives and op­por­tu­ni­ties for sys­tem­atic ex­port un­der-in­voic­ing.

"The puz­zling case of gold ex­ports from South Africa, where the coun­try's of­fi­cial sta­tis­tics re­port very lit­tle gold ex­ports, while sub­stan­tial amounts ap­pear in its lead­ing trad­ing part­ners' records, does not ap­pear to be a sim­ple mat­ter of un­der­val­u­a­tion of the quan­ti­ties of gold ex­ported, but rather a case of pure smug­gling of gold out of the coun­try," the re­port said. The UNC­TAD re­port in­ves­ti­gated the in­ci­dence of mis­in­voic­ing (in­voice fraud) in five coun­tries, namely South Africa, Chile, Côte d'Ivoire, Nige­ria and Zam­bia.

Trade mis­in­voic­ing im­plies that money is be­ing moved il­lic­itly across bor­ders, which in­cludes de­lib­er­ate mis­re­port­ing of the value of a trade trans­ac­tion.

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