With NIA probing Kerala case, gold smuggling to get tougher

So far, investigations into gold smuggling cases were carried out by Customs officials and the Directorate of Revenue Intelligence because the NIA does not have the legal mandate to probe such cases under the Customs Act

With the National Investigation Agency (NIA) turning its focus on gold smuggling, conducting such activities is likely to become even tougher, at least for a couple of months, according to market and official sources.

The NIA is currently investigating the Kerala gold smuggling racket, in which the accused Swapna Prabha Suresh and Sandeep Nair allegedly forged the seal and emblem of the UAE Embassy to commit the crime. According to the central probe agency, the smuggled gold was to be used not for jewellery but terror activities.

So far, investigations into gold smuggling cases were being carried out by Customs officials and the Directorate of Revenue Intelligence (DRI) because the NIA does not have the legal mandate to probe such cases under the Customs Act, official sources said. This is for the first time that the NIA has taken over such a probe, citing terror link.

Customs officials had busted the gold smuggling racket on July 5 when they seized 30 kg gold from a chartered flight from the

UAE which was carrying a consignment for the UAE consulate in Thiruvananthapuram.

The investigation revealed that Swapna, who earlier worked with the UAE consulate before her association with the Kerala state secretariat, bought the gold camouflaged in diplomatic baggage — usually exempted from inspection.

Initially, the Customs had started the investigation but later the NIA was asked to i nvestigate t he case under t he Unlawful Activities (Prevention) Act, 1967. In 2013, too, a consignment of gold, smuggled in diplomatic baggage, was caught, but then the DRI had conducted the probe.

The NIA is set to investigate many other consignments allegedly brought to India by the same gang thus far. Official sources said: “The NIA probing the gold smuggling case is a sensitive development. The agency will try to find out the kingpin of the racket and those who were buying smuggled gold.”

According to market sources, “the fear of the NIA investigation will help put a halt on smuggling activities, though they may resume once the matter cools down.”

With routine international flights not operating, cases of gold smuggling were already down, said official and market sources. In 2019, according to a Metal Focus report, 119 tonne of gold entered India illegally.

The impact of reduced gold smuggling is already visible in the market. With official gold import almost nil, investment demand rising, and stoppage of unaccounted gold supply, market price discount has gone.

Market sources said gold is smuggled usually for two types of customers: Retail, for whom carriers like tourists are used, and corrupt politicians and government officials, who buy from rackets similar to the one involved in the Kerala case.

“Gold smuggling in Kerala will certainly come to a halt for now. Smugglers are working like terrorist sleeper cells in which a layer has information only about the one above it. Finding out the kingpin would be difficult. Couriers only smuggle the gold into India and deliver it to a certain person and the chain continues. The NIA is investigating a case which has both national and international links and the proceeds of smuggled gold could have been used for financing of terrorism in India,” said an official source tracking the developments.