Daily Management Review

World Gold Markets Flooded With Dirty Gold Carrying Fake Brand Logos


08/30/2019




World Gold Markets Flooded With Dirty Gold Carrying Fake Brand Logos
The global gold industry is being quietly roiled by a forgery crisis.
 
According to recent reports, laundering of smuggled or illegal gold is taking place wherein logos of major refineries are being fraudulently embossed on gold bars and being inserted into the global gold market.
 
Such fake or illegal gold is very hard to detect which makes it a very popular way for generate funds for the cartels engaged in narcotics or for the warlords.
 
All four of Switzerland's leading gold refiners have, in the last three years, identified bars that were fraudulently stamped with Swiss refinery logos but were not made there. The worth of those illegal gold was at least $50m and were found to lie in the vaults of JP Morgan Chase & Co which is perhaps the most important international bank that operating in the global, bullion market, said reports.
 
The reports further said that Swiss authorities have found least 1,000 such bars which were of a standard size known as a kilobar, based on the weight of the bars. In comparison to the total output of the global gold industry – at between 2 million to 2.5 million such bars that are churned out each year, that number is very small. However what makes these forgeries important is the degree of sophistication that goes behind the duplicates and therefore it is possible that thousand more such fraudulently stamped gold bars go undetected, said the chief of the biggest refinery of Switzerland'.
 
"The latest fake bars ... are highly professionally done," said Michael Mesaric, chief executive of refinery Valcambi. While a couple of thousand such bars have been found, there is high likelihood that there are "way, way, way more still in circulation. And it still exists, and it still works," he said.
 
It is relatively easy to identify fake gold which is made of blocks of cheaper metal that are plated with gold.
 
However in this case, the counterfeiting is much more sophisticated because the gold is real and most often of a very high quality but the stamp or the refinery markings are duplicated. This modus operandi of making use of fake-branded bars is something new to the global gold industry and is primarily used to bypass the international measures that have been put into place to prevent conflict minerals from entering into the market and to stop any money laundering using gold. The effort to purge the world of illicit trade in bullion by refiners, financiers and regulators is challenged by such forgeries.
 
Since the mid-2000s, a boom in the informal and illegal mining of gold had been triggered by high prices of gold. If such gold did not have the stamp of a legitimate and prestigious refinery, it would be forced to be moved into the underground market or be sold at lower prices.
 
This duplicating of the marks or imprints of Swiss and other major brands, it is possible to inject gold mined or processed in areas of conflict, human rights abuses, or sanctioned regimes into the global market. Gold form such places are not allowed to be traded in the global gold market such as those from parts of Africa, Venezuela or North Korea. However this forgery allows the producers of such gold to sell the gold in the market and generate funds.
 
(Source:www.aljazeera.com)






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