Smugglers switched to new way of operating during pandemic: report

New Delhi:

The COVID-19 pandemic has forced smugglers and smugglers to adapt quickly to the dynamics of changing circumstances. annual report — Smuggling in India Report 2021-22.

In the report, a chapter — Smuggling: Emerging Trends During the Pandemic — provides a bird’s-eye view of the overall trends that have emerged during the pandemic. It reported on the various aspects of smuggling gold, narcotics and other contraband such as cigarettes.

Gold

According to the chapter in the report, India is the second largest consumer of gold in the world after China. India’s gold imports were worth $34.62 billion in 2020-21 and increased by 33.34 percent to $46.14 billion in 2021-22. The volume of smuggling has increased during the period when economic activities gradually opened up following COVID-related lockdowns.

A crucial trend shift was noticed by DRI in 2019-20, with the largest amount of gold seized by the agency in 2020-21 and 2021-22 coming from Myanmar. According to the report, in 2019-2020, the Middle East was the largest source country or region of smuggled gold.

It added that during the pandemic, due to the widespread disruption of air traffic, there was an increase in cases of gold smuggling over land routes (road or rail).

Foreign currency

The report said the smuggling of foreign currency from India, which exceeds limits prescribed by the Reserve Bank of India, emerged as a serious threat to India’s economic security during the pandemic. With the disruption of the traditional methods of hawala settlements across the country, the DRI report said physical smuggling of foreign currency has often been the resort of choice for those seeking to move liquid value across borders without detection.

Hawala offers anonymity in its transactions as no official records are kept and the source of money transferred cannot be tracked.

The Financial Action Task Force (FATF) also recognizes the physical movement of currency as a critical method of money laundering around the world, the report said, adding that cash is still widely used in the criminal ecosystem and it remains the source of most criminal activity. .

In many cases, even when the proceeds of a crime are initially generated electronically (such as the theft of money from a bank account), criminals choose to take the money from a bank account in cash, transport it to another country and transfer it to another account to erase the audit trail, according to the report.

Cigarettes

Cigarette smuggling is another concern, the report said. It said India’s high tax on cigarettes results in a tax arbitration in favor of smuggled cigarettes on which no tax is paid. Arbitrage is the simultaneous buying and selling of the same or a similar asset in different markets to take advantage of small differences.

Drugs

The report said an increasing number of cases were discovered where narcotics were found to have been smuggled via the cargo route. This can be largely attributed to the loss of passenger air traffic during the pandemic and also to the recent political changes in Afghanistan.

Red sanders

In 2018, red sanders (Pterocarpus santalinus) were reclassified as a “near threatened” species from its previous classification of “threatened,” according to the DRI report.

The wood of most red sanders has a normal grain. However, there is also a rare variety with a ‘wavy’ grain that fetches higher prices in the international markets. The agency’s report said that the high demand and price in the international market is the main cause of the illegal logging and smuggling of red sanders.

It also said that the demand for red sanders would be mainly in countries such as China, Japan, Hong Kong, Singapore and Myanmar where they are used for making furniture, dyes, musical instruments and also for medicinal purposes.

DRI is the highest anti-smuggling body of the Indian Customs Service and comes under the Ministry of Finance.

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