Afghanistan, one of the poorer nations in the world, is witnessing a sharp exodus of gold to Dubai and other nations, according to the New York Times. Noorullah Delawari, the governor of Afghanistan’s Central Bank has termed the recent spike in gold transport as suspicious.
According to reports, there has been a sharp increase in gold trafficking since last summer. Several passengers on commercial flights from Kabul to Dubai have been seen carrying bags full of gold. Over the last two weeks of October, gold worth $14 million and weighing over 250 grams has left the country via this route, the reports add. All this gold is fully declared and being sent legally. Some of this is sent by the gold dealers to craftsmen in the United Arab Emirates and other countries for redesigning. Talking to The New York Times, Noorullah said, “I don’t know where so much gold would come from,” and added that an investigation was being conducted into the matter, The country’s authorities are ready to intervene and take action if it finds evidence of money laundering, the Central Bank governor said.
Afghanistan officials may, however, find it difficult to establish the truth because 90% of the country’s financial activity is not done via formal banks. Also there are very few written contracts and book keeping which means it will be difficult to track the amount of gold that has gone out of the country. Money launderers in the country often serve corrupt officials, drug lords and Taliban. Undertaken largely in the form of smuggling of bulk loads of paper bills, money laundering is a serious issue. According to Afghanistan’s central bank estimates currency worth $4.5 billion comprising of bank notes of various currencies left via Kabul International Airport last year. Recent years have also seen movement of gold via this route.
The main reason for the movement of significant amount of cash and gold from Afghanistan to Dubai is the lax oversight standards of the United Arab Emirates. Experts view the surge in gold trafficking as symbolic of Afghans taking precautions against the return of Taliban in their country.
Another reason being attributed to this growing gold trafficking is Iran trying to circumvent US and EU sanctions. A Kabul-based dealer told the New York Times that Afghan gold dealers exchanged Iranian gold for oil or Rial, the currency of Iran, and then sold the gold in Dubai for dollars. The money is then routed to China to buy goods which are then sent to Iran.
The trafficking is not confined to Dubai alone, according to political analyst and former Afghan MP Daoud Sultanzoy. He said that India is also a destination for gold leaving. Afghanistan and that gold trafficking is most likely used to launder profits from illegal trades such as drug and arms and other criminal activities.