Japan's underworld turns to gold for a quick buck

http://www.dw.com/en/japans-underworld-turns-to-gold-for-a-quick-buck/a-39119095

05.06.2017

Japan's underworld turns to gold for a quick buck

When officials from the Japan Coast Guard boarded a squid fishing boat off Kyushu, southern Japan, on June 1, their suspicions were immediately aroused. The vessel was carrying no fishing equipment but had five Japanese nationals, three men with documents showing them to be Chinese and a number of large - and heavy - plastic cases aboard. When the cases were opened, they revealed 206 bars of gold measuring about 11centimeters long by 5 centimeters wide and 1 centimeter thick. Tests subsequently conducted by customs officials in the town of Moji suggest the gold bullion has had assay marks scraped off, but that it has a high purity and is worth around 1 billion yen (8.05 million euros).

The seizure is the largest single amount of gold to be intercepted being smuggled into Japan - but experts here believe that it is merely the tip of the iceberg as the nation's hard-pressed "yakuza" underworld groups move into a new and lucrative new criminal enterprise. And a number of high-profile cases in recent months support those assumptions.
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Domestically, gold has become an even more attractive item since the Japanese government raised the consumption tax on goods from 5 percent to 8 percent in April 2014. In comparison, the consumption tax on gold in Hong Kong is zero, so it is significantly cheaper to purchase the precious metal in Hong Kong and sell in Japan on the black market, avoiding the taxes. Demand will be further fuelled in the future as the Japanese government is committed to increasing the tax to 10 percent in the future.

Japanese customs detected just eight attempts to smuggle gold into Japan in the 12 months to June 2014, according to the Coordination Division of the Finance Ministry in Tokyo. Underlining the new-found appeal of the underground trade, that figure climbed to 177 cases the following year and had reached 294 incidents in the year to June 2016.
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