South Africa

Precious Cargo

Madagascar eyes 73.5kg of ‘smuggled’ gold seized in hand luggage at OR Tambo

A 20 kilogram gold brick is handled by a worker at the ABC Refinery in Sydney, New South Wales, Australia on Thursday, July 2, 2020. Photographer: David Gray/Bloomberg

Three suspects travelling from Madagascar were arrested at OR Tambo International Airport about two weeks ago when gold bars weighing 73.5kg were found — in their hand luggage. Ministers in Madagascar now apparently want the gold, which is at the centre of an international investigation, sent to their country and the suspects extradited.

On 4 January, police announced that three suspects had been arrested days earlier after a security scanner picked up irregular images, presumably of their hand luggage.

“The trio had just flown into South Africa from Madagascar and were en-route to Dubai via Ethiopia last week when they were apprehended,” spokesperson Colonel Athlenda Mathe said.

“Upon questioning of the suspects and further inspection of their hand luggage, officials discovered the gold bars and some foreign currency.”

While police said the gold bars had a street value of about R61-million, they could, based on the value of a kilogram of gold and depending on the quality of the gold, fetch around R67.5-million on the legal market, according to website market charts.

Members of the police’s organised crime unit were investigating the matter.

So were members of the Hawks, along “with the assistance of Interpol with authorities from various countries to determine the legitimacy of the certification papers as provided by the men and also to determine the country of origin where the gold was mined”.

The three suspects, who face charges of illegal dealing in precious metals and the contravention of the Customs Act, were back in the Kempton Park Magistrates’ Court on Tuesday. The case against the three — Francis Deliot Regasy, Mahamodo Mahavanona and Zava Herimanana Anjaranantenain — was postponed to 1 February.

Meanwhile, Madagascar’s Council of Ministers issued a statement days after news of the arrests surfaced, saying every effort had to be made to try to have the gold brought to its central bank.

They also appeared to want the three suspects extradited.

This seemed to tie in with moves to clamp down on illicit trades.

The Madagascan statement said they would cooperate with the South African government.

Department of Justice and Constitutional Development spokesperson Steve Mahlangu said on Tuesday it had not received any extradition requests, or an indication of requests, from Madagascan authorities.

“It should also be kept in mind that the requests, when made, must be submitted through the diplomatic channel,” he said.

While it is not yet clear if Madagascar and Dubai were the start and endpoints of the suspects’ journey, and whether these destinations were the origin and end destination of the gold bars, these countries hold clues about the global illicit gold trade.

In a 2018 report on anti-corruption initiatives in Madagascar, German NGO Transparency International, found that: “Gold mining, on an artisanal and small scale, appears controlled by a network of powerful traders who are allegedly involved in smuggling. Government officials appear to be complicit or incompetent to stop the smuggling.”

In April 2020, Reuters reported that “billions of dollars’ worth of gold is being smuggled out of Africa every year through the United Arab Emirates (UAE) in the Middle East — a gateway to markets in Europe, the United States and beyond.”

It further said that Dubai was “home to the UAE’s gold industry”.

Italian politician Fulvio Martusciello, referring to Reuters articles, asked the European Parliament in April 2020 about the UAE as “a major trading hub that receives, processes and ‘launders’ African gold”.

“In addition to tax avoidance and health and safety implications, the surge in the volume and scope of the illegal gold trade has given rise to grave security concerns,” he said. “Revenue from gold smuggling appears to be financing jihadist radicalisation and armed conflict in Africa, and the battle for control of the gold mines is destabilising and impoverishing states.”

Martusciello wanted to know if countries such as the UAE would be pressured to help combat the smuggling.

In his reply, Josep Borrell, High Representative of the European Union (EU) for Foreign Affairs and Security Policy, said: “Gold is one of the four metals covered by the EU Conflict Minerals Regulation, which will require compliance with the principles of transparency for any gold importer in the EU from January 2021, in order to prevent this trade from indirectly contributing to conflict.” DM

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