China likely source of pirated gold bars in global market

Dirty gold bearing mark of prestigious refiners found in major US bank

Pixabay image

Pixabay image

TAIPEI (Taiwan News) – Bars of gold fraudulently stamped with well-known refineries' logos are believed to be making their way to the global market, and China is allegedly the major source of the scam, according to reports.

Reuters revealed that at least 1,000 fake gold bars bearing Swiss refinery logos and worth a total of US$50 million have been discovered in the vaults of JPMorgan Chase & Co., a major bank dealing in bullion. Thousands more sophisticatedly forged bars are feared to be in circulation, said one official of a refinery in Switzerland.

The bars, made of genuine gold, were counterfeited to evade global regulations that are in place to crack down on conflict minerals and money laundering. Metal mined or processed illegally or in places not accepted by the West, such as North Korea and certain African countries, has a higher chance of slipping into the market via brand pirating, wrote Reuters.

Bankers said that they believe the fake-branded gold bars may have originated in China, the leading gold importer and producer. The bars may have been traded in Hong Kong, Japan, and Thailand before spreading through global supply chains.

The export of gold is mostly prohibited in China due to its capital movement controls. Precious metals consultant Cameron Alexander claimed that an estimated 400 to 600 tons of gold are smuggled from China to Hong Kong every year in car trunks, reported Reuters.

From jewelers to banks, those who in possession of the counterfeited bars risk inadvertently breaching global rules to prevent metals of criminal origin from entering circulation. The regulations are intended to curb funding for terrorism and conflict as well as activity by gold suppliers that damages the environment, said the report.