Gold Smuggling and Budget Airlines – Gaijinhan

Gold Smuggling and Budget Airlines

Japan is the land for gold smuggling especially since consumption tax increased from 5% to 8% in April 2014, and is expected to increase even further if the planned increase to 10% in October 2019 is pushed forth as planned.

On the surface, the two seem very disparate and unrelated, but there is basis for this correlation. While consumption tax in other countries like Europe is much higher than in Japan, sale of gold is typically not taxed (true for many countries around the world). Further, the price of gold is quite consistent across the world, hence, in Japan where gold is also taxed, smugglers try to get in through illegal means and sell the gold here and profit off the consumption tax. Which means, if I pay $1,000 for gold in Europe, I can sell it for $1,080 in Japan.

But while smuggling isn’t that easy, smugglers have made use of budget airlines to escape the customs. How this works is, an airline like Vanilla Air uses the same aircraft for domestic and international flights. And for an aircraft scheduled to fly from Taoyuan International Airport (Taipei)→Kansai International Airport (Osaka)→Amami Airport (Kagoshima), smugglers would board the flight from Taipei, and hide the gold in the toilet. Being an international flight, exiting at Kansai means they have to go through customs, so they would leave the Kansai Airport without the gold, and transfer to the same aircraft under domestic flight from Kansai to Amami airport and collect their loot from the toilet. This way, they can avoid the customs since domestic travel does not require passing through customs.

But this has been discovered by the airline and they are now making very stringent checks of the toilets as they’ve seen parts of the toilet being unscrewed and packs of gold hidden inside them.

From the amount of thought put into the smuggling, you can tell it’s no Tom, Dick, and Harry planning the smuggle but shrewd minds behind the illegal activity. It always boggles my mind that if these people are that smart, why they do not put that into legal ways of making money. Is it really worth the risk?

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