4/23/2021 0 Comments Tracking Serial Numbers Gold Bars
Bars returned to Switzerland have been reported by refiners to the Swiss authorities who impounded them, refiners said.Gold bars fraudulently stamped with the logos of major refineries are being inserted into the global market to launder smuggled or illegal gold, refining and banking executives tell Reuters.The fakes are hard to detect, making them an ideal fund-runner for narcotics dealers or warlords.
In the last three years, bars worth at least 50 million stamped with Swiss refinery logos, but not actually produced by those facilities, have been identified by all four of Switzerlands leading gold refiners and found in the vaults of JPMorgan Chase Co., one of the major banks at the heart of the market in bullion, said senior executives at gold refineries, banks and other industry sources. Four of the executives said at least 1,000 of the bars, of a standard size known as a kilobar for their weight, have been found. That is a small share of output from the gold industry, which produces roughly 2 million to 2.5 million such bars each year. But the forgeries are sophisticated, so thousands more may have gone undetected, according to the head of Switzerlands biggest refinery. He said maybe a couple of thousand have been found, but the likelihood is that there are way, way, way more still in circulation. Fake gold bars - blocks of cheaper metal plated with gold - are relatively common in the gold industry and often easy to detect. The counterfeits in these cases are subtler: The gold is real, and very high purity, with only the markings faked. Fake-branded bars are a relatively new way to flout global measures to block conflict minerals and prevent money-laundering. Such forgeries pose a problem for international refiners, financiers and regulators as they attempt to purge the world of illicit trade in bullion. High gold prices have triggered a boom in informal and illegal mining since the mid-2000s. Without the stamp of a prestigious refinery, such gold would be forced into underground networks, or priced at a discount. By pirating Swiss and other major brands, metal that has been mined or processed in places that would not otherwise be legal or acceptable in the West for example in parts of Africa, Venezuela or North Korea can be injected into the market, channeling funds to criminals or regimes that are sanctioned. Once accepted by a mainstream gold dealer in these places, they can quickly spread into supply chains worldwide. Word of the forged bars began to circulate quietly in gold industry circles after the first half of 2017, when J.P. Morgan, one of five banks which finalize trades in the 10 trillion-a-year London gold market, found that its vaults contained at least two gold kilobars stamped with the same identification number, 10 people familiar with the matter told Reuters. Reuters couldnt determine exactly where the vaults were. J.P. Morgan declined to directly address questions about the fraudulent bullion, or comment on any of the details in this story. Its our standard practice to immediately alert the appropriate authorities and refineries should we discover mismarked gold kilobars during routine checks and procedures, the bank said in a statement. Fortunately, we have yet to have an incident resulting in a loss to the firm or a client. The Shanghai Gold Exchange, which regulates Chinas gold market, said in a statement it was not aware of counterfeit bars being made in or transported through China. ![]() The process for gold (material) to enter the warehouse is strictly managed and in compliance with the regulations, it said. When others who store and trade such gold found forged bars, they returned them to the refiner concerned, some of whom have operations in Asia.
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