How Japan’s criminal gangs are making a fortune from gold bought in Hong Kong

Police in southern Japan are still searching for a gang of three men who pulled off a daring daylight robbery earlier this month, a crime that netted them Y364 million (US$3.2 million) that was to be used in a gold deal and simultaneously highlighted the city of Fukuoka as the centre of the nation’s gold smuggling industry.

According to police, a high percentage of the illegal imports are coming from Hong Kong.

Japanese customs detected a mere 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.

Gold has become a hot item in Japan since the government raised the consumption tax on goods from 5 per cent to 8 per cent in April 2014. Illegal imports are unlikely to dry up in the future as the government is committed to its plan to increase the tax to 10 per cent in the future.

In comparison, the consumption tax on gold in Hong Kong is zero, so it is significantly cheaper to buy the precious metal in Hong Kong and sell in Japan on the black market, avoiding the taxes.

Officials point out that the smuggling figures are only the attempts they intercept. They have no way of determining how much gold is successfully smuggled into Japan.