Govt mulls tripling taxes, forfeiture of assets to curb gold smuggling

– as GGMC embarks on countrywide campaign

In light of the US-instituted sanctions against Guyanese businessmen and gold dealers Nazar and his son Azruddin Mohamed, coupled with the recent arrest of three smugglers at the country’s main international airport, the Guyana Government is looking to strengthen its laws to institute stiffer financial penalties as a deterrent to gold smuggling.
During a press conference on Thursday, Vice President Dr Bharrat Jagdeo pointed out that under the current Gold Board Act, the penalty for Gold smuggling is “small” which does not deter perpetrators.
“We need to strengthen the charges and the penalties for illegal export of gold or smuggling of gold abroad by these large smugglers. Secondly, we need to strengthen financial penalties so in Customs, if you evade taxes and you smuggle goods and you have undeclared goods, you have to pay [a] fine of triple the duty value,” the Vice President said.
Earlier this month, two US citizens and one Guyanese were intercepted with US$560,000 worth of raw gold at the Cheddi Jagan International Airport (CJIA) at Timehri. They were subsequently charged for Exporting Gold without a License – in contravention of Section 8 of the Guyana Gold Board Act, Chapter 66:01, contrary to section 23 (a) of the said Act. They were granted bail totaling $600,000.
According to the Vice President, the trio will also face charges under Guyana’s Anti-Money Laundering (AML) law.
Further in the recent sanctions against the Mohameds family and their associated businesses earlier this week, the United States alleged that some 10,000 kilograms of gold were smuggled out of this country between 2019-2023.
The US Department of the Treasury’s Office of Foreign Assets Control (OFAC), which announced the sanctions on Tuesday, alleged that by under-declaring their gold and evading paying taxes on exports, the Mohameds defrauded the Guyana Government of more than US$50 million in duty taxes.
During Thursday’s press conference, VP Jagdeo explained that smugglers are currently only asked to pay the estimated taxes they evaded by smuggling the mineral resource, but this is a small amount compared to the value of the gold smuggled.
“In this case, it’s estimated that the US$50M we lost is 7% of the total value of the gold because that is the royalty, and tax rates amount to 7% of the value of the goods. If you had to pay triple the value on that, you’ll probably have to pay a penalty of 24% of the value of the gold, something of that nature [the government is looking to impose],” he stated.
Along with increasing the penalty, the Vice President added that efforts could also be made to forfeit assets accrued with earnings from illegal activities.

“So, if you get caught, there is a big risk you get charged under an Act that has a severe penalty; secondly, there is a big financial risk because you have massive fines; and thirdly, we may have to start exploring what we did under the laws dealing with money laundering or drug trafficking – forfeiture of assets arising from illegal proceeds.”
According to Jagdeo, such stringent changes are necessary since the Government in the past tried incentivizing persons to encourage compliance with the law. These incentives include lowering taxes but he noted that people are still not deterred.
Additionally, the VP disclosed that there are currently six dealers licensed to export Gold through a process monitored by the Guyana Revenue Authority (GRA) and the Guyana Gold Board.
GGMC Warnings
Meanwhile, on Friday, the Guyana Geology and Mines Commission (GGMC) reminded stakeholders in the mining sector of the legal requirements and obligations regarding the sale of gold.
Under Sections 6 and 8 of the Guyana Gold Board Act, persons who possess gold as a producer (miner) or a Tributor, are required to SELL ALL gold to the Guyana Gold Board, or an authorized buyer.
An authorized buyer may be one of six licenced Gold Dealers currently licenced by the Gold Board, or persons/entities who are Licenced Traders in gold as authorized by the GGMC. The Gold Board has offices in Georgetown, Port Kaituma, and Bartica as well as conducts periodic mobile transactions in other Mining Districts.
“The relevant law enforcement and regulatory agencies are continuing with decisive actions to ensure that all gold mined is sold to licensed Dealers, Traders, or the Guyana Gold Board. Persons in breach of this legal requirement will be subject to criminal prosecution. More importantly, miners with existing property tenures within GGMC who are complicit with these illegal activities will risk losing their tenures, and/or being restricted from the mining sector. Miners are urged to abide and operate within the confines of the legal requirements for the sale of gold and remain vigilant in ensuring that all gold transactions are conducted through official channels,” the GGMC implored in its Notice.
In another Notice, the Commission also cautioned all goldsmiths, jewellers, and individuals engaged in the purchase of gold that the mineral they use must be exclusively bought from the Gold Board, which is the only entity authorized to sell gold within Guyana.
In keeping with Section 8 of the Guyana Gold Board Act, it is illegal for any person to sell any gold to a goldsmith or jeweller, or for a goldsmith or jeweller to purchase any gold from any person/entity other than the Guyana Gold Board.
Section 58 of the Tax Act guides that by way of an application to the GGMC for a Goldsmith’s Licence, the gold for the purpose of the business must be bought from the Guyana Gold Board.
The GGMC further reminded that the very Section 58 also imposes on licenced Goldsmiths, specific reporting obligations to the Commission within seven days of every month on the quantities of gold purchased, used and the amount on hand on the last day of every month as well as the name and address of every person from whom the gold is bought.
“The GGMC will be embarking on a countrywide enforcement exercise to ensure that all goldsmiths and/or jewellers abide by the legal and reporting requirements as stipulated by law,” the Commission warned. (G-8)