Japan Sees Surge In Gold Smuggling As Yakuza & Wealthy Chinese Team Up

In a story that was seemingly tailor-made for the tabloids, Japanese news agency Nikkei is reporting that, in an unusual but tantalizing example of financial symbiosis, wealthy Chinese investors are teaming up with Yakuza gangsters to smuggle gold into Japan. The payoff for each side is simple: Chinese investors, who are increasingly fearful that a depreciating yuan will create turbulence in local stock and bond markets, can circumvent China’s stringent capital controls and move their money out of the country. And by cheating the Japanese government out of a consumption tax, the Yakuza stand to make a healthy profit.

“The argument goes that the rich, having lost confidence in the Chinese yuan and with investment in other assets becoming difficult, are turning to gold smuggling to move their wealth out of the country. They supposedly hire mules to carry the gold from China, as well as places like South Korea and Taiwan, into Japan, where the consumption tax increase has made it easy for them to pay off the carriers and bribe staff at Asian airports.”

While Nikkei admits that its story is mostly based on hearsay, data show that a spike in demand for gold on the mainland has coincided with an increase in busts for gold smuggling by Japanese customs officials.

“On the data side, statistics from World Gold Council show that while global demand for gold used in jewelry and as an investment dropped 13.3% on the year in the three months through June, China's demand rose 7.8%.


On the anecdote side, Chinese media outlet Shenyang Daily recently reported that 21 members of a gold smuggling gang had been discovered by customs officials in Shenyang, the largest city in Liaoning Province. Six were arrested on suspicion of trying to smuggle 45kg of gold out of China, while several other members were caught in the early morning of March 21 at Shenyang's Taoxian International Airport carrying 37kg of gold. One member was sent back to Shenyang from Japan after being caught trying to smuggle in 8kg of gold in January.”

Meanwhile, Nikkei reports that Japan is quickly becoming a popular destination for gold smugglers, as the number of cases has ballooned since the increase in Japan's consumption tax in April 2014 to 8% from 5%. While the tax hike has been a burden for consumers, it has proven to be a boon for criminals.

“Japan is fast becoming the go-to place for gold smugglers. According to data from the Finance Ministry, fines or other punishments were handed down for 177 gold smuggling cases in the year through June 2015. To put that into context, 2012 and 2013 each saw less than 10 cases punished. The surge continued the following year, with the number of cases reaching an all-time high of 294 -- and this may be only the tip of the iceberg, as authorities believe there are numerous cases that have yet to come to light.”

The scam is relatively complex: With the cooperation of insider employees at budget airlines like Japan’s Vanilla Air, Japanese gangsters hide caches of gold aboard a given aircraft after it lands in China.

Then they wait for the same plane to be used for a domestic flight, allowing them to carry the gold off the plane without risking being caught by customs officials.   

Once the gold has been safely off-boarded, the smugglers sell it through a seemingly legitimate merchant, pocketing the consumption tax.

“In Japan, consumption tax must be paid on gold when it is brought into the country. This amount is later tacked onto the price of the gold when it is sold, passing the cost of the tax onto the buyer. By circumventing the initial taxation process, smugglers can make a "profit" equal to the amount of that tax. Jacking up the consumption tax rate means bigger gains for smugglers.”

Japanese officials say they’ve been surprised by the level of sophistication exhibited by the smugglers, adding that they appear to be backed by “big organizations” with “big funds.” One recent case involved members of the Inagawa-kai, who were caught smuggling 112 kilos of gold into Japan from Macau using a private jet.

“The method using budget carriers really surprised us," a member of the Customs and Tariff Bureau said. "There was also a case in Saga Prefecture that used a method often used by drug smugglers, delivering gold by sea. Whoever is behind these cases is really putting a lot of thought into the process."


Japanese authorities suspect "big organizations" with "big funds" are carrying out the smuggling operations, hiring different people for different phases of the act. Much of the blame falls on yakuza organized crime groups. A case in 2016 involved members related to the Inagawa-kai group who were prosecuted for smuggling 112kg of gold on their private jet from Macau. Finance Ministry statistics show that in 51% of the 294 cases that year, the perpetrators were Japanese.”

If conditions in mainland China are any indication, incidences of gold smuggling will probably continue to rise. Early this year, the Communist Party tightened its capital controls, making it more difficult for wealthy individuals to move money offshore. Chinese authorities have also forced bitcoin exchanges, long suspected of helping customers move money out of the country, to tighten their financial controls to ensure that their customers don't violate local financial regulations.

If there’s anything to be learned from the Nikkei report, it’s that Chinese investors are becoming increasingly desperate to move their money offshore.

Resorting to smuggling to move money offshore certainly doesn’t signal confidence in the country’s financial system.


Looney Fri, 08/25/2017 - 21:02 Permalink

  I have a numismatic question… Is there a price difference between “Uncirculated”, “Fine”, and “Poor”- graded BitCoins?   ;-) Looney

sinbad2 tmosley Fri, 08/25/2017 - 21:26 Permalink

I can put a gold coin in my pocket and go and buy a car, the guy selling the car would give me the keys on the spot, because he knows that gold is the oldest currency on earth.A bitcoin, what the fuck is a Bitcoin, can I hold it, can weigh it, can I shove it up my arse so Homeland Insecurity can steal it? 

In reply to by tmosley

Lost in translation Fri, 08/25/2017 - 21:10 Permalink


Smuggling OUT of RoK is simply not done. The Au market in RoK is desperate for supply due to a very steep VAT for anyone importing it.

Dealers in Seoul pay a mind-bending premium to get Au in any quantity, because customs is looking for it with a fine-toothed, electronic comb at every point of entry, nationwide. Think police state-scale.

Getting Au INTO RoK is where the money is; it is NOT leaving the country.

harrybrown Lost in translation Sat, 08/26/2017 - 06:21 Permalink

Correct, I work at a major European Port facility & the scanners "will" spot anything in a container that is made of metal,seen them in action, so as someone further up thsi thread said, "they're smugling it in inside containers of rice etc, extremely unlikely from where I work... but it all depends on the "person" operating the scanners tho... there layeth counter party risk!

In reply to by Lost in translation

sinbad2 Fri, 08/25/2017 - 21:18 Permalink

So people are smuggling Gold from South Korea, Taiwan and China, into Japan, but somehow this is Chinese trying to avoid currency controls in China? How about looking at this story in the logical way?Japanese are dumping Yen, for gold.

GoldHermit Fri, 08/25/2017 - 21:41 Permalink

Double post so time for another joke per prior requests...

This hot looking blonde gets on a flight to New York and just sits down in first class. When the rightful person came to sit in the seat there was obviously a controversy. The flight attendant asked to look at the ticket and determined the blonde was supposed to be in coach . The blonde said I am hot looking, I am rich, and I am going to New York so I'm not moving. Neither the flight attendant nor the copilot could get her to move. The captain was approached and said that his wife was a blonde and he could definitely solve the problem . He went back and whispered something in the blonde's ear and she got up grumbling why didn't anyone tell me and went and sat back in the coach section. Obviously the flight attendant and the copilot wanted to know what he told her and he said simply that he explained that first class was not going to New York .

Herdee Fri, 08/25/2017 - 21:59 Permalink

Bartering various goods for gold and silver and avoiding the corrupt federal reserve note system is a fantastic idea and those days are here. Many States are declaring their Constitutional rights and telling their taxpayers that Gold and Silver is legal tender. One economic principle is at stake which is inflation of great magnitude cannot manipulate Gold and Silver downwards. You have to understand that the present economic system has a flaw. That flaw is that federal reserve bank notes that are based on debt (notes are debt, not true money) must be multiplied exponentially and then infinitely in order to pay government obligations and liabilities. If the money supply doesn't keep expanding the system will implode. Because of demographics and the selling out of America's manufacturing base, there's no longer sufficient tax receipts coming into the Treasury. They have to print currency and monetize their debt. You have to know that at the present time, all western governments are insolvent. Politicians will take the easy way out. It's hyperinflation of asset prices until she busts. They have to make present day debts look small again. That's what's coming shortly, a hyperinflationary bubble of the likes we've never seen. Buy land and become self-sufficient at the right moment in the coming years.

Montana Cowboy Fri, 08/25/2017 - 22:26 Permalink

If this covert gold buying is more than a few isolated incidents, maybe there is a lesson to be learned here. Bitcoin is much easier. No risk and no gangs. Yet the big money prefers metals. Just maybe this is a window of hope for stackers. But unless physical demand is enough to deplete physical supply, metals will have great difficulty rising. For those that believe the price-rigging theories, gold will remain riggable unless there are delivery defaults. For those that don't, the shorts will always conclude the absence of delivery defaults proves the price is too high. So far, those shorts have been very correct. No rigging was needed.

berryfarmer Sat, 08/26/2017 - 00:48 Permalink

What happens when these folks discover Monero? The only fungible cryptocurrency. Untraceable, Anonymous. What Bitcoin was supposed to be has finally come.

just the tip Sat, 08/26/2017 - 01:43 Permalink

so.with all of this gold talk, there was no mention of mnuchin in this smuggling operation.  from either the chinese or japanese side.  neither was there any mention of whether oddjob's body was still in THE VAULT.

East Indian Sat, 08/26/2017 - 02:01 Permalink

Order gold plated buddha statues at chinatungsten.com; mix one or two genuine gold items. Pay the tax and import. No need for Yakuza.Or, after importing, you may find that the said company has, ahem, shafted you, and all statues are tungsten ones. Ah, the possibilities are glittering.

Ploutos74 Sat, 08/26/2017 - 04:08 Permalink

You're side stepping the real theme here. The only way you can make money from gold is by buying it low (or without tax) and selling it high to suckers who believe the end is near or the government will take their wealth

JPMorgan Sat, 08/26/2017 - 05:00 Permalink

Gold... globally accepted for thousands of years.It will be the last true real money standing because it always has been.The monetary foundation.  

LickItUp Sat, 08/26/2017 - 05:43 Permalink

Solution: Japan should exempt gold (i.e., money) from its ridiculous consumption tax. It doesn't tax dollars, etc. when they are brought into the country. Wny gold?

83_vf_1100_c LickItUp Sat, 08/26/2017 - 14:50 Permalink

  Because money. Jap.gov spends money like the DNC during a failing election cycle.  How hard can it be to smuggle AU? I am looking at my Vidmar cabinet full of punch press tools. Ship a crate of those with AU collars painted to match. Cheap chinese electric motors with gold wire instead of copper. Industrial metal topped tables, lay a sheet of AU under the stainless top. The amount of crap shipped out of China is staggering, how hard can it be? I would guess they caught a few sloppy smugglers and are showcasing them to scare off the little guys. Tons of gold make it across safely.

In reply to by LickItUp

Infinite QE Sat, 08/26/2017 - 07:48 Permalink

But I thought Bitcoin was supposed to be THE thing for those seeking covert ways to move wealth around? And that the wealthy Chinese were all using Bitcoin for this purpose?Perhaps those with money realize that Bitcoin is by no means private or secret. And that its all an amazing ponzi scheme based on nothing other than the scheming and scamming of a few big players.

DelusionsCrowded Sat, 08/26/2017 - 09:46 Permalink

I find it hard to believe that Chinese criminal gangs (and their political/business connections) aren't building Submarines and exporting stuff down the river systems and meeting up with boats outside of Authorities views .