Six-fold surge in gold seizures in UP points to hawala link: Officials

LUCKNOW Even as customs authorities are trying to dig deep into those who aided the escape of 29 passengers detained at Lucknow’s Chaudhary Charan Singh Airport for allegedly smuggling gold on April 3, a staggering six-fold increase in gold seizures in UP during 2023-2024 compared to the previous year is linked to the yellow metal’s use as hawala settlement, said officials.

Gold has been recovered at airports in Lucknow, Varanasi and other parts of the state by different agencies and the surge in contraband trafficking extends beyond gold, with a notable uptick in smuggling of foreign cigarettes.

According to officials, 140kg of gold was seized across UP in this period accompanied by an increase in trafficking of foreign cigarettes, with approximately ₹15 crore worth of contraband intercepted across the state.

Customs officials attribute the spike in gold seizures to heightened scrutiny on cash transactions, prompting illicit dealers to resort to alternative means of settlement, with gold emerging as a preferred medium for hawala transactions.

“The surge in contraband trafficking poses significant challenges for law enforcement agencies, necessitating a coordinated effort to combat organized crime syndicates and safeguard economic integrity. There is more need of vigilance and collaboration to control the rise of illegal activities and preserve the stability of the financial ecosystem,” an official said.

Regarding the recent surge in cigarette and gold smuggling, there are distinct factors at play. Foreign cigarettes offer substantial profit margins, while gold smuggling yields only a 15-20 % margin. Yet, gold is being smuggled due to its role in hawala settlements, he added.

On April 3, 29 alleged gold smugglers detained for questioning by customs officials escaped from Lucknow airport. Subsequently, eight customs officials were suspended.

These smugglers are still not traceable. According to customs officials, 28 out of these 29 smugglers are from Rampur Tanda village and one is from Uttarakhand.

An official said, “These individuals lack the capacity for such large-scale smuggling, suggesting the involvement of higher-level operators. Given their backgrounds, these people would not have planned such a big smuggling of cigarettes or gold into the country...someone else is running the show and we are soon going to find those people.”

“Six people have already been arrested in this case and the rest will be nabbed soon. But the news of arrests from other places is false. These six people are those whom we arrested on day one,” said the official.

Insiders said the department of customs is not only keeping an eye on absconding smugglers but also on the dealers who purchase goods from these smugglers.

The department of customs lodged an FIR against the smugglers for running away from the investigations. While authorities are confident about the cigarette smuggling, they’re unsure about the gold smuggling method involving insertion of gold paste into their rectums.