Smugglers thwarted attempting to smuggle gold in underwear and sprinkled on wigs

Smugglers have gotten creative with their methods to smuggle gold. Customs officials are trying to crack down amid rising prices and growing demand for the precious metal from Japanese investors

Smugglers have been caught by customs officers in Japan upon trying to smuggle gold through wigs and underwear.

Customs authorities are ramping up measures to tighten border controls as smuggling methods become more sophisticated, such as hiding powdered gold in clothing, they said.

Often gold smuggling takes the form of jewellery hidden in luggage and beneath clothes.

However, as customs officers get stricter with their methods of interception, gold smugglers have resorted to more creative methods.

Customs officers in Japan have intercepted consignments of gold sent by post, powdered, and mixed with tea leaves.

Last September, two Chinese nationals arriving from Hong Kong were found hiding a total of some 2.6 kilograms of powdered gold in wigs at Tokyo’s Haneda airport.

Other creative methods that smugglers have resorted to is by incorporating solid gold mechanisms in air compressors

The gold secreted in the air compressors last April (2024) was Hong Kong’s biggest haul of smuggled gold by value and weight since records began in 2000.

The rotors, gears and screw shafts of the machinery had been removed and replaced by parts accurately moulded out of gold and painted to look like conventional metals.

“We took out the rotor and found traces of glue on both ends,” said Assistant Superintendent Ho Tin-hong. “We tapped the rotor lightly with a hammer and noticed unevenness, suggesting the metal was somewhat fragile. Scraping off the paint revealed a gold-coloured surface.”

The contraband has not only been found in wigs, but in the underwear of smugglers too.

The smuggling rackets are driven by the fact that importers of gold must pay a 10% tax on bullion which they bring into Japan.

Territories such as Hong Kong do not levy such a tax, which means that by buying overseas and selling in Japan without paying tax, smugglers immediately make a 10% profit.

Interest rates are low in Japan, and many ordinary savers are looking for alternative ways to invest their money outside of the bank and lucrative ways of investing cheap credit.

The number of gold smuggling cases investigated by customs authorities nationwide started increasing in 2014, when the consumption tax rate was raised to 8% from 5 per cent, hitting 1,347 in 2017. The consumption tax was raised to 10% in 2019.

The figure decreased in 2018 and remained low due to stricter penalties and border controls as well as entry restrictions imposed to curb the coronavirus pandemic.

International uncertainty caused by Russia ’s invasion of Ukraine and the election of Donald Trump has increased gold’s appeal as a reliable and stable investment.

At £75,600 a kilogram, gold is at its highest ever value, double its price a decade ago.

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