Bethlehem – Press investigation – The operations of bringing tons of gold annually into the West Bank hide many secrets, especially since they depend on one method: smuggling. This smuggling has become paths that make it almost legal, in the eyes of the Palestinian Authority. Smugglers control gold prices; It is often sold at higher prices than the global market.

This state of suspicion was the impetus for investigating the methods of smuggling the yellow metal, and granting it ‘legitimacy’ by the Palestinian Ministry of Economy before putting it on the market. No person can practice smuggling, unless he is under the guise of ‘influential people,’ ‘diplomats,’ ‘dignitaries,’ or merchants, according to what the investigation concluded based on the testimonies of merchants, current and former officials, minutes of Jordanian court sessions, and statements. Journalist.

The Precious Metals Directorate of the Palestinian Ministry of Economy acknowledged that gold was entering the West Bank in an ‘unofficial’ mann
er, according to Haitham Samaaneh, Director of Control and Inspection at the Directorate. He attributed the reason to “the dispute with Israel regarding the view of gold as a commodity and cash, and the lack of a (Palestinian) central bank through which gold can be imported.”

The former director of the Precious Metals Directorate, Yacoub Shaheen, did not hesitate to confirm that the Palestinian Authority stamped more than 180 tons of gold (since 1998) and not a single gram of it was officially entered. According to the Authority, gold bullion is considered cash, not a commodity, and is exempt from tax. Value added, according to a Cabinet decision in 1999. In contrast, Israel treats bullion as a commodity (under the Paris Economic Agreement), and imposes a 17 percent tax on it, according to Shaheen.

Regarding the reason for this situation, Shaheen – who worked in the directorate from 1998 until he reached retirement in 2020 – says that if the gold enters through official means, the Israeli occupation will im
pose a tax on it and return it to the (Palestinian) authority through the monthly clearing system. However, the Ministry of Finance’s failure to transfer tax ‘refunds’ to merchants made them resort to smuggling.

How is smuggling done?

Smuggling takes place through two points: King Hussein Bridge (Jordanian border), and Ben Gurion Airport, which is run by Israel, according to what was confirmed by workers in the gold sector, including Tariq Abdullah (a pseudonym).

Abdullah explains, ‘Gold enters through the airport with the support of Israeli parties, or through the King Hussein Bridge, through Palestinians and Jordanians, by people who organize everything in advance, including recruiting employees on the Israeli side of the border to facilitate the entry of the gold.’

Regarding smuggling through Ben Gurion Airport, the Israeli police announced, in early 2023, the thwarting of an attempt to smuggle 8.5 kilograms of gold, valued at more than 1.5 million shekels (about 430 thousand US dollars), and the arres
t of two young suspects from the Galilee region. On charges of smuggling during their return from Turkey to Israel.

In another incident in April 2022, the police and the tax authority in Israel announced that they had thwarted an attempt to smuggle 20 kilograms of gold, through Ben Gurion Airport (located in the city of Lod occupied in 1948), worth millions of shekels. The police then arrested three people from Jerusalem, on suspicion of trying to smuggle gold from Trkiye.

On the other hand, the investigation documents four cases of gold smuggling on the Palestinian-Jordanian border, during which Jordanian security seized quantities of gold between 2019 and 2022.

One of these cases dates back to 2016, when its details appeared in the text of a ruling issued by the Amman Court of Appeal, and it relates to the smuggling of 22 gold bars (one kilo for each bar), and 20 ounces, from Jordan to the West Bank via the King Hussein Bridge, via a truck transporting cement. .

The threads of the smuggling incident wer
e revealed when a dispute occurred between the owner of the amount of gold – who works in the field of exporting cement from Jordan to the West Bank – and the smuggler, who works as a truck driver across the border.

The case was decided by the Jordanian judiciary, after the Public Prosecution decided to refer the defendants (M.A.) and three others to the West Amman Criminal Court of First Instance, to be tried for the crime of ‘bad trust.’

The prosecution concluded that ‘the complainant (M.M.) works in the field of exporting cement, through trucks belonging to the defendant (B.A.) in exchange for a monthly wage. The complainant asked – from time to time – from the defendants to transport gold bullion to the West Bank for him.’ Western, through a shipment of cement for an additional fee.

The complainant requested that the amount of gold be transferred, by placing it in the middle of the shipment, in preparation for bringing it into the West Bank. However, after receiving the gold, the defendants sent only t
he cement shipment, kept the gold, then sold it for their personal account, and bought real estate and vehicles with its money, according to the Public Prosecution.

The court estimated the value of the smuggled gold in this case (based on prices in 2016) at 667 thousand Jordanian dinars (940 thousand US dollars). It is clear, through analysis of the statements of the parties to the case, that this smuggling operation was not the first.

Traders control the gold market

Going to the gold markets in the cities of the West Bank, the investigator met a group of merchants and workers. However, most of them refused to record the interviews when they were asked about the names of the merchants responsible for supplying the West Bank market with gold, amid a state of fear and hesitation that some of them showed.

Only three workers (out of approximately 20 workers and merchants) agreed to register, on the condition that their identities be hidden; “To avoid risks.” They mentioned to us a list – which includes five m
erchants – who manage the process of supplying gold to the market. We contacted three of these traders; Two of them evaded a response due to frequent travel, while the third described the question – whether he works in smuggled gold – as ‘personal,’ and added: ‘How can you ask me a personal question like this… I buy gold from local merchants and recycle it like the rest of the merchants… How did he get in? We don’t.’ “We know.”

We transferred the question to the head of the Palestinian Union of Precious Metals, Muhammad Ghazi Al-Harbawi, who refrained from mentioning any names, and refused to describe the operation as ‘smuggling,’ saying: ‘Whoever brings gold must be honored, because he brings treasure to Palestine… and we need to We have gold reserves.

An informal agreement on smuggling!

Since 1999, the process of bringing gold into the Palestinian territories has been managed through an undeclared agreement between the authority and the merchants, which Al-Harbawi described as a ‘gentleman,’ accord
ing to which the factory owner or jeweler brings the gold in his own way, and after manufacturing it, he is required to obtain the Palestinian stamp in the directorates. Precious metals (belonging to the Ministry of Economy), and thus it becomes white gold (legally) and is displayed in the markets.

The voice of the head of the Palestinian Federation for Precious Metals, Muhammad Ghazi Al-Harbawi.

The agreement means – in Al-Harbawi’s view – that the government cannot declare that gold is illegal, but it turns a blind eye because it is unable to secure gold, according to what is practiced in all countries of the world, according to Al-Harbawi.

But Al-Harbawi describes the smuggling process as difficult and complicated. Only those who have sufficient tools bear its consequences: ‘Any person who has relationships with privileged people (those who enter through the Karama crossing – the Palestinian-Jordanian border) without inspection can be offered to bring in gold, and often no one says no…that’s the case.
‘ .

Al-Harbawi’s statement is confirmed by Yacoub Shaheen, the former official of the Precious Metals Directorate in the West Bank: ‘Diplomatic missions through religious Jews and holders of VIP cards are the intermediary that smuggles gold into Palestine. Gold is small in size and can be carried easily, for this reason its entry cannot be controlled.’ “.

The transport mediator… diplomats and influential people

In an attempt to track the progress of a shipment of gold on its way from Jordan to Palestine, the investigation documented a second smuggling incident, which was followed up by the Jordanian Customs Court (Case No. 379/2019). In the details of the case file, it was revealed that the employee at the Jordanian embassy in Israel (A.A.) carried with him on March 5, 2016, a shipment weighing 20 kilograms of gold, including 19 ingots and a kilo of worked gold, in addition to 310 cellular devices, and hid them in a box. Under his vehicle, which easily crossed the King Hussein Bridge, reaching the Israel
i checkpoint, which in turn decided to search this vehicle, and found the smuggled gold.

The Israeli side informed the Jordanian embassy, ??which sent a representative to follow up on the incident, according to the details of the decision of the Jordanian Customs Court in 2019. The court then convicted the embassy employee of the crime of customs evasion, contrary to the provisions of the customs law in the Kingdom, noting that the decision is subject to appeal.

The case of the Jordanian embassy employee was not the only one. It was preceded by the incident of the seizure of 152 kilograms of gold in the French consulate’s car, as it was passing through the Israeli point on the border with Jordan in 2013. The driver of the car confessed to smuggling gold, tobacco, and cash checks.

In April 2023, Israel detained Jordanian MP Imad Al-Adwan (35 years old) for two weeks, on charges of smuggling quantities of gold and weapons from Jordan to the West Bank. Al-Adwan is being tried before the Jordanian State Securi
ty Court, after his immunity was lifted on charges of attempted smuggling.

A gold merchant from Ramallah, ‘We gave him the pseudonym Samer Faisal,’ says that gold smuggling is done mainly through diplomats who are not inspected at the Jordanian and Israeli crossing points, and they enjoy VIP service across the Israeli and Palestinian sides, whether across the bridge (the Jordanian border) or Airport (Ben Gurion).’

Faisal pointed out that any car that is not searched across the border could be a smuggling channel, ‘because they charge an amount of five thousand US dollars for every kilo of gold they bring in, and if what is smuggled is caught, they will be held responsible.’ The vehicle driver must agree in advance.

From Jordan, Abdel Nabulsi, owner of a jewelry store in central Amman (a member of the administrative body of the General Union of Jewelry Trade and Craft Shop Owners), pointed out that smugglers often belong to the category of diplomats. He added: “It is not a requirement that all of them work
in this work (smuggling), but some of them work in this field, and this harms the state to which this official belongs.”

The voice of Abdul Nabulsi, owner of the Nabulsi jewelry store, Gold Souq, downtown Amman

An organized process and recruitment of elements

The gold smuggling process is organized and systematic. It begins with gold exporters from neighboring countries – who regulate the flow of gold and its passage through border crossings – to Palestinian traders who control this market, according to what reliable sources indicated.

The documents, which we obtained from the ‘Qastas’ website, show that the names of people from Jordan who were accused of smuggling gold from Jordan to Palestine were repeated.

The investigation documented the repetition of the name (MA) in two separate smuggling operations during two different years. In 2021, he witnessed his partner’s ownership of the smuggled gold that was seized on the Jordanian border (two 24-carat bars, each weighing a thousand grams). In the second
case in 2022, M.A. had asked another person to transfer about 67 kilograms of gold (distributed between bullion, lira, and broken gold), in exchange for a sum of money, according to the court minutes.

Power contradicts itself

The irony lies in the fact that the Palestinian Authority ‘legitimizes’ smuggled gold, and in return from time to time announces measures to combat smuggling. The Palestinian Ministry of Economy stamps tons of gold annually, through the Precious Metals Directorate, in exchange for a tax of ‘one shekel’ for each gram. In 2022, for example, revenues amounted to 17.6 million shekels (about 4.8 million US dollars), from stamping about 18 tons of gold.

Adel Azzouni, Director of the General Administration of the Ministry of Economy, says that his ministry is forced to stamp gold, which enters through unofficial means. Due to the Palestinian Authority’s lack of control over the crossings, and the absence of a regulating body to bring in raw gold, remanufacture it, and shape it.

Azzouni adde
d that the role of the Precious Metals Directorate revolves around stamping, inspection and monitoring, in accordance with Law No. 5 of 1998… The law did not address how to bring gold, nor to the party that determines its price.

Voice of Adel Azzouni – Director of the Precious Metals Directorate

However, the Palestinian government showed a contradiction with what the General Administration of Precious Metals is doing. At its meeting (No. 131 dated November 8, 2021), it issued a decision to what it described as ‘fighting gold smuggling across bridges,’ because it harms the national economy, according to the government’s decision.

The investigative reporter also reviewed the decision of the Council of Ministers, in its session held in Ramallah on April 10, 2023, which stipulates ‘strengthening the government’s efforts to combat smuggling issues, including gold smuggling and the resulting losses to our national economy.’

The decision – which was not published on the Palestinian Council of Ministers website
– stipulated, ‘Assigning the Ministries of Finance and National Economy, and the Monetary Authority, to develop a vision to combat this phenomenon, provided that the proposal is submitted, which may include the establishment of a government import company, within a period not exceeding a month.’

As of the date of publication of the investigation, no government decision has been issued regarding the establishment of the government company for importing gold.

The “officer” does not know about gold smuggling

While the government issues decisions to combat gold smuggling, the customs police agency – the body responsible for enforcing the law regarding the crime of smuggling – appears to be absent from the scene.

The Director of the Public Relations and Media Department of the Customs Police, Ibrahim Ayyash, was surprised by the information, saying: ‘All the gold in the country is smuggled! How? This is the first time I hear about it!’

What I know – Ayyash says – is that ‘gold merchants are the ones who impor
t or sell it, and gold is manufactured in licensed factories (…) I have not encountered any information about gold being smuggled into our country.’

Ayyash added that it is not proven by the customs police that all the gold entering the country is smuggled. There are stores authorized to bring it in, and the names are with the Ministry of Economy, according to his statement.

However, the General Administration of Precious Metals said that what it has is a list of the names of merchants and jewelers working in the gold market only, and it provided us with the numbers of merchants and gold workshops and their geographical distribution in the cities of the West Bank.

Who is responsible for bringing the gold?

According to the ‘Paris Protocol,’ signed between the Authority and Israel in 1994, which regulates the Palestinian-Israeli economic relationship, ‘the foreign currency reserves of the Palestinian Authority (including gold) and the Palestinian public sector bodies are deposited with the Monetary Author
ity and managed by it.’

However, the Monetary Authority did not play this role, according to its response to the investigation’s inquiries: ‘None of the governmental institutions and bodies in the State of Palestine has ever held any asset in the form of gold, as all the gold present in the Palestinian regions does not belong to the state/government or Any of its institutions, rather, it is owned by the private sector (individuals, families, gold and jewelry workshops, factories, and shops).’

The Monetary Authority continued by saying: ‘The official Palestinian side has never taken the initiative to import gold from abroad, whether for possession and investment purposes or even for commercial purposes, especially since there is no official approved mechanism to regulate the process of importing gold from abroad, whether in the form of bullion or gold jewelry.’ .

The Monetary Authority’s response did not contain any details regarding the decision of the Council of Ministers, in the session of April 10, 2023
, although the decision clearly indicated its role in the issue of submitting a proposal to stop the smuggling phenomenon.

Where is the Ministry of Finance?

The head of the Palestinian Federation of Precious Metals, Muhammad Ghazi Al-Harbawi, holds the Ministry of Finance partly responsible for the gold smuggling file. Due to the inefficiency of the tax refund system for merchants, which takes years to obtain (refunds), according to Al-Herbawi.

In turn, the Ministry of Finance refused to comment on the issue on the grounds that it was ‘the practical specialty of the Ministry of Economy.’

At the same time, Yaqoub Shaheen explained that the General Administration of Precious Metals formed technical and ministerial committees; To solve the problem of smuggled gold for 20 years, any official body, bank or company must undertake the process of importing gold, and the Ministry of Finance must refund the tax revenues, but no decision has been taken in this regard, according to him.

On the other hand, Ahmed Al-Q
awasmi, Chairman of the Businessmen Forum and a member of the Board of Directors of the Precious Metals Union (he has a gold workshop), says that the Union has demanded dozens of times the necessity of bringing gold in a legal manner, and finding a mechanism to return the value-added tax that is paid, or to be exempted. gold from tax; Especially since the illegal introduction of gold deprives this sector of exporting it as well.

The solution to ‘this problem,’ according to Al-Qawasmi, is not difficult, and may be achieved through an agreement similar to the one on imported cars, whose customs are paid directly to the authority’s treasury, away from the clearing house (taxes on imported goods collected by Israel on behalf of the Palestinian Authority, in exchange for a three percent commission under the Paris Economic Protocol). ). Al-Qawasmi added: “The matter is not difficult if the authority wants to find a solution to it.”

The Palestinian citizen pays the price

Samer Faisal (a pseudonym), a gold merchan
t, says that the Palestinian gold market has become under the control of a few merchants: ‘They bring gold and impose prices on the merchants, which makes the price of gold in Palestine different and unreal.’

Yaqoub Shaheen, former director of the Precious Metals Directorate, completely agrees with this matter, saying: ‘Gold smuggling and its legalization has placed the local market under the control of smugglers, in terms of supply, demand and price. They control prices and impose them on everyone, and this price is high by about 40 to 200 dollars.’ At least, about the global price of an ounce, and the Palestinian consumer is the one who bears this difference, and pays it without any accountability or supervision.’

This price difference was documented by the investigative reporter over a period of four days in the months of April and May 2023. It was found that the price difference ranged between $100 and $220 in the price of a Swiss ounce (sample), compared to the world price.

“How gold is entered determ
ines its price. There may be a high cost to enter it, and sometimes it is at a lower cost; this is the indicator of the price of gold.”

Muhammad Ghazi Al-Harbawi, President of the Palestinian Federation of Precious Metals

“Smuggling line right”

The difference in price is called in the world of smugglers the ‘right of line’; This is explained by Tariq Abdullah (a pseudonym), a worker in the sector, when he says: ‘When the goods arrive, we do not buy them as they are at the international price; rather, another amount is added to them, called the line right (the gold arrival line), which feeds the Jordanians, Palestinians and Israelis.’ A third share, while merchants get two-thirds, and in any case, this cost is borne by the consumer.’

*This investigation was completed with support from ARIJ. Prepared by Ansar Atmezi*

Source: Maan News Agency