Mandatory six-digit HUID number will not only help consumers authenticate the hallmarked gold jewellery but will also curb gold smuggling
Manish Pachouly
MUMBAI: Money laundering and terrorism are two major concerns for any government. Their interlinkage cannot be ruled out, making it a dangerous alliance.
What adds to this concern is the smuggling of narcotics, diamonds, and gold which at times aids terror activities.
While law enforcement agencies remain vigilant all the time to thwart these smuggling efforts, the success rate is not high with the seizures being only a small percentage of the actual smuggling.
A latest rule by the government will not only help in preventing the sale of spurious jewellery but is also likely to put some curb on smuggled gold flooding the market.
On average, the per annum import of gold in India is 800 to 850 tonnes. Apart from the official import, about 400 tonnes of gold enters the country by the smuggling route. This smuggled gold finds an entry into the market through conversion into jewellery with fake hallmarking done.
So far, the Bureau of Indian Standards (BIS) had made the hallmarking compulsory by four marks that guaranteed the purity of the gold. However, it was not easy to trace the origin of the yellow metal besides not so easy to find out the consumer.
From April 1 this year, the government has prohibited the sale of gold jewellery and artifacts without the six-digit alphanumeric Hallmark Unique Identification Number (HUID). Presently, this is for the newly manufactured jewellery and artifacts. Though the six-digit HUID was introduced in July 2021, it was made mandatory only now.
The unique six-digit HUID number is traceable and will help the consumer authenticate the hallmarked gold jewellery items using ‘verify HUID’ in the BIS CARE app. It provides information about the jeweller who got the article hallmarked, their registration number, purity of the article, type of article, and details of the hallmarking center which tested and hallmarked the same.
According to market experts, while this will prevent the fleecing of customers by unscrupulous elements who had so far sold spurious jewellery with the help of fake hallmark certificates, the move will also help in identifying the origin of the gold. This will make the entry of smuggled gold into the market difficult.
Experts say that a part of the transaction involving smuggled gold is linked to money laundering and terrorism. A 2021-22 ‘Smuggling in India’ report by the Directorate of Revenue Intelligence (DRI) said that gold has proved to be an attractive vehicle for money laundering for criminals due to the reasons that it remains stable in value, is easily transformable and interchangeable for other assets.
“From mining to retailing, lucrative proceed-generating opportunities are presented by this precious metal, especially for those who are inclined to engage in illegal activities,” the report under the title ‘Gold Smuggling – Links to Money Laundering & Vulnerability to Terror Financing’ said. It added that gold continues to offer opportunities for arbitrage due to differential prices internationally.
The report further points out that gold also remain vulnerable to being used in trade-based money laundering operations as it permits high values to be moved across borders in a relatively convenient way with a product that can be transformed to be concealed easily. “This quality of gold to move value quickly and easily renders it also susceptible to be used in funding terrorism,” the report said while touching on the link between gold smuggling and terrorism.
Kumar Jain, national spokesperson of the India Bullion and Jewellers Association (IBJA) said, “The government wants to bring transparency to find out from where the gold is coming and where it is going.” He added, “Earlier the four-digit hallmarking was only for purity. But now with the six-digit HUID, the government will keep a tab on the entire process from manufacturing to the consumer.”
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