VietNamNet Bridge - While exports of gold jewelry to the US, Belgium, France and Australia remain stable, exports to Switzerland have unexpectedly soared by 2,300 percent this year.

A report from the General Department of Customs (GDC) showed that the export turnover of jewelry gold and gold products to Switzerland in the first nine months of the year reached $324.7 million, a sharp increase of 2,381 percent compared with the same period last year ($13 million in the first nine months of 2015).

Nguyen The Hung from the Vietnam Gold Business Association noted that since the government’s decree No 24 was released, the domestic gold price had never been lower than the world price until 2016. 

In the months from March to July, the domestic price was VND300,000-500,000 per tael lower than the world price. On days just after Brexit was announced, the price gap widened to VND1 million.

Therefore, it is understandable why businesses sped up exports to make profit. This also explains why businesses have not exported gold.

Hung thinks that Switzerland might be importing more jewelry from Vietnam to refine gold and make 99.99 percent bullion gold for re-export to the international market. 

While exports of gold jewelry to the US, Belgium, France and Australia remain stable, exports to Switzerland have unexpectedly soared by 2,300 percent this year.

“This happens in other countries as well. When the domestic prices go lower than the world prices, India, Thailand and China also export jewelry gold to Switzerland,” he said, adding that Switzerland is the world’s center in gold refinery, with 60 percent of the world market.

One analyst said that Vietnamese businesses exported jewelry to Switzerland in order to avoid tax. Under current regulations, a high tax is imposed on the exports of gold bullion.

Five years ago, businesses tried to avoid tax by exporting jewelry with high content of gold (95 percent) to dodge regulations.

In order to prevent trade fraud, the Ministry of Finance released Circular 157 requesting businesses to have gold purity examined before shipping.

In May 2015, the ministry decided to raise the export tariff from zero to 2 percent on gold jewelry with gold purity content of over 95 percent in an effort to restrict export of gold materials.

The analyst thinks that it is necessary for agencies to find out if the massive gold exports to Switzerland are ‘abnormal’, as jewelry has to have 75 percent of gold purity at maximum.

Under current laws, gold jewelry with less than 95 percent of gold content exports are taxed zero percent, while exports with more than 95 percent of gold content are taxed 2 percent. 

Luong Bang