Movement of Gold in Lebanon Significant: Hoarding or Money Laundering?

Lebanese people are not new to buying unpolished gold. Buying activity by the Lebanese has steadily increased over the past years. The year 2023 seemed particularly symbolic to foreigners, coinciding with the bankruptcy crisis that hit some banks in the United States and fears of a collapse spreading to Europe and the Gulf states. The demand to buy gold is not only for foreigners but also for residents, who are leaving the banking sector and looking for safe havens for savings and investment.
Gold import numbers have translated into high demand for buying gold in various quantities, and the volume of imports is expected to approach two billion dollars by 2023. However, the issue of demand for buying gold for savings or investment purpose does not elicit confidence. Many economists and researchers. They fear that gold trading activities involve money laundering and suspicious activities, while others believe that the high demand for gold is a search for a safe haven.

Storage shelter

According to Lebanese customs statistics, imports of pearls, precious and semi-precious stones and precious metals in 2023 increased by 104 percent from the previous year, including more than 35 tons of pure gold. Speaking to Naeem Risk Al-Modan, chairman of the Gold and Jewelers Syndicate, he expects gold imports to increase several times over exports by 2023. This is due to people’s fear of saving money in banks or banks. House. Some of them are buying pure gold to make a profit, and as gold has been rising for months, central banks have rushed to stockpile it.

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Between 2021, 2022 and 2023, tens of thousands of tonnes of gold have been imported. As for what citizens buy, they tend to focus on ounces and larger bullion, valued in kilos, Rizk says.

On the other hand, there is a growing demand to buy gold bars and ounces from the company “Al-Qard Al-Hasan”, paying their price in installments over months or years. According to a senior source in al-Khart al-Hasan, the Lebanese are willing to mortgage liras and ounces of gold. This means they buy this type of gold as a safe haven and not just for decoration. Taking Al-Qard Al-Hasan gold sales activity as an indicator of gold demand, it is the only company that offers installment services in terms of ounces of gold, liras and bullion. With limited income. It has been noticed that the demand has been increasing significantly in the last few years.

Dirty money laundering

The theory that gold is needed as a safe haven is not considered correct by many economists, especially when the volume of imports is compared to exports. The amount of gold entering Lebanon in 2023 was between 35 tons and 37 tons. In the past few years, especially in 2019, the amount of gold exported abroad from Lebanon has been approx.

Therefore, economic analyst Abbas Al-Tufaili has combined the import and export figures of gold since 2019 and translated it as suspected money laundering. In an interview with Al-Modon, he said that the movement of gold in Lebanon should be linked to the numbers for 2019. We note that in 2019, there was a lot of reluctance to send money abroad. A closer look shows that since June 2019 and 2020, large amounts of gold have started to leave Lebanon.

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Approximately 35 to 37 tons of gold left Lebanon. The gold merchants’ excuses to explain these numbers are always that Syrians spend their money this way. Al-Tufaili asks: Why are Syrians not producing gold in 2018, 2017 or before?

Al-Tufaili believes the import figures are exaggerated. Last year, the amount of gold entering Lebanon was more than double what it will enter in 2022, and gold prices have been rising since 2022. “So why the increase in size in 2023?” The economic researcher links the movement of gold imports to the deterioration of money in the market, saying, “Exaggerated money is also a result of dubious methods and this cannot be denied. “

Al-Tufaili describes money laundering through the gold sector as a very serious matter, “because gold is one of the sectors that continues despite all the crises and wars, so there are risks for this sector” $800 million to $1 billion in balance comes from gold entering Lebanon.

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