According to figures produced by government regulators, gold imports to the Kurdistan Region reached new heights in 2013 when 114 tons of the precious metal was brought in from the United Arab Emirates (UAE) and Turkey.
Gold imports fell dramatically in subsequent years – to 77 tons in 2014, 56 tons in 2015, 44 tons in 2016, and 25 tons in 2017.
Imports have returned to growth in the past four months.
“Because of the falling prices of gold, a fall of 30,000 dinars in a mithqal of gold, and the export of gold to Mosul, the gold market has boomed in the Kurdistan Region compared to last year,” Shwan Mohammed, deputy head of Erbil goldsmiths’ syndicate, told Rudaw.
ISIS held Mosul for three years, from summer 2014 until its liberation in June 2017. This allowed the Kurdistan Region’s gold traders to return to this large market.
Wracked by a currency crisis, Tehran currently doesn’t allow traders to import gold into Iran. That is why traders use the Kurdistan Region as a transit place to import gold from Turkey and the UAE.
“Iranian traders purchase gold in Turkey and the UAE, transport it to the Kurdistan Region, and then take it to Iran by their own special means. And this benefits cargo companies and the government too, as they charge 25,000 dinars for transporting a kilo of gold and the government charges 275,000 dinars for importing a ton of gold as tax, customs and inspection fees,” Mohammed said.
Last year, traders in the Kurdistan Region imported gold via Najaf and Baghdad airports because of the international flight ban on Erbil and Sulaimani airports. As the road route from Iraq to the Region is fraught with obstacles, gold imports to the Kurdistan Region declined.
“We don’t have precise figures on the gold imported last year because the customs offices no longer give us these figures. However, according to estimates, nearly 20 to 25 tons were imported last year. But this year, after the blockade on Kurdistan airports was lifted, gold imports have increased by 45 percent compared to last year,” Mohammed said.
In the Kurdistan Region, there are around 40 companies that buy broken gold, which they turn into pure gold bars for export to the UAE and Turkey.
“Due to increasing demand on gold, imports of gold have increased compared to last year. For example, since the ban on Erbil airport was lifted, we have imported one ton of gold. Other companies have imported a fair amount of gold too. I think the amount of gold imported in the first four months of this year is as much as the amount imported during last years as a whole,” Rawand Sabah, the owner of a gold company in Erbil, told Rudaw.
Iranians buy gold
Fearing the toman price will fall further against the dollar, the people of Iran are converting their cash into foreign currencies and gold – boosting demand.
Some Kurdish traders buy broken gold in the Kurdistan Region and sell it to Iranian merchants, and then buy gold bars in Dubai and sell it to goldsmiths in the Kurdistan Region.
“This business has developed in the Kurdistan Region, which is why broken gold is rarely exported to Dubai. Gold transportation companies are therefore not in high demand. In the past, we were exporting 50 kilos to Dubai, but 10 nowadays,” Sabah said.
Traders import nearly 70 percent of their gold from Dubai to the Kurdistan Region on loan because of the trust and coordination that exists between Kurdish and Dubai traders.
“I get 80 percent of the gold I import from Dubai by loan, and I often sell all the gold to goldsmiths by short-term loans too. Currently, I have nearly 200 kilos of gold in loans. They pay me back an amount weekly after they sell the gold. And I send broken gold or cash to gold companies in Dubai,” Kamaran Mohammed, a goldsmith in Erbil, said.
Changes in taxation and customs fees on imported and exported gold were made this year in an attempt to increase local revenues.
In the past, 190,000 dinars were charged for importing a kilo of gold as tax and customs fees and 25,000 dinars as quality control inspection fees.
Nowadays, 250,000 dinars are charged in tax and customs fees, while inspection fees remain the same.
“These charges will finally add to the price of prepared gold and in the end it is the buyers who will have to pay more cash when they purchase the gold,” he added.
