Date: 6 January 2025
## Turkish Jewellery Industry Warns of Rising Gold Smuggling Due to Import Quota
Representatives of the Turkish jewellery industry have drawn attention to the increase in gold smuggling caused by the import quota. They claim that the amount of gold entering the country illegally is three times higher than official imports, stating: “People simply wear a necklace around their neck and enter the country.”
Recep ERÇİN
The Turkish jewellery industry gathered at the **“Turkish Jewellery”** event held in Antalya. The main issue on the agenda of Ayhan Güner, Vice Chairman of the Board of the Jewellery Exporters’ Association, and other members of the Association’s Board of Directors was the increase in gold smuggling by those seeking to profit from higher domestic gold prices resulting from the gold import quota.
According to exporters, if eight tonnes of gold are officially imported each month, at least three times that amount enters the country illegally.
“They put a necklace around their neck, come from Bulgaria and sell it here,” exporters said, adding that they had lost customers because of the gold quota.
## “Producers Are Going Bankrupt While Intermediaries Profit”
Ayhan Güner, Vice Chairman of the Jewellery Exporters’ Association, stated that half of the workshops in Kuyumcukent had closed:
“There are between 1,500 and 2,000 workshops. Small businesses cannot access gold.
Intermediary institutions earn an additional USD 30 million per month because of the difference in gold prices. If this situation does not change, it means that half of Kuyumcukent has gone bankrupt. Large-scale businesses may survive, but small businesses cannot.
The gold price difference is not significant in the domestic market because the buyer does not feel it. Recently, a major company travelled to Mexico. Why? It went there to apologise because it was unable to fulfil a 68-kilogram export order due to the price difference.
It charges USD 6,000 for the workmanship of one kilogram, but there is a USD 4,000 price difference. Is it supposed to sell it for USD 10,000?
We had overtaken the Italians. We have now imported USD 5 billion worth of goods from Italy. Before the quota, this figure was USD 350 million.”
## Gulf Customers Have Left
Ayhan Güner stated that Arab wholesalers had previously visited the shopping centre section of Kuyumcukent and placed orders, which had multiplied production in the area. However, he said Gulf customers had withdrawn because of the quota.
“They became unable to operate because of the gold price difference. Customers from these countries left. Workshops closed. They had come from Dubai, and now they have returned.
Eight to ten years ago, we established the system specifically to attract them. They are now going to Uzbekistan, Dubai and Egypt.
In a few years, we will feel the consequences of the goal we have conceded. The real loss is our know-how. Once a customer leaves a jeweller, they do not return for at least four years. Employment has fallen by at least 40%,” Güner said.
Güner stated that his own exports had almost fallen to zero. Another member of the Association’s Board of Directors said:
“If there is a problem, the authorities should inspect us. I employ 150 people, and every one of them is officially registered. There has been a serious loss of employment.”
## “There Is Nothing Like This Anywhere Else in the World”
Members of the Board of Directors of the Jewellery Exporters’ Association stated that the jewellery industry had effectively been placed under a closed foreign exchange regime.
They explained:
“We also informed the Financial Crimes Investigation Board, known as MASAK. When a customer comes from abroad, we are told that the customer must go to the consulate and obtain documentation proving that they represent a company.
MASAK says that if a customer comes and does not provide their identity card, we must report them. This applies to purchases of TRY 180,000 and above, but that is merely the price of two bracelets. The threshold used to be TRY 75,000 and was later increased to TRY 180,000. Transactions above TRY 180,000 must now be reported.
They ask for an identity card and an address. If we were to report all of this information to MASAK, the system would become completely blocked.
There is nothing like this anywhere else in the world. An invoice is already issued. They also request the company’s shareholding structure.
We sometimes have to wait six months just to obtain an appointment with a foreign company we trade with. How are we supposed to ask them for documentation showing their shareholding structure?
This system has benefited those selling into the domestic market. In eight months, three to five companies made extraordinary amounts of money. They can generate in a single hour the turnover that exporters achieve over a much longer period.”
## “Textile Companies Can Bring in Gold, but Jewellers Cannot”
Ayhan Güner, Vice Chairman of the Jewellery Exporters’ Association, said:
“We are no longer asking for anything new. We simply want to return to the original system.
We were once the world leader in production, and we had established a very successful system. Now 40% of that system is moving abroad.
To date, we have submitted 100 requests, and only one of them has been accepted.
Textile companies can bring gold into the country in return for export proceeds, but jewellers cannot.
Uzbekistan has stopped importing from us. Several Turkish companies have also relocated there.
While every country is trying to attract production through incentives, we are effectively saying that we do not need this industry.”
Güner also stated that participation by South American buyers in the Antalya fair had fallen because of the price difference in gold caused by the quota.
“There are more than 500 participating companies here and nearly 1,000 visitors. Most participants come from Russia, the Turkic republics, the Middle East, Eastern Europe and South America,” he said.
During the discussion, one exporter added:
“We withdrew from the trade fair in the United States because the orders I received caused me to incur losses.”
## Jewellery Industry Demands the Return of Its Chairman
Members of the Board of Directors of the Jewellery Exporters’ Association said:
“We want our chairman back from Ankara.”
Speaking at the fair held in Antalya, the Board members stated:
“As an industry, we are not asking Ankara for anything. We want our chairman, Burak Yakın, back.
In 2021, money was transferred to Burak Chairman’s account and gold was requested in return. They asked him to send the gold to an office.
The gold was received, and a signature was provided. There is a delivery receipt, and there is a signature. Now the person claims that they never received it.
The owner of a company already subject to MASAK supervision is being accused of such an offence. The total amount in question is TRY 8.2 million.
He has been arrested over a complaint relating to this amount, even though he sells tonnes of gold. We do not believe that the allegations are of a nature that would require pre-trial detention.”
Burak Yakın, Chairman of the Jewellery Exporters’ Association, was initially detained and subsequently arrested as part of an operation carried out the previous week. His lawyers filed an objection against the arrest decision.
Source: Dünya Newspaper