Smuggling Siberian gold

Gold smuggling is on the rise along the border with China as a means of earning money in one of the poorest areas of the Russian Federation. No licences are required in the People's Republic: any citizen can sell the extracted material to banks in any form, receiving more than double the price quoted in Moscow.

Dozens of “loads” have been discovered at the border, but most of the time it all ends with a fine. Moscow (AsiaNews) - Gold smuggling has been growing rapidly in recent times in Siberian regions, mostly re-imported from China, where the free market for bullion is not prohibited, unlike in Russia.

The news agency Ljudi Bajkala, ‘Men of Baikal’, has published extensive material on how the inhabitants of the Zabajkal region, around Siberia's largest lake, are not afraid to risk long prison sentences for illegally searching for gold in the area and attempting to export it abroad in order to earn some money in one of the poorest areas of the Russian Federation.

The first known offender was assistant train driver Aleksandr Konygin, who in September 2020 was due to travel to China with a train loaded with coal via the Zabaykal border crossing. Two days before departure, his friend Artur Gasparyan wrote to him on WhatsApp, offering him 300,000 roubles (3,000 euros) to take 36 kilos of gold in 102 ingots to China. His friend was also just a middleman, working for a Chinese man called Jura, who promised him 500,000 roubles. It was not the first time that the latter had worked in the field of illegal gold transport, and he was caught by the police, but he did not betray his “friend Jura”, thus securing the trust of his clients.

In 2020, the border with China was closed to tourists and travellers due to the coronavirus, but the trafficking could not be stopped, and Konygin was called back into service along with the chief engineer, Aleksey Sanin, who was in desperate need of extra income. Once they arrived in Manchuria, they would split the promised €300,000. Gasparyan managed to put them in touch with another Chinese friend named Zhanna, and the two hid the gold in the cabin air conditioner and the drivers' storage room. However, they were discovered at the border thanks to the Jantar system, which detects gamma radiation from neutrons in cargo, and the two were forced to admit to transporting the gold in front of FSB officials, receiving a six-year prison sentence but without betraying “Jura” and “Žanna”.

The Zabaykal region remains one of the leaders in illegal gold mining in Russia, and according to local authorities, 39 tonnes were extracted illegally in 2023. The town of Zabajkalsk, on the border with Manchuria, has no more than 13,000 inhabitants and is known for its large market selling all kinds of goods, with a few hotels, a nursery and a hospital, all geared towards border trade. The most important facility is the railway terminal, through which Russian grain has been transported to China since the start of the war in Ukraine, and local authorities constantly talk about developing trade with China.

Gold trading is only permitted for licensed companies, which are required to send the extracted material to refineries where the gold is separated from impurities to produce high-quality metal, and only then can it be sold abroad. In China, on the other hand, any citizen can sell gold to banks in any form, according to the London Stock Exchange price. Russians sell it for 2,000 roubles per gram, while in China it already costs more than 4,000 roubles, as Artur Gasparyan explained in court. The price on the stock exchanges continues to rise, and this year it has exceeded 8,000 euros per gram, attracting many new reckless businessmen. In recent years, dozens of cases of smuggling have been uncovered by the border police and the FSB services in Zabajkalsk, but most of the time everything is resolved with a few fines.

The Russians and Chinese involved often try to hire a Buryat citizen to transport the goods, hoping that they will attract less attention, with loads leaving Ulan-Ude in private cars, in a smuggling scheme mostly organised by Chinese citizens using false Russian names. They are joined by several Russians from Zabaykal, who, when arrested, complain in court about “financial problems” in one of the most economically depressed areas, along with neighbouring Buryatia, the Republic of Tuva and the Jewish Autonomous Province, where the quality of life is constantly declining, with people dreaming of gold as a way out.