ERBIL, Kurdistan Region - The president of the Kurdistan Region’s importers and exporters union told Rudaw on Wednesday that gold is being smuggled to Iran from Sulaimani province, revealing that 95 percent of transportation companies have left the Bashmakh border due to customs problems.
“Gold is officially exported to Turkey and traders are charged $900 per kilogram of gold ingot, but it is smuggled to Iran,” Sheikh Mustafa Abdulrahman, president of the Kurdistan Region’s Importers and Exporters Union, told Rudaw’s Shiraz Rauf.
“The amount of gold smuggled [to Iran] is unknown because the routes taken are unofficial,” he added.
There are two types of gold that are imported to the Kurdistan Region - the first being gold ingots from Dubai and the second being cloth cold from Turkey and Iran. Both are sold to traders across Iraq, according to Abdulrahman, who said that the Kurdistan Region has become the center of gold trade in the region.
“Gold is transported into Sulaimani airport in tons and the smuggling operations are only conducted to Iran, not to any other country,” Abdulrahman noted.
Regarding the trade situation in the Kurdistan Region, Abdulrahman lamented that the market has significantly weakened, especially in Sulaimani province which has seen a 25 percent decline in trade. He attributed the lack of imports and exports to the nonpayment of salaries to the Region’s civil servants.
The Kurdistan Regional Government (KRG) has struggled to meet its payroll for several years. Civil servants went unpaid for around 90 days before a deal was struck between Baghdad and Erbil in mid-September. The federal government agreed to lend Erbil 2.1 trillion Iraqi dinars to pay three months of salaries.
Financial woes in the Kurdistan Region have mounted ever since exports of Kurdish oil through the Iraq-Turkey pipeline were halted in March 23 when a Paris-based arbitration court ruled in favor of Baghdad against Ankara, saying Turkey had breached a 1973 agreement by allowing Erbil to begin independent oil exports in 2014.
The halt in exports has incurred over $7 billion of losses to the Iraqi and Kurdish governments.
In addition to salary woes, the trade sector in the Kurdistan Region has collapsed due to customs procedures, according to Abdulrahman, who said that Kurdish traders have turned to the Iraqi customs gates because in Iraq, there is a difference of $3,000 in customs fees and it is cheaper in Iraq.
“Due to the decrease in trade movement and Kurdish businessmen turning to the Iraqi posts, 95 percent of companies that transport goods have left the Bashmakh border and have gone to work in Basra,” he said.
The demand for gold has risen in the Kurdistan Region and the price per ounce is expected to reach $2,300 next year, Luqman Aziz, a gold trader, told Rudaw’s Mohammed Sheikh Fatih on Wednesday.
“There is a demand for gold in large quantities,” he said. “Multi-kilo ingots have increased significantly.”
The Kurdistan Region has four official border crossings with Iran – Haji Omaran in Erbil province, Bashmakh in Sulaimani province, Parvizkhan in the Garmiyan administration, and Shushme in Halabja - as well as many other unofficial border points.
In September 2020, a network that smuggled hundreds of millions of dinars' worth of goods into the Kurdistan Region through the Parvizkhan crossing was uncovered after an investigation by the Kurdistan Region's finance ministry and customs directorate.
