The gold trading business is in the spotlight and once more El Dorado Trading is at the centre. The situation is such that the Financial Intelligence Unit has ordered a comprehensive review of the entire gold trading operation.
The Financial Intelligence Unit is responsible for flagging suspicious financial transactions. The FIU renewed its interest in the gold industry after the Royal Canadian Mint report that it was suspending trading in gold sold to the Guyana Gold board by El Dorado Trading.
This decision was sparked by reports that El Dorado Trading was connected to illegally traded gold from Venezuela. Toward the end of 2019 the FIU set about investigating whether the United States dollar traded by the cambios, both legal and illegal was funding the purchase of the illegal gold from Venezuela.
El Dorado Trading owned by Tamesh Jagmohan has a cambio licence. However, he is not known to operate a cambio although he is reported in some quarters as being one of the largest cambio operators in Guyana.
Jagmohan claimed that he helped stabilize the local economy and the foreign exchange rate by contributing some US$400 million through the banking system by way of remittances from overseas.
This money was supposed to come from the sale of gold on the international scene.
In addition to the cambios the FIU also began to focus on gold dealers, one of whom is Tamesh Jagmohan through his El Dorado Trading. It said that El Dorado Trading, L. Mahabeer and Son Cambio and Mohamed Enterprise were influencing the supply of foreign exchange, hence the exchange rate.
El Dorado trading is not a gold mining company. It buys its gold from miners. The FIU noticed that the gold purchases and exports climbed steadily over the 2018 declaration.
Despite this increased business activity, declarations by El Dorado Trading of money coming into Guyana declined significantly. It dropped from US$48 million in 2018 to much less in 2019.
There was also a high volume of declared currency being shipped out of Guyana. Some US$40 million was shipped out between 2018 and mid-2019. But the FIU said that much more money was being shipped out without being declared.
This is done by moving sums below the threshold for declaration. The minimum threshold for declaration is US$10,000.
There were reports that the FIU reported to then Attorney General Basil Williams, a claim that Williams has denied.
Former Finance Minister Winston Jordan recalled arranging a meeting with the Bank of Guyana, the Guyana Gold Board and the Finance Intelligence Unit.
He said that this was after the government learned that there was a large movement of US$100 notes across the border in Region One, to Venezuela.
There was a prevalence of smuggled money at Port Kaituma. Soon there was a shortage of US$100 notes. This was brought to the attention of Cabinet.
The concentration on the US$100 note was because it was easy to move to Venezuela in exchange for gold.
Jordan said that requests were made for several investigations but nothing materialised.
Jordan said that it would be interesting to see if the government mounts an investigation, especially in light of the fact that Jagmohan has paced the entire gold market at risk.
The Canadian Mint, the United Kingdom and the United States have blocked gold supplied by Jagmohan.
