Gold imports revive goldsmiths at Syrian pound’s expense

Jewelers’ shops in the traditional al-Hamidiyah bazaar in Damascus - July 27, 2023 (Enab Baladi/Sarah al-Ahmad)

Jewelers’ shops in the traditional al-Hamidiyah bazaar in Damascus - July 27, 2023 (Enab Baladi/Sarah al-Ahmad)


Enab Baladi – Jana al-Issa

The Syrian regime’s government approved on October 15 a draft legislative instrument related to gold imports, under which it granted a set of exemptions to importers of raw gold, but according to certain conditions.

Although this decision contributes to reviving production and is in the interest of goldsmiths’ markets, it may negatively affect the value of the pound because the operations accompanying this legislative instrument require the already low trading of USD in the market.

$200 per kilogram

Under the legislative instrument, Syrians, resident, and non-resident foreigners are allowed to bring raw gold (an alloy weighing at least one kilogram of 24-carat gold) into Syria.

The importer of raw gold is exempted from obtaining a license to import gold, and he is allowed to bring in raw gold as a traveler, and he is also exempted from all taxes and fees resulting from the import process.

The exemption includes import duties, customs duties, and other taxes, service allowances, storage and insurance fees, consular certification fees, stamp duties, and local fees and taxes imposed under applicable laws.

In return, the person entering the raw gold is charged a financial fee in foreign currencies of $200 per kilogram collected from the Customs Secretariat, and it is transferred to the Central Treasury-Miscellaneous Revenues account in the general budget.

Producing jewelry within a month and a half

The legislative instrument requires the non-resident foreigner entering raw gold, within a period not exceeding 45 days from the date of granting the entry document issued by the Syrian Customs Secretariat, to produce locally manufactured gold jewelry from Syrian workshops licensed by the Ministry of Industry or the General Union of Craftsmen, equivalent to the weight of the imported raw gold, 18 or 21 carat.

The non-resident foreigner entering the raw gold is exempted from organizing an export declaration, and the gold jewelry is taken out in the company of a traveler.

In the event of a delay in removing the gold produced within the specified period, in accordance with a decision of the Governor of the Central Bank of Syria, the entry of raw gold will be fined with a fine equivalent to the value of a gram of gold for each day of delay, not to exceed the quantity of gold entered.

The fine must be paid in US dollars according to the international gold price on the date of payment.

If the fine takes the entire amount of gold that is late in its release, this amount will be collected as a fine, and it will be considered a final revenue for the state treasury.

The legislative instrument imposed on the importer of raw gold who distorts or changes the facts required for the entry and exit of gold, in accordance with the provisions of this law, a financial fine amounting to, for example, the value of the gold that is the subject of the violation.

Production revival

The goal of the legislative instrument, according to the government’s announcement, is to improve the state treasury’s imports of foreign currencies, support and stimulate the work of goldsmithing and jewelry manufacturing workshops, and employ labor, in addition to regulating the entry and exit of raw gold by a non-resident foreign person.

The economic research fellow at the Omran Center for Strategic Studies, Manaf Quman, said in an interview with Enab Baladi that the importance of the legislative instrument stems from the exemptions included within the decision for the import of raw gold, as there is no longer a need to pay import duties and taxes after the importer previously had to make about seven payments between fees and taxes.

Regardless of the financial costs resulting from these payments, there is a bureaucratic environment that the importer encounters due to the complexity of the steps and the large number of payments, so the black market has found a way to profit and benefit, according to Quman.

This means that there are goals related to encouraging local production, according to the researcher, because the decision was not only aimed at importing but also exporting, so the decision approved a fine for the importer in the event that the golden jewelry is not exported in the same quantity that was imported as raw gold within a specific period.

Pound may be affected

The research fellow Quman believes that the decision may revive the gold industry in the local market, driven by incentives to import and export abroad.

On the other hand, there is a beneficial point and a harmful point included in the legislative instrument, according to the researcher as the beneficial point is that the Central Bank of Syria imposed $200 on every imported kilogram of raw gold, and this will benefit the foreign exchange reserve.

The harmful point is that the importer needs foreign currencies in order to complete the import process, which will drive demand for the dollar in the local market, which already lacks the dollar, and thus, this may lead to a weakening of the value of the pound against foreign currencies in the coming months.

80% of sales are for savings

Since the beginning of this year, gold prices in local markets have continued to record an increase in value, recently reaching unprecedented levels.

Gold prices in Syria are affected by the international gold price and the exchange rate of the Syrian pound against foreign currencies.

According to a bulletin issued by Damascus’ Artisan Society for Goldsmithing and Jewelry Making on November 6, the selling price of a gram of 21-carat gold was 783,000 Syrian pounds, and its purchase price was 782,000 Syrian pounds.

While the selling price of an 18-carat gram was 671,143 Syrian pounds, and its purchase price was 670,143 Syrian pounds.

The US dollar is trading at 13,900 SYP according to the S-P Today website, which covers the trading rate of the Syrian pound to the dollar. At the start of the conflict in 2011, the dollar was trading at 47 pounds.

Ghassan Jazmati, head of the Craft Association, told the government newspaper Al-Baath on October 12 that during the period of the decline in the price of gold, the markets witnessed a stagnation in demand for it, explaining that gold customers who rely on it as a means of saving money are carefully monitoring its price. If the price decreases, the demand for it decreases, and vice versa.

Sales of gold pound (Lira) amount to about 80% of sales in gold markets in Syria, which means a high percentage of purchases for saving.

In mid-August, the state-run Al-Thawra newspaper indicated that there was a complete absence of gold savings of pounds or ounces in a number of goldsmiths’ markets in Damascus, while various pieces of gold jewelry were abundantly available.

The newspaper indicated that the reason behind this is due to the intense demand for physical gold savings, which causes the quantities to run out within a record time of their introduction, and to the loss of merchants, which does not encourage them to increase the produced quantities of golden pounds and ounces beyond the quantity specified since the introduction of the pounds and ounces.



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