SMUGGLING CAPITAL
GAVIN KEETON: Why the UN's damaging report is very wrong on SA’s mineral exports
Simple logic shows a report accusing mining and oil companies in Chile, Ivory Coast, Nigeria, SA and Zambia of smuggling cannot be true
In June 2016, the UN Conference on Trade and Development (Unctad) published a report accusing mining and oil companies in Chile, Ivory Coast, Nigeria, SA and Zambia of smuggling huge amounts of capital abroad, allegedly to avoid local taxes and bypass exchange controls. The report compared the value of each country’s mineral and oil exports against the reported value of the same commodity imports by their main trading partners. The discrepancies were attributed to companies understating exports. This would allow them to declare reduced profits and taxes in the countries where they operate while earning full value overseas on what they actually produced. In this way, mining and oil companies were said to have misappropriated as much as 67% of export revenue between 2000 and 2014. South African gold producers were accused of "smuggling" $78.2bn abroad. Silver, platinum and iron-ore producers were accused of underinvoicing by $24bn. Yet simple logic shows this cannot be true. If gold p...
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