Gold smugglers 'aimed to avoid pounds 3m in tax'

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There is no business sense in importing gold legally from Belgium to London, a court trying a pounds 20m gold-smuggling case was told yesterday.

Gold expert Alan Baker said: "I see no logic in it whatsoever. It would cost you money to get it over from there."

Knightsbridge Crown Court was shown a one kilogramme gold bar of the type that police officer Lucy Gilmore is alleged to have smuggled into Britain.

Mr Baker, chairman of the London Bullion Market Association, said the bar - the size of a small chocolate bar - was 99.5 per cent pure - "the purest type of gold you can get".

The police officer and co-defendant Surrinder Kumar are alleged to have been couriers during an 18-month operation in which more than 3,000 kilos of gold were smuggled from Belgium, evading more than pounds 3m in value added tax.

Ms Gilmore, 25, of Bridgnorth, Shropshire, and Mr Kumar, 32, of Sutton Coldfield, both deny conspiring to evade the VAT on precious metals.

Gilmore's father Michael, 53, of Crathie, Grampian, pleaded guilty to the conspiracy at an earlier hearing.

Mr Baker told the court London was the centre of world trading in gold. "If you want to buy gold you come to London and buy at the basic, rock bottom price," he said.

Traders tried to avoid moving gold because of the high cost of insurance, security and special shipping arrangements, and the risk of robbery. He said the Belgian gold market was extremely small, and agreed with Peter Rook QC, for the prosecution, that it would not be economic to import it.

Cross-examined by David Owen-Jones, defending Mr Kumar, Mr Baker agreed there would be a substantial profit margin in smuggling gold from Belgium or London to India.

The trial resumes today.