South Korea has opened its first gold exchange as part of a strategy to clamp down on the nation's rising illegal trade in the precious metal. The bourse said it offered some perks to lure clients in the open market.
South Korea announced Monday it had opened a gold trading exchange for the first time in a bid to help counter the country's burgeoning black market activities surrounding the precious metal.
The Financial Services Commission noted it was resolved to intensify a crackdown on black market transactions, with smuggled gold being traded secretly through underground structures as an effective way of hiding income and avoiding tax.
South Korea's total gold trading volume is estimated at more than 100 tons annually, but about 70 percent of it is traded illegally.
Perks offered to traders
"The gold spot market will help normalize the unregulated circulation of gold," the commission's chairman, Shin Je-Yoon, said in a statement.
The new exchange offers one-gram units of bullion of 99.99-percent purity. Traders were reported to get a waiver on the 3-percent import duty for gold, but they were still required to pay a 10-percent value-added tax for taking physical delivery of bullion.
South Koreans privately hold an estimated 720 tons of the precious metal, compared with just 104 tons kept at the central bank.
Since the 2008 global financial meltdown, gold has become increasingly attractive as it widely considered a safe haven for investment particularly in times on market turmoil.
hg/slk (AFP, dpa)