Hong Kong officials confiscated an estimated $10.7 million worth of gold disguised as machine parts being shipped to Japan. 

The Biggest Gold Smuggling Bust in Hong Kong

According to CNBC, this is the largest gold smuggling bust in the city. A government statement released on Monday said the 146 kilograms of gold had been "molded and camouflaged" as part of two air compressors in the cargo of an airplane parked at Hong Kong International Airport.

Authorities released images revealing that the precious metal had been formed into cylinder-shaped parts and screw-like shapes and then coated with paint to hide it. Due to scrapes on the surface, the gold underneath was exposed.

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Suspect in Gold Smuggling Released on Bail 

Hong Kong customs discovered the gold while examining the machines on March 27, and a 31-year-old man was arrested in connection with the case on Wednesday after a follow-up investigation.

According to a customs official, the suspect in the smuggling operation wanted to evade import tariffs of around 10% in Japan, saving over $1 million had the operation been successful.

The arrested man has been freed on bail pending further investigation. Smuggling is a serious offense in Hong Kong, and any person found guilty of importing or exporting unmanifested cargo could be imprisoned for up to seven years and be fined a maximum of $2 million.

Gold prices have hit successive record highs this year amid mounting concerns over inflation, geopolitical tensions, and economic instability. On Monday, the commodity's spot price hit a new high in the United States, closing above $2,340.

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