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Comment by ryandrake | Hacker News Reader

Sorry, but as a layman I don’t get it. How does putting a fake stamp on a real commodity item help me to launder money? Is it like shoes where an identical product with the right logo costs more? This wouldn’t seem to affect anyone except the refinery who wanted to charge more for a logo, and I don’t see how it ties in with money laundering.

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Some unsavory regimes are in control of natural resource mines (like gold or diamond). In an attempt to withhold funds from these regimes, it’s common to not buy gold or diamonds that came from these places, despite them being the same physical product.

By counterfeiting the stamp, gold from these places can be passed off as being from one of the acceptable regions of the world. This is effectively smuggling items through a metaphorical blockade.

The way I see it:

Say you've got a source of gold that no one else will touch (illegal mine, sanctioned country, slave labour, stolen gold, etc). It costs you way below market price, but no one will buy it from you.

You pour it into bars, stamp it with fake brands and sell it at market price to anyone you want.

Instant profit and your hands/money are clean.

Certain parties operating in the UAE will touch it. This is just one further step away from selling it as jewlery.

https://www.hrw.org/news/2016/04/12/dispatches-child-labor-d...

I tend to think the article is trying to inject some shadow over gold market, like in "careful with buying gold, you'll probably end up buying a bar of rusty iron". You have to read four paragraphs to read the first explanation that there's no problem with the gold quality.

Gold may be the dirtiest commodity out there. There are plenty of people that buys gold without worrying about its origins, to immediately melt it into something else. People that doesn't care where a meth head got this 24k gold necklace, will trade it for about 10% its value and melt it into jewelry again.

I'm sure the last worry of people buying gold bars is the source of them, specially if you can get them at a small discount. "Hey, look: I'm getting rich selling tobacco to children, weapons to both sides of a war, paying doctors to prescribe my drugs, flooding the oceans with crude oil... but that gold origin is what worries me at the end of the day."

So, like Die Another Day, where that villain takes blood diamonds into Iceland to obscure their origin and sell them like they came from there?

Try walking into your local bank/gold dealer and selling a Swiss marked bar of gold or one that has the the markings of a drug cartel and see which you would prefer to sell...

The stamp lends a level of surety about the product both in origin and quality. If I'm buying a bar and I know it comes from refinery X with a long reputation I don't have to worry as much about the bar being gold/silver/platinum at the stated quality. It's not perfect but with other documentation about the source that matches what the bar is telling me it provides a level of certainty. I worked in my family's pawn shop as a kid and the rare chance to buy a bar (I only ever bought a silver bar so it wasn't as big a deal) was always stressful because there's no good way to check the quality of the whole bar (this was before the advent of the handheld devices but even with those you have to worry about it being say lead with a thick layer of gold around it).

Actually it's not _that_ difficult to do transmission X-Ray diffraction measurements. Or for gold, just measuring density. You do need to do the latter to like 5 significant digits, but that's not hard per se.

Density isn't hard in a technical sense it's just a pain and you have to have the resources to do it. Namely a way to accurately measure the displacement which wasn't something we had.

A majority of our gold testing was designed for jewelry and used a rough glass square and an acid blend for the different major carats of gold we would see. It worked by rubbing off a small part of the gold onto the glass then adding some acid and watching it's reaction, if it wasn't gold or was lower purity it would dissolve and disappear quickly. It was rudimentary but it worked well enough, there were some subtleties with exactly how it should react that you learned over time.

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