Open Letter to the Jewelry Industry about Russian GoldMar 09, 2022
Is the gold you're buying helping to finance Russia's war against Ukraine?
The jewelry industry is susceptible to exploitation if the Russian government uses gold supply chains as a tool to evade sanctions and further subsidize their military aggression against Ukraine. It is imperative that we work together to prevent this from happening.
Over the last 10 days, Christina T. Miller Consulting (CMC) collaborated with a working group concerned about addressing the question, “Could Russia use the jewelry industry as a conduit to convert their gold reserves and mined gold to cash to fund their war effort?”
The answer is yes. Gold is notoriously difficult to police
And yet, it is our responsibility to work toward increased transparency of gold supply chains (and other jewelry materials) to help prevent the financing of the war on Ukraine and frankly, any financing that supports human rights violations.
To give you a better idea of the spectrum of activities that gold can fund, we are sharing an excerpt from the Gold Toolkit we drafted for Amazon Aid Foundation in 2019, to accompany screenings of the film, River of Gold.
There are many more examples once you start looking
- Gold as a vehicle for money laundering. Dirty money from illegal cannabis sales in France were used to purchase gold jewelry and ingots in Belgium. The gold was then sent to Dubai using false invoices and fake companies before being taken to India and declared to customs using the false invoices. The gold was then sold in India and the money paid back to the drug traders. (1)
- Private companies engaged in criminal activity. In exchange for access to gold in the Shabunda territory in eastern Congo - a private Chinese company, Kun Hou Mining, gave AK47s to insurgents operating in the area and ordered them to secure access to the deposits. Members of the armed groups also earned up to $25,000 per month by illegally taxing local artisanal miners under direction of the company. The company then sold that gold internationally, including to Dubai. (2)
- Gold was used to finance terrorism. A narco-terrorist group in Colombia takes control of a territory where a gold mine is in production. They gain control of the mine by extorting the mine owners and forcing the community to transfer ownership titles to the group by way of violence. The group then uses the mine and sells part of the gold to a legal business with the transaction paid in cash. The cash is then used to buy materials to support the narco-terrorist group, such as medicine and munitions. (3)
We encourage all of our readers to be vigilant of their supply chains of gold, diamonds, and gemstones. In the coming weeks we will be developing materials along with industry partners to help guide you in your sourcing activities. Taking a stand is the first step. Then we work together to determine the necessary steps for implementation.
At this time, we invite you to visit the Global Gold Transparency Initiative, read the letter and add your name to the growing list of signatories.
The CMC Team
Christina, Cecilia, and Ana
(1) FATF and APG (2015), Money laundering and terrorist financing risks and vulnerabilities associated with gold, FATF, Paris and APG, Sydney www.fatf-gafi.org/topics/methodsandtrends/documents/ml-tf-risks-and-vulnerabilities-gold.html
(2) Pickles, S. (2015, January 5). River of Gold. Global Witness. Retrieved from https://www.globalwitness.org/it/campaigns/conflict-minerals/river-of-gold-drc/
(3) FATF and APG (2015)
The Global Gold Transparency Initiative is a collective of experts, non-profit organizations, companies and individuals united to focus the world's attention on the humanitarian, political, environmental and economic impacts of gold mining and gold transactions. Among our fundamental goals are responsible and transparent supply chains, mercury-free mining, and the reduction and eventual elimination of illicit activities connected to gold.
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