Brian Sims
Editor
Brian Sims
Editor
THE NATIONAL Crime Agency has issued an alert to financial institutions and other members of the regulated sector warning that Russia is using gold as a means to undermine the impact of the UK’s sanctions regime.
Gold is a significant income stream for Russia’s war effort. Indeed, it’s one of the highest by value after oil and gas, and worth £12.6 billion to the Russian economy in 2021. The Foreign, Commonwealth and Development Office has sanctioned a number of individuals and entities operating in and supporting Russia’s gold sector.
Given the importance of the UK to the gold market, the National Crime Agency is warning of deliberate attempts being being made to launder sanctioned gold in a bid to mask its origin such that it can be ‘hidden’ in supply chains before it’s sold on in the UK and around the world.
Gold exported from Russia since 21 July 2022 is increasingly being shipped to countries that do not apply sanctions on Russian gold. Once melted down and recast or refined, the origin of gold cannot be determined by examination as any hallmarks are lost. Imports of mined gold can also be easily disguised.
By masking the origin, new Russian gold can then be sold on to another country which may be unaware of its true origin.
Undermining national security
Adrian Searle, director of the National Economic Crime Centre at the National Crime Agency, explained: “Sanctions evaders undermine UK national security, working against our foreign policy objectives, which actively promote international peace and security and the rule of law. Given the robust implementation of controls by the UK’s financial sector and our international partners to identify and disrupt sanctions evasion, we have seen consequent attempts to use gold to circumvent the sanctions regime.”
Searle continued: “London’s precious metals market sets the global standard for the quality of gold. The sector plays a key role in supervising the trade and improving record-keeping to boost the integrity of the supply chain. In partnership with the regulated sector, including the banks and high-value dealers, this alert will aid efforts to ensure that sanctioned individuals, or those who represent them, cannot use gold to circumvent UK sanctions.”
The London Bullion Market Association accredits gold refineries around the world. It sets the standards for what constitutes ‘London Good Delivery’ gold, which has become the de facto global standard. The London Bullion Market Association’s accredited refineries actually account for 85%-92% of annual global mined gold production.
