The NCA has alerted the industry to deliberate attempts being made to launder sanctioned gold, masking its origin to hide it within supply chains and facilitate its sale in the UK and globally.
Gold plays a significant role in Russia’s war efforts, with its value reaching £12.6 billion in 2021, making it one of the country’s highest income streams after oil and gas. In response, the Foreign, Commonwealth & Development Office (FCDO) has sanctioned several individuals and entities involved in Russia’s gold sector.
The NCA has observed increasing exports of gold from Russia since July 21, 2022, to countries that do not impose sanctions on Russian gold. Once the gold is melted down, recast, or refined, its origin becomes untraceable, as any hallmarks are lost. This makes it easy to disguise imported mined gold as well. By masking the origin, newly acquired Russian gold can be sold to unsuspecting countries who are unaware of its true origin.
Adrian Searle, Director of the National Economic Crime Centre at the NCA, emphasized the need to prevent sanctions evasion, which undermines UK national security and works against foreign policy objectives promoting international peace, security, and the rule of law. Searle highlighted the importance of the UK’s financial sector and international partners in implementing robust controls to identify and disrupt sanctions evasion. He also praised London’s precious metals market for setting global standards and playing a key role in supervising trade and improving record-keeping to enhance the integrity of the supply chain.
The London Bullion Market Association (LBMA), which accredits gold refineries worldwide and sets the standards for “London Good Delivery” (LGD) gold, has a crucial role to play in maintaining the integrity of the gold market. LBMA-accredited refineries account for 85-92% of global annual mined gold production.
The NCA’s alert has been issued to the regulated sector, including banks, high-value dealers, and lawyers. It aims to support efforts, in collaboration with these entities, to prevent sanctioned individuals or their representatives from using gold to evade UK sanctions.
