Interagency Effort Needed to Sanction Gold Trade Networks, House Panel Hears
The State and Treasury departments should form a task force to “robustly investigate and sanction” illicit gold trafficking networks, a watchdog group representative told a House panel March 25.
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Sanctioning entire networks would be more effective than targeting individual smugglers, refiners or officials, Sasha Lezhnev, senior policy adviser at The Sentry, testified before the House Foreign Affairs Subcommittee on Africa. The task force also could have more impact by coordinating with banks and other private-sector entities, as well as the EU, the U.K. and the U.N., Lezhnev said.
Although the U.S. recently sanctioned a United Arab Emirates-based company for buying gold from Sudan’s “genocidal” Rapid Support Forces militia group (see 2501070024), “this only touched the tip of the iceberg,” Lezhnev said. “Many more significant sanctions against profiteering networks are needed to have an effect.”
After the hearing, Lezhnev told Export Compliance Daily he hasn't yet discussed the task force idea with State and Treasury but intends to flesh out the concept in an upcoming article in Foreign Affairs magazine. “We would absolutely welcome some dialogue with Secretary [of State Marco] Rubio and his team, as well as [Treasury] Secretary [Scott] Bessent,” Lezhnev said.
During the hearing, subcommittee Chairman Chris Smith, R-N.J., called the proposed task force an “excellent idea” that he plans to raise with State and Treasury.
Lezhnev also recommended creating a public-private initiative to increase transparency on gold trade data. “There is currently no reliable real-time gold trade data available, leaving sanctions bodies and others trying to combat the illicit gold trade significantly behind the curve of criminal actors,” he said. He also called for the U.S. and the EU to work with UAE Customs to identify gold smuggling patterns and companies and help indict and prosecute illicit actors.
Another hearing witness, Thierry Dongala, founder of Accountable Africa, said the Office of Foreign Assets Control should issue licenses to gold traders who meet high standards of accountability to help them find alternatives to Chinese financing. He said the U.S. reliance on sanctions for Africa has “driven away compliance-friendly trade financiers” in the mining sector.
To obtain OFAC licenses, traders would have to regularly share data on their activities, which the proposed task force could use to detect gold trading trends, Dongala testified. “Right now, the enforcers of sanctions are flying blind really, they’re trying to keep up with what everyone’s doing,” he said. “I think [the task force will] be helpful with making sure the sanctions remain effective.”