Dirty gold overtakes cocaine as crime’s cash machine
Criminal groups continue to shift from cocaine to illegal mining as banks and governments scramble to close financial loopholes.
Illegal gold mining has emerged as a highly lucrative enterprise for organized crime groups, surpassing cocaine trafficking in terms of revenue for some criminal organizations. This shift is primarily driven by soaring gold prices and weakened enforcement efforts. According to Julia Yansura, Program Director for Environmental Crime and Illicit Finance at the FACT Coalition, illicit gold mining is becoming an increasingly attractive, low-risk, and high-reward business.
Yansura explained that illicit gold can be seamlessly integrated into legitimate supply chains through forged paperwork or false identities, making it difficult to detect and prosecute. Furthermore, the "hand-carry" loophole allows criminals to transport gold bars across borders with minimal scrutiny as gold transactions are not subject to the same reporting requirements as cash.
This illicit activity is not confined to mining regions alone; once exported, the gold often enters the international banking system, exposing financial institutions to potential illicit finance risks. A recent survey by WWF-UK and Themis revealed that over 80% of financial institutions face such illicit finance risks due to illegal mining, yet only 40% have taken steps to mitigate these risks.
This vulnerability is particularly pronounced in the United States, where the country serves as the primary destination for Colombian gold exports, despite an estimated 80% of Colombia's gold being illicitly sourced. To combat this growing threat, Yansura advocates for a dual approach focusing on both financial crime and environmental enforcement.
She recommends implementing stronger beneficial ownership rules to prevent the concealment of illicit transactions through shell companies, designating transnational illegal gold mining as a predicate offense for money laundering under US law, and eliminating customs loopholes that permit high-value gold to cross borders with limited disclosure.
Written by urgent.news from Mining.com's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
