- Written by James Bargent
- Thursday, 09 January 2014
The record seizure in Peru of half a ton of illegally mined gold destined for the United States and Europe highlights the scale and international nature of the country’s $3 billion dollar illegal gold trade.
Peruvian newspaper El Comercio has uncovered details of an investigation sparked by the discovery of 508 kilos of gold believed to have come from the illegal mining sector in December 2013.
The gold — worth an estimated $18.8 million according to El Comercio — was due to be sent by air by six export companies based in Lima to the Kaloti Metals & Logistic, NTR Metals, and Akam Asset refineries in the United States and the Italpreziosi refinery in Italy.
After the export companies responsible for the load were unable to prove its origins, financial crime and anti-money laundering agencies launched an investigation.
One of the companies involved, Ares Gold, has been under investigation for money laundering since 2012, when it was linked to the seizure of large quantities of cash, according to El Comercio.
The haul is fifteen times larger than the previous record seizure of illegally mined gold — 34 kilos, discovered in 2013.
InSight Crime Analysis
According to Peruvian officials, the country’s illegal gold mining sector is worth an estimated $3 billion a year, making the movement of such large quantities of illegally sourced gold likely a common occurrence.
However, it is unusual for the Peruvian authorities tasked with tackling illegal mining to make seizures at the point of export. Instead, authorities focus their efforts on producers, processing plants and traders lower down the chain, according to El Comercio, which has been carrying out a long running investigation into the trade.
SEE ALSO: Peru News and Profiles
The gold seized in December had already moved through this chain, and was just one step away from disappearing into the legal gold market. Companies such as those awaiting the shipment in the United States and Italy are technically required to monitor the supply chain and ensure the legality of the shipment, but in reality frequently accept whatever spurious evidence of origin is offered. Once in the hands of these foreign companies, the gold is melted down alongside legally sourced gold, disappearing into the global gold market.