The United States government has sanctioned a network of companies owned and controlled by Alain Goetz, a Belgian businessman who owns a gold refinery in Uganda, for allegedly participating in the illicit trade of gold from the Democratic Republic of Congo.
The sanctions announced last Thursday target Alain Goetz, the African Gold Refinery, two United Arab Emirates-based gold refineries that import gold from AGR, a gold trading company based in the UAE, a management company in Belgium, a four holding companies based in Belgium and the Seychelles.
The move is part of a campaign targeting individuals and entities “involved in activities that threaten the peace, security, or stability of the DRC” and “undermine democratic process or institutions” in the country.
The US Treasury Department, which announced the sanctions, said the illicit trade of gold by Mr Goetz and his companies “provides revenue to armed groups that threaten the peace, security, and stability of the DRC.”
It identified Mr Goetz as a significant player in the smuggling of gold from the eastern DRC through neighbouring countries and to international markets. Mr Goetz owns the African Gold Refinery in Entebbe which, with a refining capacity of 219 tonnes per year, is one of Africa’s largest gold refinery — only South Africa and Ghana have larger refineries. AGR was formed in 2014 and is controlled by Mr Goetz through AGR International, an offshore holding company in the Seychelles.
“More than 90 per cent of DRC gold is smuggled to regional states, including Uganda and Rwanda, where it is then often refined and exported to international markets, particularly the UAE,” the Treasury Department said.
Gold overtook coffee as Uganda’s most valuable export commodity in 2018, even though negligible amounts are mined locally. The source, as previously exposed by the United Nations, is smuggled gold from the DRC. The Treasury Department noted that AGR was refining about 150 kilograms of gold from the DRC weekly in 2018, amounting to 8.5 tonnes annually valued at $496m. “This amounts to almost all of Uganda’s total gold exports in 2018, which were approximately 10 tons and valued at $515 million,” it said.
Related: UN report links Uganda to smuggled DRC gold, says exports are underdeclared
“In eastern DRC, where there are approximately 130 active armed groups, the gold trade is a major driver of conflict. A network of armed groups, smugglers, and companies generates illicit revenue from the gold industry through forced labour, smuggling, or by extorting payments from miners. These actors use revenue from gold to finance armed conflict and enrich themselves while depriving the DRC of tax revenue and disregarding the environment and local communities.”
Brian Nelson, the undersecretary of the Treasury for terrorism and financial intelligence, said conflict gold is the largest souce of revenue to armed groups in eastern DRC. “Alain Goetz and his network have contributed to armed conflict by receiving DRC gold without questioning its origin. Treasury has been very clear: global gold markets, at every step of the supply chain, must engage in responsible sourcing and conduct supply-chain due diligence,” he added.
The US Treasury added that Mr Goetz’s companies receive illicit gold from DRC mines “controlled by armed groups, including the Mai-Mai Yakutumba and Raia Mutomboki that are involved in destabilizing activities in South Kivu, DRC.” The network “has extensive refining and transport capabilities and sources gold from DRC, Kenya, South Sudan, and Tanzania.”
The move blocks all Mr Goetz’s property and ownership interests in property in the United States or in the possession or control of American citizens. Any companies in the US which he owns or has a controlling stake in are also be blocked. He is also blocked from doing business with entities incorporated in the US and their foreign branches, US citizens, and permanent residents.
The sanctions are the latest setback to Mr Goetz and his refinery operation. AGR suspended gold exports last July in response to new taxes targeting its business. The taxes include a five per cent export levy on the value of a kilogram of processed gold and a ten per cent levy on the value of unprocessed minerals exported out of Uganda. The suspension led to a 43.3 per cent drop in the value of gold exports according to preliminary figures, from $1.8bn in 2020 to $1bn (Shs3.7tn) in 2021.
