In Financial crime & money laundering, Uncategorized

Artisanal and small-scale gold mining (ASGM) accounts for approximately 20% of world supply, and is an important livelihood for tens of millions of people. However, since much of this production is informal and unregulated, the ASGM sector is vulnerable to criminal infiltration and illicit financial flows (IFFs). However, efforts to formalize ASGM to date have paid little attention to IFFs and the ways they inhibit creation of more equitable and sustainable modes of ASGM production and trade.

Recognizing the need for a greater understanding of gold-related IFFs, the Global Initiative against Transnational Organized Crime and Estelle Levin Ltd have partnered on the GIFF Project in an effort to provide greater insight into this issue and to develop solutions that will improve efforts to formalize the ASGM sector globally.

Background

Gold plays a significant role in global IFFs, and it is thought its role will continue to grow in the future. Currently, informal mining and gold smuggling are a significant source of IFFs, depriving governments of much needed revenue that could be put towards development aims. In addition, the high profit-low risk nature of the gold trade makes it an attractive revenue source for criminal actors. As such, there is a high-risk of illicit gold flows intermingling with more dangerous flows, such as drugs as arms, and the emergence of protection economies which result in increased violence and/or corruption.  Furthermore, gold is an attractive financial solution for engaging in anonymous financial transactions, moving illicit funds, and laundering money.

Responses to gold as an IFF, money laundering, and terrorist financing threat cannot be limited to law enforcement, but must include the development sector. It would not only be futile to attempt to eliminate ASGM activity, but would also have a detrimental impact on development – ASGM plays an important role as a livelihood option for millions of individuals and their dependents throughout the world. Formalization and reducing IFFs is a cyclical process, with each objective depending and building on the other. Formalization of the ASGM sector is essential to reducing IFFs and to achieve formalization it is necessary to identify and target actors in supply chains who have the ability to influence industry practices. These outcomes tie closely with the Global Initiative’s efforts to engage the development community in combatting organised criminal activity and networks.

Objectives

The GIFF Project’s objectives are to:

  • Raise awareness and understanding of IFFs and criminal networks in gold supply chains;
  • Create a network of stakeholders interested in and working on ASGM formalisation and IFFs in gold supply chains that will share knowledge and strategies; and
  • Provide stakeholders and decision makers (in government, civil society, and the private sector) with tools to identify, map, and address IFFs in their gold supply chains.

Events

  • GIFF Project Launch – December 2015
  • Washington DC Roundtable – February 2016