Russia is using gold laundering operation to dodge UK sanctions and fund war

Third countries are reportedly melting down Russian gold before using London's gold market to launder the proceeds

Russia is using gold laundering operation to dodge UK sanctions and fund war
Gold
Third countries are reportedly melting down Russian gold before using London’s gold market to launder the proceeds (Picture: Andrey Rudakov/Bloomberg)

Russia is trying to dodge UK sanctions and use gold laundering to help fund its war effort against Ukraine, it’s been warned.

The National Crime Agency (NCA) has issued a ‘red alert’ to London-based gold traders over the operation worth billions of pounds.

It warns Moscow is trying to circumvent Western sanctions by using third countries to melt down bullion bars and jewellery of Russian origin, before going on to use London’s gold market to launder the proceeds.

Gold is one of Russia’s main sources of revenue, alongside oil and gas, with the precious metal generating nearly £13 billion for the Russian economy in 2021.

Russia is the world’s third-largest producer of gold in the world, with 300 tonnes of new gold mined there every year.

Last year the UK imposed sanctions to crack down on Russian gold exports, banning the import or sale of gold from July 2022 onwards – and London is one of the world’s leading centres for trading and regulating gold.

A document from the NCA sent to financial institutions and regulators said there was evidence of systematic attempts by Russian groups to send gold to countries which don’t enforce Western sanctions.

A worker removes cooled gold ingots from molds in a foundry. Photographer: Andrey Rudakov/Bloomberg
Gold is one of Russia’s main sources of income (Picture: Getty Images/Bloomberg Creative)

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The red alert said: ‘There is a concern that deliberate attempts are being made to launder sanctioned gold to mask its origin for circumvention purposes, so that it can be hidden in supply chains and sold in the UK.’

The NCA said it appeared that multiple routes were being used to allow Russian gold exported to third countries to enter the legitimate market, including using it to produce jewellery which is eventually scrapped and turned into bullion at accredited refineries.

Adrian Searle, director of the NCA’s economic crime centre, told i: ‘London’s precious metals market sets the global standard for the quality of gold.

‘This alert will aid efforts to ensure that sanctioned individuals or those who represent them cannot use gold to circumvent UK sanctions.’

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