U.S. sanctions regarding illicit movement of gold from Congo

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) today announced sanctions regarding those involved in the illicit movement of gold from the Democratic Republic of the Congo (DRC).

As noted in the OFAC release, this action reflects the U.S. commitment to disrupt the illicit mineral trade and encourage mining sector transparency. 

As explained by OFAC, more than 90% 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. 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 labor, 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.

Today’s release states that the United States supports private sector adoption of supply chain due diligence procedures in mineral supply chains, including ones for precious metals and gemstones. Today’s action is intended to show that given the multiple threat finance concerns throughout these supply chains, due diligence is a key tool for the private sector to mitigate risks from U.S. and international sanctions regimes.

Additionally, U.S. companies that are required to file a “conflict minerals report” to the U.S. Securities and Exchange Commission must exercise due diligence on the source and chain of custody of their conflict minerals, including gold. The due diligence measures must conform to a nationally or internationally recognized due diligence framework.

For more information, contact a professional with KPMG’s Trade & Customs services: