US Urged To Tackle Illicit Gold Boom Fueled By Soaring Price

US authorities are being pressed to step up efforts to combat the illegal gold trade, one of the largest and fastest-growing illicit economies in the Western Hemisphere as bullion prices surge.

An illegal gold mining and trafficking boom in several South American nations has become a crisis too large for the US to ignore, according to a report from the Financial Accountability and Corporate Transparency Coalition, or FACT, released Wednesday. In Colombia and Peru, top growers of the plants used to make cocaine, illegal gold is estimated to generate more money for organized crime than the drug trade itself.

The Washington-based financial advocacy group called on Congress to pass a bill that cracks down on the environmental and social impacts of illicit gold mining. FACT also wants illegal mining to be a building block for prosecuting money laundering and for gold to be included in cross-border currency reporting.

“By making illegal gold mining, trafficking and associated money laundering less profitable and more likely to result in serious consequences, the US can play a powerful role in reducing the financial incentives driving this devastating criminal economy,” FACT wrote.

The US lacks the tools to effectively respond to the illicit gold trade, a situation that’s been further complicated by shifting priorities in the Trump administration and staffing reductions this year, the report said. Behind the surge in illicit gold is a tripling of bullion prices over the past decade and lax law enforcement as authorities remain squarely focused on tackling the drug trade.

FACT urged the US to increase enforcement and prosecution efforts against transnational criminal networks involved in the illicit gold trade, implement gold-specific sanctions and resume funding for international projects related to combating illegal gold mining. The administration should also require collection of basic information about the real owners of companies as well as strengthen international information sharing and due diligence requirements for the U.S. Mint, according to the report.

“The recommendations are expected to resonate with folks in the US who are concerned about organized crime in Latin America — who see that as a threat to US interests and stability,” Julia Yansura, FACT’s program director for environmental crime and illicit finance, said in a telephone interview.