The U.S. Treasury has imposed financial sanctions on gold mining and trading companies that are funding the infamous Wagner Group that has waged war on Ukraine and recently engaged in a short-lived revolt against the Russian military with whom it had been fighting. Based in the Central African Republic and the United Arab Emirates, the companies “engaged in illicit gold dealings to fund the Wagner Group to sustain and expand its armed forces,” according to the Treasury.
Treasury’s actions are a reminder to investors that the provenance of gold bars and coins can be difficult to determine and may originate from mines that operate illegally or unethically.
The sanctions freeze all assets of the organizations that are in the United States, or controlled by Americans, and prevent any U.S. company from doing business with the sanctioned organizations.
The Central African Republic companies are Midas Ressources SARLU, which extracts gold from the Ndassima gold mine, believed to hold ore deposits worth more than $1 billion, and Diamville SAU, a gold and diamond trading company controlled by Wagner Group leader Yevgeniy Prigozhin. Also sanctioned is Industrial Resources General Trading of Dubai, United Arab Emirates, which worked with Diamville in 2022 to convert gold into U.S. dollars.
The Wagner Group has previously been tied to gold mining operations in Sudan and Mali.
American investors seeking to ensure that their gold purchases are not sourced illicitly can rest assured by purchasing American Gold Eagle bullion coins, since by law they must be produced from gold mined in the United States.
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