This Report aims to depict the financial flows that fuel crimes such as Illicit Dealings in Gold, Diamond and Rubies and related ML/TF in the ESAAMLG Region. The report includes a list of risk indicators and case studies that can help the concerned institutions in the Region to identify and investigate illicit activities in the precious stones and metals (PMS) markets, and also highlights the importance of rapidly identifying and tracing PMS involved in money laundering or terrorist financing.
The lucrative returns associated with illicit dealing in PMS have made the criminal activity an attractive vehicle for laundering money and financing terrorists. Illicit dealing in PMS provides a mechanism for organised crime groups to convert illicit cash into a stable, anonymous and easily exchangeable asset to realise or invest the profits from their criminal activities. Precious metals and stones have been used as an alternative currency to purchase prohibited or restricted goods, such as gold for cocaine, and diamonds for weapons, or as a means to store wealth generated by illegal activity which is not easily traceable for criminal processes such as seizures and confiscations.
PMS have been smuggled from source to consumer countries, including to finance armed conflicts. Additionally, the high value of PMS may lead officials from relevant competent authorities to demand or accept bribes at every stage of the extraction and trade process. If the use of PMS in illegal activities remains unabated in the ESAAMLG region it can pose serious threats to the economies and political stability of the region (if consideration is made of the situation in Eastern DRC and rising of terror groups in the Northern Province of Cabo Delgado of Mozambique which are both rich in metals and precious stones). This has led to jurisdictions undertaking intensive efforts to protect the sector from the risk of being abused by criminals. In the quest to have effective responses, it is imperative for the region to better understand the nature of these crimes as they relate to the region’s specific characteristics.
The report includes some good practices that ESAAMLG countries have taken to address the challenges they face, including the establishment of specialised units and access to relevant databases and cooperation with experts to help identify, trace, and investigate illicit financial activities involving PMS.Download Document
Posted: 14, Mar 23
|Memorandum of Understanding|
|Trends and Methods|
|Country National Strategies|
|Compliance and Financial Inclusion|