US slaps sanctions on Hong Kong, UAE firms for Russian-origin gold deals

The United States imposed sanctions on Wednesday on several Hong Kong firms, including VPower Finance Security, for involvement in transportation of gold produced by already sanctioned Russian miner, the US Department of the Treasury said.

 

In the new sanctions list, Washington aimed at raising pressure on Moscow for its war against Ukraine and targeted Russia’s access to support from third countries. The Treasury said foreign firms aiding Russia’s war economy now “face greater risk of sanctions.”

 

Wednesday’s list included a transnational network “laundering gold for a designated Russian gold producer,” it said in a statement.

 

The designated producer is Polyus, the statement said. Washington sanctioned Polyus, the largest gold miner in Russia and the world’s number four, in 2023.

 

According to the statement, a Polyus employee and his Hong Kong-based associate engaged in a scheme “whereby payments from the sale of Russian-origin gold were converted into fiat currency and cryptocurrencies through numerous UAE and Hong Kong-based front companies.”

 

The scheme, the Treasury said, used Hong Kong-based firms Holden International Trading Limited and Taube Precious HK Limited to route payments and UAE-based Red Coast Metals Trading DMCC to obfuscate payments from the sale of Russian-origin gold.

 

Additionally, the scheme involved Hong Kong-based VPower Finance Security Hong Kong Limited to transport the Russian-origin gold, it added.

 

Polyus declined to comment. VPower did not reply to a Reuters’ request for comment. Holden, Taube and Red Coast could not be reached for comment.

 

Russia is the world’s second-largest gold miner after China.

 

It produced 321.8 tonnes in 2023, or 8.8 per cent of global output from mines, according to consultancy Metals Focus.

 

Moscow stopped disclosing its export and import data in detail shortly after it attacked Ukraine in 2022, but part of its supplies is still visible through the mirror data of countries’ buying Russian products.

 

According to data provider Trade Data Monitor (TDM), Hong Kong was the largest importer of gold from Russia as of 2023.

The data does not track the UAE’s gold imports from Russia.

First Published: Jun 13 2024 | 10:48 AM IST