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UN Report Pins Entebbe-based African Gold Refinery in Gold Smuggling

A United Nations report has pinned Ugandan gold companies, African Gold Refinery Ltd (AGR) and Bullion Refinery Ltd, of benefiting from gold smuggled from the volatile Eastern Republic of Congo, Chimp Corps report.

The serious accusations against AGR come against the backdrop of the resignation of businessmen Barnabus Taremwa and Richard Kaijuka from the gold refining company based in Entebbe.

The two businessmen left the company which they cofounded with outgoing Chief Executive Officer Alain Goetz after the latter fell short of putting in place mechanisms of identifying gold smuggled into the country.

Now the Group of Experts on the Democratic Republic of the Congo who report to the United Nations Security Council say the activities of AGR could attract sanctions.

“Two independent sources associated with AGR and Bullion Refinery Ltd. told the Group that the companies were reluctant to disclose the names of their suppliers because they were aware that their activities were not always legal,” the report to the Security Council reads in part.

“In fact, documents concerning a supplier for AGR obtained by the Group show the risk of contamination of the supply chain with gold illegally sourced or traded from the Democratic Republic of the Congo.”

According to the investigation, the supplier, a Congolese national based in Bukavu who provided AGR, in October 2018, with gold worth more than $3 million, travelled with an official document, delivered five months earlier, identifying his occupation as that of an electrician.

The supplier declared to AGR that the gold was sourced from Tanzania.

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Initial investigations conducted by the Group suggested that the individual was used as a broker by many Bukavu-based gold smugglers.

AGR did not respond to the Group’s inquiry as to whether it had a policy to verify the accuracy of statements made by Congolese nationals who claim that the gold they sell was not sourced from the Democratic Republic of the Congo.

Highly placed sources told ChimpReports that AGR continues to receive gold from people of all walks of life without determining the source hence being a safe conduit of smuggled gold.

Usually, gold dealers carry licenses showing the source of the gold especially mines and also authorization of the dealerships.

“There is no evidence to suggest that AGR imports gold through proper custom channels,” reads a government briefing on the operations of the old company.

Sanctions

The findings of the UN experts could lead to Uganda facing sanctions for hosting a facility that exports gold obtained from conflict areas.

UN investigators said they requested the names of suppliers from AGR and Bullion Refinery Ltd. in order to verify whether the suppliers were involved directly or indirectly in any sanctionable acts in DRC.

In the letters, AGR reiterated its previously expressed willingness to seek the “proper consent” of the suppliers before providing the information to the Group and reiterated that it did not source any “undocumented gold” from DRC.

AGR also stated that Alphonse Katarebe would succeed Alain Goetz as CEO.

But insiders told this investigative website that Alphonse, as he is fondly known, was a mere proxy of Goetz.

“Goetz’s alleged departure is just a smokescreen because Alphonse acts on his orders,” said the source.

In the report to the Security Council , experts noted “with concern the lack of cooperation from the two companies and believes that such a lack impedes its ability to conduct a comprehensive analysis on the compliance by the two companies with the Group’s guidelines on due diligence.”

Several sources, including mining officials, researchers and Kampala -based gold traders, told investigators that Kampala was a recipient of smuggled gold from DRC.

In addition, the Group found that Ugandan authorities lacked a coherent policy to combat smuggling.

The Group also found that Kampala-based gold exporters did not have an efficient system to avoid the contamination of their supply chains with illegally traded gold from the Democratic Republic of the Congo.

It also was observed that in Uganda, the International Conference on the Great Lakes Region certificate is not yet compulsory, explaining the reason they did not request those certificates from suppliers from DRC.

UN experts also noted that the authorities of Uganda have failed to share the results of their investigations into Kampala-based gold traders.

On 1 November 2018, the Group sent a request for information to the Government of Uganda to which it responded that while they were willing to cooperate and work closely with the Group, they had concerns about the short notice of one week to provide the information.

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