Washington, D.C. – The U.S. Treasury Department’s Office of Foreign Assets Control has announced sanctions against four gold companies it says are linked to Russia’s Wagner Group and its leader, Yevgeny Prigozhin.
The Wagner Group is a government-backed network of mercenaries (fighters for hire) that has been heavily involved in Russia’s invasion of Ukraine, including the capture of the town of Bakhmut in eastern Ukraine.
In recent months, however, Prigozhin’s relationship with the Russian government has soured, with Prigozhin accusing the country’s military leadership of incompetence and claiming that they are withholding ammunition from his fighters.
On Saturday, the Wagner Group staged an uprising that was quickly de-escalated but has raised questions about Russian President Vladimir Putin’s ability to hold on to power.
Prigozhin and the Wagner Group are already under US sanctions.
On Tuesday, OFAC announced sanctions against four companies and one individual it says are involved in illicit gold transactions that fund the Wagner Group.
They are:
– Midas Resources SARLU, a Central African Republic-based company affiliated with Prigozhin that holds mining concessions and licences for sites where precious metals and gems are mined;
– Diamville SAU, another CAR-based company controlled by Prigozhin;
– Industrial Resources General Trading, an industrial goods distributor based in Dubai, United Arab Emirates, which is alleged to have provided financial support to Prigozhin through its dealings with Diamville;
– Limited Liability Company DM (also known as OOO DM), a Russia-based company allegedly involved in a gold sales scheme.
OFAC also sanctioned an individual, Andrey Nikolayevich Ivanov, a Russian national, who it said was an executive of the Wagner Group.
“The Wagner Group funds its brutal operations in part by exploiting natural resources in countries like the Central African Republic and Mali,” said Brian E. Nelson, the Treasury Department’s Under Secretary for Terrorism and Financial Intelligence.
“The United States will continue to target the Wagner Group’s revenue streams to degrade its expansion and violence in Africa, Ukraine, and elsewhere.”
The US Treasury announced the sanctions on the same day that a group of federal agencies, including the State Department and the Department of Homeland Security, issued a lengthy advisory on gold from sub-Saharan Africa, which Brad Brooks-Rubin of the US State Department described as “unique”.
The advisory, which can be read in full online, draws attention to the “increasingly disturbing reports” of illicit actors, such as the Wagner Group, exploiting weaknesses in the gold supply chain in sub-Saharan Africa to finance their activities.
Industry participants “should be prepared for increased U.S. government attention to the relationship between gold and these groups’ revenue streams, and should be prepared for the possibility that U.S. sanctions could be used to disrupt these groups’ operations,” the alert says.
It notes the importance of companies exercising due diligence when sourcing gold and reporting publicly on their efforts where possible.
The alert also calls on U.S. persons and entities involved in the gold trade to support responsible investment in both large-scale gold mining operations in Africa and the artisanal and small-scale gold mining (ASGM) sector, which employs an estimated 10 to 25 million people.
The advisory includes a list of three non-governmental organisations working to improve Africa’s ASGM sector and the lives of the people who depend on it.
They are: Impact (formerly Partnership Africa Canada), an NGO specialising in artisanal and small-scale mining in Africa; the Alliance for Responsible Mining, which works to improve the lives of artisanal and small-scale miners worldwide through capacity building and improved market access; and the Artisanal Gold Council, which focuses on training, education and capacity building programmes, as well as guiding sector governance.
