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Lawmakers and witnesses push U.S. action on illicit gold trade, sanctions and banking ties to African conflicts
Summary
At a House subcommittee hearing, experts described how illicit gold flows — including purchases by UAE refiners and record Chinese buying — channel revenue to armed actors in Sudan and the DRC and urged an interagency illicit-gold task force, stronger FinCEN/OFAC engagement and improved monitoring of global gold trading centers.
Experts at a House Foreign Affairs subcommittee hearing urged U.S. enforcement and industry coordination to disrupt illicit gold flows that they said finance armed groups in Sudan, the Democratic Republic of Congo and elsewhere.
Sasha Lehi Lesdev described large-scale smuggling and refiners that buy conflict gold and move it through global trading centers. "We need a much better system to independently monitor global gold trading centers," he said, noting past U.S. and EU actions and urging a dedicated U.S. task force and banking alerts to trace flows.
Why it matters: Witnesses told lawmakers that unmonitored gold purchases and two-year delays in trade data mean sanctions bodies and banks lag behind traffickers. They singled out UAE refiners and cash-for-gold markets as critical choke points where illicit gold can be laundered and exported to Asia and the Middle East.
Key evidence and recommendations
- Scale of illicit trade: Witness testimony and members cited figures including a 2022 estimate that over $30 billion in gold was smuggled from Africa to the UAE, and reporting that UAE buyers purchased gold from the Rapid Support Forces (RSF) in Sudan.
- Multilateral enforcement and industry monitoring: Lesdev recommended an illicit-gold task force and independent monitoring teams similar to the Kimberly Process for diamonds. "The initiative should both increase gold trade data transparency and empower independent monitoring teams to inspect and certify gold smuggling hubs such as cash-for-gold markets," he said.
- Banking and sanctions tools: Thierry Dangala urged use of OFAC licensing to create a data stream from responsible traders to U.S. authorities and called on FinCEN to issue alerts to banks. Several witnesses argued that enhanced due diligence by banks and coordination with industry-led integrity initiatives (for example, a proposed gold bar integrity initiative) could close laundering channels.
- Central banks and sovereign buyers: Members and witnesses raised concern that central-bank gold purchasing programs in Ghana, Tanzania, Uganda, Ethiopia and Zimbabwe can mask illicit origins because central banks enjoy sovereign immunity. Witnesses urged regulators and partner governments to require traceability and to build certification into any central-bank buying programs.
What was not decided
No formal enforcement actions, sanctions or new interagency structures were created at the hearing. Lawmakers requested further briefings and indicated potential legislative or oversight follow-up.
Ending
Witnesses recommended an interagency U.S. illicit-gold task force, closer bank-industry coordination and stronger, timely trade reporting. Members signaled bipartisan interest in follow-up oversight and possible legislative steps to strengthen sanctions and monitoring of global gold trading centers.
