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Business with illegal gold - Swiss refinery under suspicion

Business with illegal gold - Swiss refinery Metalor under suspicion

Research by the Society for Threatened Peoples Switzerland (GfbV) corroborates the suspicion that illegally extracted gold has reached Switzerland. The focus of the report published today by the GfbV “Business with illegal gold - Swiss Metalor refinery under suspicion” is the Swiss Metalor refinery based in Neuchâtel. The GfbV examined the path of gold from Peru to Switzerland and found that the refineries are not careful when it comes to buying gold. Both the PAMP gold refinery from Ticino and Metalor have processed illegal gold from Peru in the past. Documents accessible to the GfbV suggest that Metalor is still most likely sourcing illegal gold from Peru today. The refinery, however, denies getting gold from the controversial Madre de Dios region.

Peru is a country rich in natural resources and one of the largest gold producers in the world. Over the past decade, the rapid growth in raw material extraction and the rise in gold prices have boosted the gold trade in Peru. Organized criminal structures control the illegal gold trade, which goes hand in hand with a number of other crimes such as money laundering, forced labor, tax evasion and human trafficking.

Metalor suspected of sourcing gold from dubious sources

From 2008 onwards, various measures and new laws will be implemented against the rampant illegal gold trade. At the end of February 2012, the President signed a new ordinance that criminalizes all illegal extraction of raw materials and their financing, including the purchase of gold from illegal sources. The Peruvian authorities are beginning to seize gold shipments and investigate dubious companies on suspicion of tax evasion and money laundering. One of the customers of the gold is the Swiss refinery Metalor.

Ongoing proceedings against Metalor suppliers

Among other things, it is determined against three Peruvian companies from which Metalor still purchases gold today. The export company Minerales del Sur, for example, exports significantly more gold to Metalor than the region from which the gold originates officially produces. In addition, their exports increased after other firms ceased operations on suspicion of trading illegal gold.

One of the most recent cases with consequences for Metalor concerns the confiscation of allegedly illegal gold by the company Famyr Group EIRL in January 2014, also a supplier to Metalor. Since the case reached the Peruvian media, Metalor submitted a suspicious transaction report to the Swiss Money Laundering Reporting Office in April 2014. The proceedings are currently at the Swiss Federal Prosecutor's Office. The Peruvian public prosecutor for money laundering will also apply to the Swiss authorities for legal assistance in connection with the confiscated gold. Among other things, she hopes to get information on the transfers in the millions that were made for the purchase of the gold to the dubious companies.

Refiners and states have a duty

In view of the facts resulting from the report, the STP demands that the refineries carry out a rigorous due diligence check on all their gold suppliers in order to guarantee that no more illegally extracted gold reaches Switzerland. The results of this due diligence and information on the gold suppliers must be made available. The STP is demanding that Switzerland introduce a mandatory due diligence and other measures in line with the corporate responsibility initiative, effective regulations against the import of illegal gold and a strong commitment to humane and ecologically compatible gold production. The STP calls on the Peruvian state to put human rights above economic interests and to give gold panners who want to meet the requirements access to a simplified formalization process, or to offer them alternative ways of making a living.