Gold trade draws scrutiny as refineries boost due diligence

GI-TOC finds illicit gold laundered through global supply chains

According to the Global Initiative Against Transnational Organized Crime (GI-TOC), illegally mined gold is being laundered through global supply chains and blended into legal flows as it passes through traders, exporters and international hubs. A review of recent institutional materials indicates that weak verification at key transit points allows origin to be obscured, enabling illicit gold supply chains to interface with formal markets.

The report’s framing assumes clear distinctions: illegal mining violates national law, while informal operations may lack permits or registration; artisanal and small-scale gold mining (ASGM) refers to small, often community-based extraction, distinct from industrial mining. These definitions matter for compliance because they trigger different obligations for traders, refiners and importers under risk-based due diligence regimes.

Immediate implications: environmental and human-rights harms

According to Greenpeace, illegal gold mining has destroyed over 4,000 hectares of Amazon rainforest across four Indigenous territories in the past two years, with knock-on effects for biodiversity, river systems and land rights (greenpeace.org). The group links upstream damage to opaque downstream trading that allows unverified metal to enter consumer markets.

As reported by the United Nations Office on Drugs and Crime (UNODC), criminal organizations are increasingly embedded in gold supply chains, attracted by high profits from rising demand; the agency identifies foreign refineries in Europe, Asia and North America as strategic nodes where tighter controls could curb laundering (ungeneva.org). The same analysis ties illicit operations to deforestation, pollution and heightened risks for communities living near mining frontiers.

Civil society advocates connect these harms to weak transparency and importer accountability. “Foreign demand for gold fuels deforestation, poisoning of rivers and biodiversity, and undermines the rights and safety of Indigenous communities,” said Jorge Eduardo Dantas, Indigenous Peoples’ Campaign Lead at Greenpeace Brazil.

How illicit gold moves from mines to refineries

In practice, flows often begin in artisanal and small-scale gold mining (ASGM) zones, where output is purchased by local aggregators and brokers before crossing borders. Along the way, material can be co-mingled with declared shipments or accompanied by falsified paperwork, eventually reaching trading hubs and international refineries where insufficient verification enables re-labelling and re-entry into legal channels.

Based on data from the World Gold Council, ASGM accounts for about 20% of annual gold supply yet roughly 80% of global gold mining employment, highlighting why any credible response must engage this segment (gold.org). The scale also explains why transparency at chokepoints, traders, exporters and refineries, has outsized impact on the integrity of downstream markets.

Effective responses now center on gold supply chain due diligence: applying the OECD Due Diligence Guidance, aligning practices with the Minamata Convention on Mercury, strengthening KYC/AML controls for traders and refiners, expanding public beneficial ownership disclosures, and harmonizing customs documentation. Formalization of ASGM and importer responsibility for verifying origin could improve traceability and reduce incentives for smuggling, though outcomes will depend on enforcement capacity and cross-border cooperation.