Global Network Involved in Illicit Gold Trade Sanctioned

U.S. government encourages the private sector to adopt supply chain due diligence procedures to disrupt illicit mineral trade 

By Alexis Nicholson

March 24, 2022

Last week, the U.S. Department of the Treasury announced sanctions against Belgian businessman Alain Goetz, the African Gold Refinery in Uganda, and a network of companies involved in the illicit trade of gold from the Democratic Republic of the Congo (DRC). Goetz operates gold refineries and trading companies in Uganda, the DRC, Belgium, the United Arab Emirates, and elsewhere that received gold from mines controlled by armed groups implicated in human rights violations. Read the full U.S. designation statement

  • Alain Goetz was convicted in Belgium in 2020 alongside his brother and business partner, Sylvain Goetz, for money laundering and tax fraud in connection to gold trade through their Tony Goetz NV refinery, at the time in Antwerp, Belgium. Their sentences and fine were suspended, and both brothers denied involvement in the illegal trade of precious metals. 

  • A 2018 report by The Sentry noted Tony Goetz NV and the Goetz family’s involvement in illegal mining operations in the DRC and Uganda, from which gold entered the global supply chains of major companies. 

  • Tony Goetz NV has been nonoperational since July 2020, but rebranded to Industrial Refining Company, according to corporate records reviewed by Kharon. The company was not among the entities sanctioned by name in the U.S. government’s recent designation of Alain Goetz and his business network. 

Expanded Risk In Focus: The Goetz gold network’s global reach extends beyond those named by the U.S. government, with ownership of other offshore and trading companies in Europe, Africa, and the Middle East. 

  • Industrial Refining Company, formerly known as Tony Goetz NV, is wholly owned by a Luxembourg-based holding company, which is beneficially owned by Sylvain and Axel Goetz, two relatives of Alain Goetz. 

  • Alain Goetz owns a minority stake of a Dubai-based general trading company, which is registered to the same address as the U.S.-sanctioned Goetz Gold LLC.  

Alain Goetz controls Aldango Ltd, a gold refinery in Rwanda, through a UAE-based firm. Aldango has shipped millions of dollars in gold to customers around the world, according to trade records. In January 2021, the Rwanda Investigation Bureau suspended the refinery’s license accusing it of tax evasion, according to Aldango’s website and media reporting.

Why This Matters: The recent designation of the Goetz gold trading network demonstrates the U.S. government’s “commitment to disrupt the illicit mineral trade and encourage mining sector transparency,” Treasury said. The U.S. also noted the importance for the private sector to adopt enhanced supply chain due diligence procedures in mineral supply chains as “a key tool” to mitigate risks from U.S. and international sanctions. 

“Treasury has been very clear: global gold markets, at every step of the supply chain, must engage in responsible sourcing and conduct supply-chain due diligence.” 

Brian E. Nelson, U.S. Under Secretary of the Treasury for Terrorism and Financial Intelligence

  • The U.S., European Union, and other governments have issued guidance and advisories on the need for private industry to assess supply chain exposure risks when it comes to mitigating human rights, forced labor, and other Environmental, Social and Governance (ESG) concerns. This guidance has urged businesses to implement due diligence procedures in their supply chain management when dealing with conflict minerals from conflict-affected and high-risk areas, and when engaging in business partnerships with, investing in or providing other support to companies linked to human rights violations, including forced labor.  

  • Organizations undertaking due diligence practices should ensure that their compliance practices are commensurate with identified risks and international best practices across the upstream and downstream supply chain. 
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