A report by United Nations team of experts on Democratic Republic of the Congo between September and October 2018, has named a Ugandan company in illegal gold trade from the neighbouring country.
Several sources, including mining officials, researchers and Kampala-based gold traders, told the Group that Kampala was a recipient of smuggled gold from the Democratic Republic of the Congo.
In addition, the Group found that Ugandan authorities lacked a coherent policy to combat smuggling.
The Group also found that Kampala-based gold exporters did not have an efficient system to avoid the contamination of their supply chains with illegally traded gold from the Democratic Republic of the Congo.
Main gold exporters
The Group confirmed that, in addition to African Gold Refinery Ltd. (AGR), a new refinery, Bullion Refinery Ltd., currently processes and exports gold from Uganda to Dubai.
Documents obtained by the Group showed, for example, a significant volume exported by Bullion Refinery Ltd. in October 2018.
In September 2018, three sources familiar with Ugandan gold production and export told the Group that the domestic production was low compared to the volume of exports.
Publicly available reports also mentioned another refinery, Simba, but the Group could not confirm the information and the authorities of Uganda did not respond to the Group’s request for information.
The sources added that most of the gold exported from Uganda was sourced from the Democratic Republic of the Congo, as well as from the United Republic of Tanzania, Mali, Burundi and Kenya.
The Group requested the names of suppliers from AGR and Bullion Refinery Ltd. in order to verify whether the suppliers were involved directly or indirectly in any sanctionable acts in the Democratic Republic of the Congo.
While Bullion Refinery Ltd. did not respond to the request, AGR sent two letters to the Group. In the letters, the company reiterated its previously expressed willingness to seek the “proper consent” of the suppliers before providing the information to the Group.
In the same letters, AGR reiterated that it did not source any undocumented gold from the Democratic Republic of the Congo. AGR also stated that Alphonse Katarebe would succeed Alain Goetz as Chief Executive Officer of the company.
The Group notes with concern the lack of cooperation from the two companies and believes that such a lack impedes its ability to conduct a comprehensive analysis on the compliance by the two companies with the Group’s guidelines on due diligence.
The Group requested the information on suppliers from the authorities of Uganda and is expecting a response.
Two independent sources associated with AGR and Bullion Refinery Ltd. told the Group that the companies were reluctant to disclose the names of their suppliers because they were aware that their activities were not always legal.
In fact, documents concerning a supplier for AGR obtained by the Group show the risk of contamination of the supply chain with gold illegally sourced or traded from the Democratic Republic of the Congo.
The supplier, a Congolese national based in Bukavu who provided AGR, in October 2018, with gold worth more than $3 million, travelled with an official document, delivered five months earlier, identifying his occupation as that of an electrician.
The supplier declared to AGR that the gold was sourced from the United Republic of Tanzania. Initial investigations conducted by the Group suggested that the individual was used as a broker by many Bukavu-based gold smugglers.
AGR did not respond to the Group’s inquiry as to whether it had a policy to verify the accuracy of statements made by Congolese nationals who claim that the gold they sell was not sourced from the Democratic Republic of the Congo.
The Group also confirmed that a major supplier for Bullion Refinery Ltd. is a Congolese trader based in Ariwara in the Ituri Province. Initial investigations conducted by the Group show that the individual is not officially eligible for the gold trade inside or outside the Democratic Republic of the Congo.
Role of the authorities
The Group noted that, in Uganda, the International Conference on the Great Lakes Region certificate is not yet compulsory.
The Group spoke with two Kampala based gold exporters who explained that this was the reason they did not request those certificates from suppliers from the Democratic Republic of the Congo.
The Security Council Committee established pursuant to resolution 1533 (2004) concerning the Democratic Republic of the Congo designates for sanction, inter alia, individuals or entities that illegally support armed groups and criminal networks through the illicit trade of natural resources, including gold.
As of the time of writing, only two countries of the International Conference on the Great Lakes Region (the Democratic Republic of the Congo and Rwanda) require the certificates.
The Group also noted that the authorities of Uganda have failed to share the results of their investigations into Kampala-based gold traders.
On 1 November 2018, the Group sent a request for information to the Government of Uganda. On 8 November, in a response to the Group, the authorities of Uganda told the Group that, while they were willing to cooperate and work closely with the Group, they had concerns about the short notice of one week to provide the information.
The Group extended the deadline for one more week and did not receive a response. The Group will consider the response from the Government of Uganda once it is received.