The U.S. Treasury Department has imposed sanctions on Uganda’s largest gold refiner, its owner and a network of companies for smuggling millions of dollars worth of gold each year from the conflict-stricken Democratic Republic of the Congo.
The sanctions, announced late Thursday, are Washington’s first major punitive action against African Gold Refinery (AGR) and its Belgian founder Alain Goetz. It is the latest move to cut off a key source of funding for dozens of armed groups that operate in Congo’s mineral-rich but lawless gold heartlands.
“Conflict gold provides the largest source of revenue to armed groups in eastern DRC where they control mines and exploit miners,” said Brian E. Nelson, the Under Secretary of the Treasury for Terrorism and Financial Intelligence. “Alain Goetz and his network have contributed to armed conflict by receiving DRC gold without questioning its origin.”
AGR couldn’t be immediately reached for comment. The company has previously denied processing smuggled or conflict gold.
Mr. Goetz operates the refinery, which started operations in Uganda in 2015, as well as several companies in the United Arab Emirates that receive illicit gold from rebel-controlled mines in Congo, the Treasury said.
Gold from AGR has made its way into supply chains at U.S. companies including General Motors Co., General Electric Co. and Starbucks Corp., the firms’ filings for 2018 with the Securities and Exchange Commission show, despite U.S. measures to discourage use of conflict minerals from Congo.
The Treasury said that following the sanctions, all property and interests in property owned by Mr. Goetz, AGR and its affiliates have been frozen.
“The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior,” the Treasury said.