US sanctions Hong Kong, UAE firms for dealing with Russian gold (updated)

Vpower International Holdings

12/06/2024 18:05

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      Russia is the 2nd largest gold miner after China
    

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      Its major gold miners were sanctioned by the US in 2023
    

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      US now imposing sanctions for helping Russian gold trade
    

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      Hong-Kong based VPower Finance Security hit by new
sanctions
    

  
 (Adds comment from LBMA in paragraph 9)
    By Polina Devitt
       LONDON, June 12 (Reuters) - The United States imposed
sanctions on Wednesday on several Hong Kong firms, including
VPower Finance Security, for aiding trade in gold produced by an
already sanctioned Russian miner, the U.S. Department of the
Treasury said.
    In a new sanctions list, Washington sought to raise the
pressure on Moscow over its war against Ukraine and targeted
Russia's access to support from third countries. The Treasury
said foreign firms helping Russia's war economy now "face
greater risk of sanctions".
    Wednesday's list included a trans-national network
"laundering gold for a designated Russian gold producer", it
said in a statement.
    The producer was Polyus  PLZL.MM , the statement added.
Washington sanctioned Polyus, the largest gold miner in Russia
and the world's number four, in 2023.
    According to the statement, a Polyus employee and his Hong
Kong-based associate engaged in a scheme "whereby payments from
the sale of Russian-origin gold were converted into fiat
currency and cryptocurrencies through numerous UAE and Hong
Kong-based front companies".
    The scheme, the Treasury said, used Hong Kong-based firms
Holden International Trading Limited and Taube Precious HK
Limited to route payments and UAE-based Red Coast Metals Trading
DMCC to obfuscate payments from the sale of Russian-origin gold.
    Additionally, the scheme involved Hong Kong-based VPower
Finance Security Hong Kong Limited to transport the
Russian-origin gold, it added.
    Polyus declined to comment. VPower did not reply to a
Reuters' request for comment. Holden, Taube and Red Coast could
not be reached for comment.
    An industry body, the London Bullion Market Association
(LBMA), said in a statement that it had revoked the LBMA
membership of VPower Finance Security with immediate effect.
    Russia is the world's second-largest gold miner after China.
It produced 321.8 metric tons in 2023, or 8.8% of global output
from mines, according to consultancy Metals Focus.
    Moscow stopped disclosing its export and import data in
detail shortly after its full-scale invasion of Ukraine in 2022,
but part of its supplies is still visible through data from
countries buying Russian products.
    According to data provider Trade Data Monitor (TDM), Hong
Kong was the largest importer of gold from Russia as of 2023.
The data does not track the UAE's gold imports from Russia.

 (Reporting by Polina Devitt; Editing by Tomasz Janowski and
Mark Potter)
 ((polina.devitt@thomsonreuters.com; Reuters Messaging:
polina.devitt.thomsonreuters.com@reuters.net))