Special Topics

Illicit Traffic in Precious Metals and Traceability and Ethical Origin of Coloured Gemstones

A new initiative to counter illicit traffic in Precious Metals

In its resolution 2013/38 entitled “Combating transnational organized crime and its possible links to illicit trafficking in precious metals”, the Economic and Social Council of the United Nations called upon UNICRI to conduct a comprehensive study on the possible links between transnational organized crime, other criminal activities and illicit trafficking in precious metals.

UNICRI, with the support of the government of South Africa, has launched a programme to enhance international efforts to counter the illicit trafficking of precious metals and combat its potential use as a source of funding for organized crime and terrorism.

The increasing phenomenon of illicit trafficking in precious metals represents a significant source of financing for organized criminal groups that exploit loopholes in the national and international legislation and in the precious metals trading. Precious metals represent ideal commodities for financing criminal activities given their easy transportability and high value. The development and expansion of transportation infrastructure, banking systems and telecommunication have facilitated the involvement of organized crime in this very high profitable business. The illicit proceeds deriving from this traffic allow criminal syndicates to expand their networks and activities, generating a convergence of threats to stability, economic growth and development.

The inception component of the programme entailed an assessment phase, whose main result is represented by a comprehensive study on the possible links between transnational organized crime, other criminal activities and illicit trafficking in precious metals. As emphasized in the resolution, Member States and relevant institutions have been invited to provide the Institute with examples of national, regional and international laws, regulatory standards, best practices, case studies and other materials consistent with the study, such as on money-laundering and import and export controls.

The assessment phase has also provided a platform to develop an international network of key stakeholders including States’ governmental structures (law enforcement bodies, policymakers, customs department, prosecution office and intelligence), leading companies involved in the production, processing and trade of precious metals, international organisations and other relevant actors.

During the assessment phase, UNICRI, with the involvement of key stakeholders, has designed an action plan outlining the follow-up activities to be implemented during the operational phase. Activities are meant to enhance national and international capabilities to combat international illicit trafficking.

Launch of UNICRI's Assessment report at the 25th CCPCJ

A technical Report on “Strengthening the Security and Integrity of the Precious Metals Supply Chain” has been launched by the United Nations Interregional Crime and Justice Research Institute (UNICRI) on the occasion of the Side-event that will be held on 25 May at the 25th Commission on Crime Prevention and Criminal Justice (CCPCJ).

The report, prepared by UNICRI, within the framework of its initiative to counter illicit trafficking in precious metals, assesses the vulnerabilities of the precious metals supply chain, highlighting the involvement of transnational organized crime and presenting other criminal activities associated to the illicit trafficking in precious metals.

Based on the cases analysed, the report presents the complex and interlinked levels of criminal actors; it explains the different challenges deriving from gold and platinium group mining and refining processes, and provides examples of the several crimes affecting this sector, including corruption, money laundering, drug and arms trafficking, smuggling of migrants, sexual and gender based violence and child labour.

The report also presents the different initiatives and tools in place to combat the illicit trafficking in precious metals in different countries and regions as well as the challenges they face. The strengths, weaknesses, opportunities and threats to the legal supply chain and UNICRI recommendations to develop comprehensive systems to combat trade and trafficking in precious metals were discussed during the Side-event. On that occasion, the international strategy to strengthen the security and integrity of the precious metals supply chain has been launched.

 
Executive Summary of the report: English, Arabic, Chinese, French, Spanish, Russian.

International Meeting

The International Meeting on “International strategy to combat illicit trafficking in precious metals”, organized by UNICRI with the support of the Government of South Africa, took place in Cape Town on 8-9 March 2016.

The meeting involved high-level government representatives, law enforcement agencies, IGOs, civil society representatives, experts, and the private sector (including mining, refining, distributing and manufacturing actors).

The meeting served as a platform to present the initial findings of the assessment conducted by UNICRI on the phenomenon of illicit trafficking of precious metals. It also represented the occasion to present and discuss the international strategy to prevent and combat the illicit trafficking in precious metals and its links with other criminal activities.

To access and download the presentations delivered and the minutes of the International Meeting, become a stakeholder of the Precious Metal portal!

Precious Metals Portal

The Precious Metals portal works as a platform for stakeholders involved in the precious metals sector, in particular in the fight against illicit trafficking in precious metals and related crimes. It will allow the exchange and dissemination of information, news, events and meetings related to these issues.

The portal introduces the challenges of illicit trafficking in precious metals and UNICRI’s international strategy to prevent and combat illegal mining and trafficking, associated crimes, and harmful social conditions linked to the illicit trafficking of precious metals. The portal also includes three databases on legislation, bibliography, and case studies and a directory of contacts which can be accessed and updated by registered stakeholders.

Access the portal and become a stakeholder of the programme at: https://pm.unicri.it/

Kick off Expert Meeting

Within the framework of the assessment phase, a Kick Off Expert Meeting on Illicit Trafficking of Precious Metals was held at UNICRI Headquarters from 23 to 25 September gathering relevant stakeholders from intergovernamental, governmental and non governamental entities, and the private sector.

During the meeting, participants discussed presented their different perspectives on phenomenon of illicit trafficking of precious metals and its links with other criminal activities. The event served as an opportunity to establish a consultation platform to showcase and share common trends, existing good practices, loopholes and challenges to be addressed.

Meeting participants agreed upon the methods for the collection and analysis of data and relevant information. In addition, they provided substantive inputs on the implementation of the activities envisaged in the assessment and follow-up phases.

Establishment of a  mechanism for the traceability and certification of ethical origin of the coloured gemstones.

A preliminary consultative stakeholders and expert’ meeting  on  a new project proposal aimed at the establishment of a  mechanism for the traceability and certification of ethical origin of the coloured gemstones was convened by UNICRI)in cooperation with the Vienna International Justice Institute and the International Colored Gemstone Association.

The meeting was attended by  representatives from the public and private sectors from several countries namely Austria, Belgium, Brazil, Canada, China, Colombia, France, Kenya, Mozambique, South Africa, Sri Lanka, Switzerland, Tanzania and the Russian Federation.
 
The coloured gemstones’ global industry accounts for US$ 10-12 billion per year, 80% of the coloured gemstones production comes from small scale informal mining. The supply chain from mine to market is extremely fragmented with a high degree of opacity. The high value and easy portability of the gemstones provide lucrative opportunities for illegal activities, often characterized by the involvement of organized criminal groups managing fraudulent practices.
 
This project aims at establishing an instrument in the form of certificate of origin and its corresponding tracking system for colored gemstones  based on the  improvement of environmental, social and governance (ESG) performance along the  supply and value chains, through a pragmatic approach.
It takes, as a basic assumption, that growth of the coloured gemstone industry could be positively aided by more virtuous governance practices of the stakeholders  in tackling different threats and abuses. These range from security issues to illicit trafficking, fraud, theft, money laundering, critical environment and  ecosystem impacts, unsafe and unacceptable  working conditions.

Coloured Gemstones: Establishing a mechanism for their traceability and certification of ethical origins - Download the Presentation

 

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