Case Studies

The United States (US) sanctioned international mining magnate Dan Gertler for amassing a billion-dollar fortune through opaque and corrupt mining deals in the Democratic Republic of the Congo (DRC). In 2017, Gertler was sanctioned for allegedly using his close friendship with then President Joseph Kabila to act as an intermediary for mining asset sales in the DRC, which created a system where multinational companies had to go through Gertler to do business with the Congolese state. According to the US, the DRC reportedly lost over $1 billion in just two years due to Gertler’s corrupt deals. Despite being sanctioned by the US, Gertler was able to continue operating in the DRC’s mining sector through an international money laundering network that spanned from the DRC to Europe and Israel. In one instance, Gertler acquired new mining permits through proxy companies in the lead up to the 2018 Congelese elections. Moreover, as of 2022, Gertler was still reportedly earning millions of dollars from copper-cobalt mining interests in the DRC despite US sanctions.  

Keywords: Sub-Saharan Africa, Democratic Republic of the Congo, minerals, cobalt, copper, corruption and bribery, sanctions evasion, money laundering

Source: https://home.treasury.gov/news/press-releases/sm0243  

According to AML Intelligence, U.S. government officials have issued several warnings to Exxon Mobil, urging them to avoid business dealings with Nazar Mohamed and his son, Azruddin, two prominent figures in the Guyanese mining industry. The Mohameds are suspected of money laundering, drug trafficking, and gold smuggling. Indeed, the Mohameds are under investigation by the DEA, FBI, and Homeland Security for allegedly smuggling Colombian cocaine and Venezuelan gold, and laundering money for drug traffickers, including sanctioned Russian nationals. Reports indicate that such illegal gold trafficking funds armed conflicts and supports criminal networks. Despite these allegations, the Mohameds assert that their trade relations with American companies are legitimate. U.S. authorities have warned Exxon of such suspicions, yet AML Intelligence reports that Exxon Mobil has proceeded with a $300 million deal to build an onshore logistics base with the Mohameds in April 2022. In response, the U.S. authorities are considering sanctions against the Mohameds, which could force Exxon to sever ties with them. 

Keywords: Latin America, Guyana, mining, gold, money laundering, drug trafficking, gold trafficking, smuggling, serious organised crime, terrorist and coflict financing, sanctions evasion

Sources:  https://www.amlintelligence.com/2023/07/special-report-exxon-mobil-repeatedly-warned-not-to-do-business-with-mining-magnates-suspected-of-money-laundering/ 

In the Central African Republic (CAR), Russia’s involvement in the mining sector is a key strategy maintained to evade sanctions, allowing both economic and geopolitical advancement. The Wagner Group, a paramilitary organisation with close ties to the Kremlin, plays a crucial role in this process. By securing profitable mining contracts, notably in the gold and diamond industry, Wagner circumvents Western financial sanctions imposed due to Russia’s internationally condemned military actions in Ukraine. In the CAR, Wagner’s operations go beyond traditional economic interests, with security concerns also being prominent. Companies such as Finans M and Lobaye Invest, reportedly controlled by Wagner's leader, exploit mineral resources in the Central African Republic (CAR) under the guise of economic activity, reinforcing Russia’s geopolitical presence. These entities facilitate the trade of precious minerals outside the formal banking system, enabling Russia to bypass sanctions. This strategy allows Russia to leverage CAR's rich minerals to sustain its economy and finance military activities in Ukraine. It is also crucial to note that Russian mining activity in the CAR is causing environmental damage, including land degradation, deforestation, and water pollution, due to a lack of regulation. If Russia's involvement in CAR succeeds, similar unregulated mining projects could spread throughout the sub-Saharan region, increasing environmental harm. 

Keywords: Sub-Saharan Africa, Central African Republic, minerals, gold, diamond, illegal mining, sanctions evasion, terrorist and conflict financing, deforestation

Source:  https://ecomnewsafrique.com/en/2023/05/12/africa-russias-growing-involvement-in-the-african-mining-sector-is-an-important-instrument-of-geopolitical-influence-and-a-means-to-circumvent-western-economic-and-financial-sanctions/ 

https://www.tearline.mil/public_page/car-mines