US sanctions Hong Kong, Emirati firms over Russian gold deals
LONDON (Reuters) – The United States on Wednesday slapped sanctions on several Hong Kong firms, including VPower Finance Security, for helping to trade gold produced by an already sanctioned Russian mining company, the Treasury Department said.
In the new sanctions list, Washington sought to increase pressure on Moscow over its war in Ukraine and targeted Russia’s access to third-party support. The Treasury Department said foreign firms aiding Russia’s war effort now “face greater risk of sanctions.”
The list, published on Wednesday, included a multinational network “laundering gold for a designated Russian gold miner,” it said in a statement.
The producer was Polyus Gold, the statement said. In 2023, Washington imposed sanctions on Polyus, the largest gold miner in Russia and the fourth largest in the world.
According to the statement, a Polyus employee and his Hong Kong partner were involved in a scheme “whereby payments from the sale of Russian-origin gold were converted into fiat currency and cryptocurrencies through multiple shell companies in the UAE and Hong Kong.”
According to the Treasury, the scheme used Hong Kong firms Holden International Trading Limited and Taube Precious HK Limited to route payments, and UAE-based Red Coast Metals Trading DMCC to conceal payments from the sale of Russian-origin gold.
The scheme also involved Hong Kong-based VPower Finance Security Hong Kong Limited, which was involved in transporting Russian-origin gold.
The industry body, the London Bullion Market Association (LBMA), said it had revoked VPower Finance Security’s membership of the LBMA with immediate effect.
Russia is the world’s second-largest gold producer after China. It produced 321.8 metric tons, or 8.8% of global mine output, in 2023, according to consultancy Metals Focus.
Moscow stopped disclosing detailed export and import data in 2022, but some of its shipments are still visible through data on countries buying Russian products.
Hong Kong was the largest importer of gold from Russia as of 2023, according to data provider Trade Data Monitor (TDM). The data does not track gold imports to the UAE from Russia.