Deloitte: Poland enters the phase of economic expansion

The divergence of economic moods in Poland...

Two Years On: War in Ukraine and Its Global Impact

On February 24, 2022, a full-scale Russian...

Russia Uses “Cash for Gold” Scheme to Evade Sanctions: $725 Million Transferred

POLITICSRussia Uses "Cash for Gold" Scheme to Evade Sanctions: $725 Million Transferred

Russia, one of the world’s largest producers of gold, is using its resources to acquire foreign currency and circumvent the sanctions imposed on the country. According to recent findings, as part of the “cash for gold” scheme, gold worth 725 million dollars was transferred from Russia to Turkey and the United Arab Emirates.

Recently, the precious metals market has been flooded with news about how Russia is using its substantial gold reserves while burdened with various types of sanctions imposed following the aggression towards Ukraine.

– The American company Sayari, which specializes in economic intelligence, published a report showing how Russia uses gold to obtain foreign currencies, which it needs for trade, namely dollars and euros. It turns out that the Russians are buying currency for gold from Turkey, the United Arab Emirates, and also Hong Kong, thereby circumventing sanctions and obtaining any financial liquidity. According to the report, Russia last year exported gold in this way worth over 700 million dollars – explains Michał Tekliński, gold market expert,

Cash for gold

The Sayari report shows that, thanks to the process of exchanging gold for cash through countries like the UAE and Turkey, Russia is likely not going to completely fall out of the global financial market. Previously – due to imposed sanctions – its access to Western currency was blocked, and Russia also had trouble finding markets willing to accept its gold. Initially, the precious metal was the country’s second most valuable export, making Russia the sixth largest gold exporter in the world.

As calculated by the authors of the report, over 82 million dollars were sent from entities in Turkey and Dubai to the Russian banks Lanta Bank and Vitabank. Trading documentation indicates that these two financial institutions received 21 shipments of various foreign currencies in Q1 2023 from four trading partners. These were primarily US dollars and euros, as well as United Arab Emirates dirhams and Chinese renminbi, in smaller quantities.

– At the same time these funds were coming into Russia, Russian gold worth about $725 million was being sent to these same entities. This procedure, as the Sayari report points out, provides direct evidence of Russia’s ongoing ability to acquire foreign currencies through gold exports – adds Michał Tekliński.

Data for Q4 2023 shows that Russia’s gold reserves are over 2,332.74 tonnes, and the country’s annual gold mining output is about 330 tonnes. This puts it in second place among the world’s largest gold producers.

New deposits in Yakutia and the Czech Republic

Recently, Russian company Alrosa, specializing in diamond mining, announced the discovery of gold deposits in Yakutia, in two underground areas: Borosku-Unguochtach and Ulahan-Chaptasynnah.

– While searching for diamonds, they found gold. It is not yet known how much exactly, but earlier estimates suggest that there is not much gold near the surface, only about one ton. However, it is very likely that there is much more gold deeper down. For now, Alrosa is not revealing precise data on this matter. However, it appears these deposits will be exploited in the near future, possibly starting in 2025 – notes the expert.

When discussing new deposits, it is also worth mentioning that in the Czech Republic, in the Sumava region, which has a historical reputation for containing gold, recent analyses have revealed deposits containing over 120 tons of pure gold.

– Apparently, three companies are quietly trying to obtain a concession for mining, but locals are objecting, not wanting large-scale extraction to begin in their beautiful region, popular with tourists. 120 tons are truly massive reserves. It will be interesting to see whether the local authorities will be able to resist the temptation to mine this precious metal from the gold-bearing areas – adds Michał Tekliński.

Check out our other content
Related Articles
The Latest Articles