The OAS warned about the increase in illegal gold trade from Ecuador to China

A recent report from the Organization of American States (OAS) warns about the illegal minery and its links with international criminal organizations and the illicit financing. Among the revelations of the study is the illicit trade in gold between Ecuador and China.

According to the document, in 2019 gold mineral exports from Ecuador to China reached a value of $76.7 million. However, “Ecuadorian gold ore imports reported by China that year amounted to $339.2 million”.

Another of the anomalies reported by the OAS is based on the growth of gold exports between 2015 and 2019. According to the report, in Ecuador registered an increase of 27%, which compared to the region, and to mining exporting countries in Latin America, is strange.: “In 2019, Ecuador exported almost four times as much gold as Colombia and Peru combined. The vast majority of these exports went to China, which received more than 99% of Ecuador’s gold ore exports in 2019.”

This type of irregularities would demonstrate that in Ecuador there are new mechanisms for the illicit gold trade: “Several factors have facilitated the growth of the illicit gold trade in Ecuador, among them the high degree of informality and povertythe presence of deposits in remote places and the existence of networks dedicated to illegal extraction in the neighboring countries of Colombia Y Peru. Corrupt public officials, especially at the local level, and insufficient government presence in mining areas also contribute to illicit gold extraction.

The report points out that corruption is one of the main factors that allows the proliferation of illegal gold trading and illegal mining. According to the OAS: “Corruption is a major obstacle, particularly when local and national public officials are involved who oversee the control of illegal mining and grant mining concessionsbecause it allows illegal miners, money laundering companies derived from the illicit gold trade, and others to defraud the Ecuadorian government and evade regulatory controls.”

Poverty, migration, insufficient human, economic and technical resources also influence this illegal trade.

Ecuador would also be an attractive country for committing illegal activities for its currency. The OAS report warns that authorities have determined that Ecuador’s dollarized economy is likely to be a “determinant of illicit financial flows linked to the illicit gold trade and other illegal activities.”

Among the conclusions of the report, it is determined that “the illicit gold trade is developing rapidly in Ecuador.” Furthermore, there are suspicions that in the country a robust illicit infrastructure is being formedThis is because there are legal companies, such as local gold processors and dealers, that are expanding their operations and becoming involved in the illicit gold trade. Added to this is the fact that “national criminal gangs are growing and increasingly specializing in illegal mining.”

The report points out that illegal miners have increasingly close ties to organized crime and warns of a growing presence of foreign miners from countries such as Brazil, Venezuela and Peru.

The main suggestion contained in the OAS study is the need for more public resources to be allocated to customs supervision and control entities in order to control non-financial companies linked to the gold sector. In addition, “the government should expand its presence in remote mining areas and municipalities where illegal gold is processed and traded, as well as at border crossings close to illegal mining hotspots to combat international smuggling of minerals and supplies.”

Finally, the report suggests that authorities take a more comprehensive approach in investigating this illicit trade to find the financiers, money launderers, exporters and dealers of illicit gold.

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