The United States has announced sanctions targeting several firms in Hong Kong, including VPower Finance Security, for their involvement in the transportation of gold produced by a sanctioned Russian mining company, according to a statement from the US Department of the Treasury on Wednesday.
This latest round of sanctions is part of Washington’s ongoing efforts to increase pressure on Moscow in response to its war against Ukraine. The Treasury Department emphasized that foreign companies supporting Russia’s war economy now “face greater risk of sanctions.”
The sanctions list revealed a transnational network accused of “laundering gold for a designated Russian gold producer.” The identified producer is Polyus, Russia’s largest gold miner and the fourth largest globally, which was sanctioned by the US in 2023.
According to the Treasury, a Polyus employee, along with an associate based in Hong Kong, orchestrated a scheme in which payments from the sale of Russian-origin gold were converted into fiat currency and cryptocurrencies through various front companies based in the UAE and Hong Kong.
The operation allegedly involved Hong Kong firms Holden International Trading Limited and Taube Precious HK Limited to process payments and UAE-based Red Coast Metals Trading DMCC to obscure the financial transactions. Additionally, Hong Kong’s VPower Finance Security Hong Kong Limited was implicated in transporting the Russian-origin gold.
Polyus has declined to comment on the matter. VPower did not respond to Reuters’ request for comments, and attempts to reach Holden, Taube, and Red Coast for comments were unsuccessful.
Russia ranks as the world’s second-largest gold producer after China, with an output of 321.8 tonnes in 2023, accounting for 8.8% of global mine production, according to consultancy Metals Focus.
Since its invasion of Ukraine in 2022, Moscow has ceased detailed disclosure of its export and import data, although some of its trade remains traceable through the import records of countries purchasing Russian products.
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