Unlike other gold producing regions around the world such as West Africa and the Great Lakes region, gold smuggling only recently became an issue in Colombia. During the 1990s and early 2000s, drug kingpins and former paramilitary commanders purchased gold in neighbouring countries with revenues from drug trafficking, smuggled it into Colombia and sold it to local traders to launder the money. This phenomen was thought to have dwindled following the dismantling of the Medellin and the Cali drug cartels in the 90s and the demobilisation of the paramilitary groups in the mid-2000s. Legal exports, however, continued to surpass reported gold production. This prompted Colombian authorities to start looking into these potential contraband flows. Although no reliable estimate exists regarding illegal gold exports, government agencies believe close to half of the total gold exported by Colombia could have been smuggled into the country from neighbouring countries.
This report examines gold exports from Colombia and gold smuggling into and out of the country. It is part of a series of assessments on Colombian gold supply chains and the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
The implementation of due diligence measures in Colombia’s gold supply chain is faced with new challenges as evidence mounts that Colombia serves as a hub for contraband gold coming from other countries
Law enforcement agents investigate international traders but cannot divulge information to potential buyers or certifiers due to the secrecy restrictions of legal proceedings
Colombian law enforcement agencies are making significant efforts to fight money laundering but too little attention is being paid to gold smuggling from Colombia.