Socialist dictator Nicolas Maduro has reportedly been able to retain power amid Venezuela’s economic and humanitarian disaster and popular opposition in part by selling off the nation’s gold reserves via a secretive operation in Uganda.
In March, at least 7.4 tons of gold with a market value over $300 million was moved on two Russian charter jets from Caracas to a refinery in Entebbe, according to officials in Venezuela and Uganda, the Wall Street Journal reported on June 18.
A person familiar with the Venezuelan central bank’s reserves said the gold bars almost certainly were given to Venezuela by the United States in the 1940s as payment to Venezuela for oil supplied during World War II.
A foreign diplomat and Venezuelan opposition lawmakers concluded that Maduro’s government exported the ingots, the report said.
“It’s a fire sale,” said, Ángel Alvarado, who is on Venezuela’s finance commission. “The regime is scraping the barrel, selling off anything of value to keep itself afloat.”
The gold arrived at the international airport in Entebbe, Ugandan national-police spokesman Fred Enanga said. It passed through African Gold Refinery Ltd., or AGR, in a compound about 500 yards from the old runway before being exported to the Middle East.
The accompanying paperwork identified the ingots, some with stamped labels partially scratched off, as Venezuelan central-bank property, says a senior Ugandan police officer who saw the bars and documents. Flight records show the trips originated in Caracas.
On March 2, the red-tailed body of a Boeing 777 owned by a Russian charter company, Nordwind Airlines, touched down at Entebbe at 6:35 a.m. after taking off more than 13 hours earlier from Caracas, plane-tracking website Flightradar24 shows.
Police and private security gathered on the tarmac to receive the cargo from the jetliner, which carried no passengers, a person who witnessed its arrival told the Journal.
Airport handlers removed heavy parcels wrapped in brown cardboard, which didn’t pass through the airport’s regular customs procedures, says Enanga, the Ugandan police spokesman. Less than an hour after landing, the packages under a private-security escort reached the AGR compound just across the airport access road, he says.
Inside the cardboard were 3.8 tons of Venezuelan gold. Another 3.6 tons on the same airliner from Caracas arrived at the refinery two days later, Enanga says. By the time the police’s minerals unit, tipped off over the unusually large consignments, raided AGR on March 7, the first lot was gone, exported to the Middle East with its final destination listed as Turkey, he says.
AGR was founded in 2014 by Alain Goetz, a Belgian businessman who has worked more than three decades in the African gold trade.
The senior Ugandan police officer and Goetz say the gold was sent to Goetz Gold in Dubai. Goetz says Goetz Gold didn’t send it to Turkey.
Ugandan police seized the other 3.6 tons, ingots stamped with labels identifying them as Venezuelan central-bank property, says the senior officer who saw them. Some labels appeared scratched, as if someone had tried to disguise their origin, the officer says. Paperwork with the bars showed they were from the 1940s.
The shipments expose a link in a “global underground economy” which bypasses the U.S.-dominated international finance system, the report said.
The AGR refinery started operations in 2015. Some of the gold it processed was allegedly smuggled from conflict-torn eastern Congo and other African nations, according to officials with Ugandan police, the country’s Financial Intelligence Authority and regional smugglers.
The Journal noted that gold from AGR has made its way into supply chains at U.S. companies including General Motors Co. , General Electric Co. and Starbucks Corp. , the firms’ filings for 2018 with the Securities and Exchange Commission show, despite U.S. measures to discourage use of so-called conflict minerals from Congo.
GM prohibits suppliers from using forced or involuntary labor or engage in corrupt business practices, a spokesman says. GE declined to comment. Starbucks didn’t respond to requests for comment.
AGR General Manager Cherry Anne Dacdac says the company hasn’t processed smuggled or conflict gold and declines to comment on the March shipments. She says all AGR’s business is legal and that in a March 26 management meeting it agreed it won’t accept transactions related to Venezuela.
The refinery appears to act with support from Ugandan President Yoweri Museveni, court and other documents reviewed by the Journal suggest. A spokesman for Museveni says the president “backs the plant just as he does all other investors” in his quest to transform Uganda’s economy.
The Maduro government’s prior gold sales have been an open point of contention. Between late 2017 and Feb. 1, 2019, the central bank sold at least 73.3 tons of gold, with a market value of around $3 billion, to companies in the United Arab Emirates and Turkey, the National Assembly’s finance commission announced in February.
The White House on Nov. 1 announced sanctions intended to stop Venezuelan gold sales. Since then, several dozen more tons have been removed from the central bank and secretly exported, say opposition lawmakers and a person familiar with the bank’s reserves.
A U.S. Treasury Department official says: “Treasury is committed to holding accountable those operating corruptly in Venezuela’s gold sector.”
Even before the Venezuelan shipments, the Journal noted that AGR had drawn the scrutiny of Ugandan authorities for processing gold allegedly smuggled from conflict zones in Congo, as well as from South Sudan and Zimbabwe, much of which later leaves the country as Ugandan gold, according to Ugandan police, the country’s Financial Intelligence Authority, regional smugglers and Congolese mining officials.
Sydney Asubo, executive director of the Financial Intelligence Authority, Uganda’s government body in charge of combating money laundering, says the agency reported the smuggling activities to authorities and requested prosecution. No charges have been filed, he says, pending the conclusion of an investigation of AGR by Uganda’s Inspectorate of Government over suspicions of tax evasion, smuggling and money laundering. Ali Munira, a spokeswoman for the Inspectorate, which is charged with investigating corruption and other abuses, confirms there is an investigation but declined to comment on details.
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