Financial Crime World

Financial Crime Case Studies in Mongolia Expose Illicit Flows in Artisanal Gold Mining Sector

Introduction

A recent report by The GIFF Project, Levin Sources, and the Global Initiative against Transnational Organized Crime has shed light on the significant role of financial flows - both licit and illicit - in Mongolian artisanal and small-scale gold mining (ASGM) sector. The study highlights how illegal earnings, transfers, and use of funds perpetuate informality in the sector.

Illicit Financial Flows in ASGM

Illicit Financial Flows (IFFs) are a major concern in ASGM, with money illegally earned, transferred or used flowing into and out of ASM operations. The informality of much of the sector makes it appealing to illicit financiers, allowing them to keep illegal activities such as:

  • Gold smuggling
  • Tax evasion
  • Money laundering

hidden from governments.

Study Findings

The report’s findings come amid growing recognition by UNIDO and UNEP of the links between ASGM and mercury use. Levin Sources undertook a rapid assessment of gold and financial flows linked to ASGM in Mongolia and the Philippines, collaborating with the Global Initiative and financed by UNIDO within a joint framework implemented with UNEP.

Recommendations for Policymakers and Practitioners

The report offers valuable insights for policymakers, industry leaders, and development practitioners seeking to promote sustainable and responsible ASM practices in Mongolia. Key recommendations include:

  • Better understanding and responding to the role of gold supply chains and financial flows in formalization efforts
  • Implementing measures to prevent IFFs and ensure transparency in ASGM operations
  • Supporting initiatives that promote environmentally friendly and socially responsible mining practices

Conclusion

The report provides a nuanced look at how stakeholders can better understand and respond to the role of gold supply chains and financial flows play in formalization efforts. It highlights the importance of addressing IFFs and promoting sustainable ASM practices in Mongolia, and offers valuable insights for policymakers, industry leaders, and development practitioners seeking to promote responsible mining practices.