A report published by the World Economic Forum (WEF) suggests actions that could be taken to reduce financial crime in the metals and minerals sectors.
The report is concerned about small-scale illegal mining, but it also wants trade in metals and minerals produced by large miners to be closely monitored.
According to the report, the total value of trades through the illicit economy increased from US$650 billion in 2011 to US$1.77 trillion in 2015.
This data includes proceeds from drug and sex trafficking as well as counterfeiting, but it also includes a range of commonly traded commodities, including fish, timber, oil, metals and minerals.
In the report, the WEF recommends reforms that would particularly address illicit trading in metals and minerals.
It recommends the reforms must be mineral-specific and based on an analysis of specific mineral supply chains.
Such measures would span the range of activities from mining through trading to final use, and include safeguards to protect any positive aspects of illicit activity, such as employment.
Mapping trade flows
Mapping illicit mining and trade in minerals is also recommended. Such mapping would cover two distinct categories: precious metals and minerals such as diamonds, gold and rubies, and minerals that require very low capital investment and skill to extract, such as tantalum ores and tin.
The map would focus on regions of concern where conditions are most likely to support illicit activity and where certain target minerals are present
The supply and value chain of each target metal can be captured as part of a database.
Illicit trade in gold is at least US$2.3 billion annually based on outdated data from just three countries: Democratic Republic of Congo, South Africa and Peru. The value of diamonds traded illicitly amounts to an estimated US$0.9 billion per annum.
The WEF report, State of the Illicit Economy can be found here
Categories: Trade Based Financial crimes News