Every year, illicit gold worth more than $30 billion flows across the globe, including gold originating in conflict zones and authoritarian states. Much of it is smuggled to gold-trading centers such as Dubai or Hong Kong before silently entering the global market. Unlike drug trafficking, the trade in illicit gold does not register to many in the West as an emergency because its primary victims are not in wealthy countries. But this trade is underwriting deadly crises around the world. It is financing both sides of the Sudanese civil war; the authoritarian regime of Nicolás Maduro in Venezuela; transnational criminal networks, such as Venezuela’s Tren de Aragua, which the United States recently designated a foreign terrorist organization; multiple armed groups in the Democratic Republic of the Congo; and Russia’s war in Ukraine.
Over the past decade, gold has nearly tripled in price, reaching record highs earlier this month. One can smuggle more than $1 million worth of gold in nothing more than a briefcase, and demand for it is always strong because, unlike critical minerals, gold is universally valuable. Illicit gold can also be melted and enter formal markets with gold that is legally mined. As a result, profiteers are searching for and extracting gold under worsening humanitarian and environmental conditions.
The illicit gold trade directly affects U.S. national security because it is fueling armed conflicts and transnational criminal enterprises. And because the gold is being laundered into global supply chains, it threatens global business risks for banks, tech companies, and jewelers. The United States, global financial institutions, various regulators, and U.S. allies such as the United Kingdom and the European Union have the capabilities to help curb this trade. They must use them.
These players should help the largest gold-trading centers, where most illicit gold is laundered— principally the United Arab Emirates but also China, India, Switzerland, and Turkey—reform. The UAE is of particular concern. In 2022, the country imported and refined an estimated 400 tons of smuggled gold before selling it on global markets. Banks and regulators may find willing local partners: some of the trading centers are facing financial hurdles as a result of smuggling and other money-laundering issues, and they want to increase their credibility in the global financial system. If they meet certain due diligence standards, banks and regulators should offer them financial incentives, including positive evaluations and memberships to global gold organizations, which would improve their reputation and increase their share of global trade.
The United States, led by Secretary of State Marco Rubio, should also work with the gold industry to establish and lead a public-private illicit gold initiative that can publish real-time data on the gold trade and independently monitor and certify trading centers. Rubio, together with U.S. Treasury Secretary Scott Bessent, should create an illicit-gold task force that can investigate and sanction gold-trafficking networks and exchange data on these networks with banks and refiners. In the absence of such measures, illicit gold will further infiltrate global markets and fund war and criminal gangs.
GOLD NONSTANDARD
Although artisanally mined gold provides a livelihood for mining communities in many countries, many small-scale mines situated in conflict areas or authoritarian states frequently employ children as young as eight years old and damage the environment by using corrosive chemicals, including mercury and cyanide. Gold from such mines is then usually smuggled to neighboring countries for initial refining before being shipped or smuggled to a refinery in a global gold-trading center—most often Dubai or Hong Kong. There, it gets made into bars or jewelry and laundered into the world supply chain.
The massive scale of the global gold trade—more than $380 billion in 2024—makes illicit gold very valuable to the criminal groups and repressive regimes that sell and smuggle it and to the traders and refiners who buy it. As a result, illicit gold is increasingly a driver of war. In Sudan, for instance, where gold makes up 70 percent of exports, the ability of the country’s warring factions to purchase weapons is heavily dependent on them procuring and selling illicit gold. That fact did not stop the UAE from importing $1 billion in Sudanese gold in 2023. The largest gold mine in Sudan is controlled by a company linked to the UAE’s royal family. According to investigations by the United Nations and TheNew York Times, the UAE even provided weapons to Sudan’s paramilitary Rapid Support Forces—which the U.S. government determined has committed genocide in Sudan—in part to ensure access to the country’s gold. Abu Dhabi denies this involvement.
Such trade also helps sustain the repressive regime of Venezuelan President Nicolás Maduro, which sold more than $1 billion of illicit gold to UAE companies in 2020. Armed groups in the region that commit human rights abuses and deforest the Amazon rainforest, including Tren de Aragua, also mine and traffic illegal gold to the tune of $2.2 billion per year.
Russia’s involvement in the illicit gold trade spiked after many Western states sanctioned Russian gold following the country’s full-scale invasion of Ukraine in 2022. The measures have forced Russia, the world’s second-largest producer of gold, to try to smuggle out its product and source additional gold from illicit sources, including both sides of the Sudan conflict. The UAE’s imports of Russian gold—$2.5 billion in 2023—have fueled Moscow’s war economy.
Gold also drives the escalating conflict in the Democratic Republic of the Congo, where Congolese forces are fighting an insurgency by the Rwandan-backed M23 movement. In 2022, the Congolese and Emirati governments set up a de facto gold-trading monopoly in eastern Congo that was worth $1.9 billion and likely included trade in conflict gold, according to UN experts. This arrangement, however, cut out Rwanda, angering Kigali; afterward, M23 forces, armed by the Rwandan government and supported by up to 12,000 Rwandan troops, took over the swaths of eastern Congo that include its gold mines. Rwanda set up a refinery and exported a record $1.5 billion worth of gold in 2024, despite the fact that the country has nearly no domestic production. In 2024, Uganda, which also supports the M23, likewise exported a record $3.4 billion of gold, including gold from eastern Congo. The development group Swissaid estimates that between 32 percent and 41 percent of the gold produced in sub-Saharan Africa in 2022 may have been illicit—far above the global average. Nearly all the illicit gold exported from this region flows to the UAE.
Like many cash transactions, the illicit gold trade is insufficiently monitored by governments and industry. There is also no system for sharing real-time data on gold traffickers, meaning bodies that have the power to sanction entities moving illicit gold are often behind in tracking them. The only publicly available data on where gold is traded is two years old, by which time illicit gold has left its country of origin and been laundered into the global supply chain. These data gaps allow countries that have little to no domestic production to buy and sell illicit gold without consequence.
There have still been attempts to better regulate this trade.In 2012, for instance, the London Bullion Market Association, an international trade association for gold made up mainly of global banks and refiners, created a due diligence system to audit refineries for high-risk gold—or gold that may have been mined illegally or in a conflict zone—in their supply chains. Theres a nascent auditing system for mines, too. Certain regions, including the Great Lakes region of Africa, have set up intergovernmentalprocesses to certify whether mines are conflict free and devoid of child labor. In 2024, the private sector introduced a system by which refiners, miners, and industry associations can share data.
There have also been budding attempts to hamper the beneficiaries of smuggling. Beginning in 2020, the intergovernmental Financial Action Task Force placed the UAE on its so-called gray list of higher-risk countries, in part because of the country’s trade in illicit gold. This threatened to diminish the UAE’s access to the global financial system; after Abu Dhabi heavily lobbied task-force countries and introduced a few reforms, the task force removed the UAE from its gray list. That same year, the London Bullion Market Association began pressuring the governments of international gold-trading centers—China, India, Switzerland, Turkey, and the UAE—to reform their gold-buying practices. This resulted in some changes. The UAE, for instance, passed a law requiring independent audits for its refiners, suspended 30 of them for not keeping proper records, and introduced a new corporate tax on gold dealers.
The United States and Europe have started to take slightly more aggressive action, too. The European Union has kept the UAE on its own gray list, marginally impacting the country’s credit risks and capital flows. In 2024, the United Kingdom and United States sanctioned a $300 million gold-laundering network operating in Hong Kong, Russia, and the UAE, and, earlier this year, also sanctioned a UAE-based conglomerate, which includes a gold company, for supporting the Sudanese Rapid Support Forces.
Although these measures are starting to produce some welcome changes, illicit gold continues to flow through trading centers, and the vast majority of illicit traders remain unimpeded. This is because the implementation of these measures is insufficient and uncoordinated and because there are not nearly enough concrete consequences—including sanctions or prosecutions—for illicit-gold traffickers and the refiners that purchase from them.
STRAIGHT AND NARROW
It is essential to address the illicit gold trade before it grows into an uncontrollable black market for criminals, traffickers, armed groups, and rogue regimes that threaten U.S. national security and the integrity of the global financial system. But key gold trading centers have incentives to reform. These centers want full access to the global financial system. The Financial Action Task Force will reevaluate the UAE in 2026, creating an urgency for the Emiratis to curb the illicit-gold trade that takes place in their country. The task force should stringently examine Abu Dhabi’s requirements for importers and bullion dealers bringing in gold from high-risk countries, perhaps by requiring a financial paper trail for all imported gold and the implementation of due diligence audits. It should also call to end cash-for-gold transactions above minimal amounts.
The trading centers also seek greater legitimacy in global gold markets in order to sell more gold and improve their international reputation, especially in the face of new refining competition in Qatar and Saudi Arabia. Entities such as the London Bullion Market Association could provide these trading centers with benefits—such as accepting some of their refiners as members—if, for example, they adequately reformed and implemented their cash-for-gold and customs policies. If they failed to do so, they would instead be cut off from the association’s market. In 2022, both the London Bullion Market Association and the World Gold Council launched a gold-bar integrity program that uses blockchain technology to make gold transactions more traceable. They could offer to include UAE-based refineries in their programif those facilities agreed to follow much stricter due diligence and transparency measures; this would open the refineries up to the London Bullion Market Association’s massive market and help them gain prestige in the global gold trade.
The Organization for Economic Cooperation and Development has an important role to play, too, as a platform for governments, the private sector, and civil society to coordinate and share information on illicit gold. Banks and jewelers must also enhance their due diligence efforts by, for example, red-flagging gold exported from trading centers known to buy and sell illicit gold, banning cash transactions above small amounts, and requiring proof of payment for all gold imports as opposed to only certificates of origin, which are easy to fake.
Washington should create a task force that can investigate and sanction gold-trafficking networks.
When he was a senator, Rubio called the illicit gold trade a “direct threat” to U.S. national security because of how it was strengthening the Maduro regime and demanded that Washington choke it off. Now, as a central figure of the Trump administration, Rubio has an opportunity to do so. He should help lead a public-private illicit gold initiative, partnering with the London Bullion Market Association, the World Gold Council, bullion and central banks, and allies such as the United Kingdom and the EU. The resulting entity should publish real-time data related to the gold trade, which would help curb smuggling by allowing banks and refiners to instantaneously cut off high-risk illicit gold,independently monitor trade centers to catch smugglers, and certify relevant centers as conflict free. The U.S. government should work with the customs department of the UAE, the government of which is already a strategic partner, to identify gold-smuggling patterns and companies and help indict and prosecute bad actors.
Rubio and Bessent should also establish a U.S. government illicit-gold task force to investigate and sanction gold-trafficking networks. Recent sanctions against such networks, including British and U.S. sanctions against UAE-based companies and EU sanctions against a Rwandan refinery, are a good start, but to have a global effect these sanctions must be more far-reaching and coordinated. As part of the task force, the U.S. Treasury Department’s Financial Crimes Enforcement Network could issue alerts, exchange information with banks and refiners to stay updated on traffickers, and encourage trading entities to file reports on suspicious transactions. The State Department could also encourage shippers and jewelers to share any information they may have on smuggling networks.
Rogue actors are increasingly profiting from illicit gold. But if the U.S. government works together with industry and key allies, it can help end this deadly trade and bolster its own security interests. Targeting the system’s pinch points—refineries, trading centers, and the governments that allow illicit trade—is the place to start.
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