By Polina Devitt
LONDON (Reuters) – The United States on Wednesday imposed sanctions on several Hong Kong companies, including VPower Finance Security, for supporting trade in gold produced by an already sanctioned Russian miner, the U.S. Treasury Department said.
With a new sanctions list, Washington sought to increase pressure on Moscow over the war against Ukraine and focused on Russia’s access to support from third countries. The Treasury Department said foreign companies helping Russia’s war economy are now “at greater risk of sanctions.”
Wednesday’s list included a transnational network that “launders gold for a designated Russian gold producer,” according to a statement.
The producer was Polyus, the statement said. Washington approved Polyus, the largest gold miner in Russia and number four in the world, in 2023.
According to the statement, a Polyus employee and his Hong Kong-based associate were involved in a scheme “whereby payments from the sale of gold of Russian origin were converted into fiat currency and cryptocurrencies through numerous front companies in the UAE and Hong Kong.”
The scheme, the Treasury said, used Hong Kong-based companies Holden International Trading Limited and Taube Precious HK Limited to route payments and UAE-based Red Coast Metals Trading DMCC to divert payments from the sale of gold of Russian origin.
Furthermore, the plan involved Hong Kong-based VPower Finance Security Hong Kong Limited to transport the gold of Russian origin, it added.
Polyus declined to comment. VPower did not respond to a Reuters request for comment. Holden, Taube and Red Coast could not be reached for comment.
An industry body, the London Bullion Market Association (LBMA), said in a statement that it had revoked VPower Finance Security’s LBMA membership with immediate effect.
Russia is the second largest gold mine in the world after China. It produced 321.8 tonnes in 2023, or 8.8% of global mine production, according to consultancy Metals Focus.
Moscow stopped disclosing its export and import data in detail shortly after the massive invasion of Ukraine in 2022, but some of its stockpiles are still visible through data from countries that buy Russian products.
According to data provider Trade Data Monitor (TDM), Hong Kong was the largest importer of gold from Russia as of 2023. The data does not track the UAE’s gold imports from Russia.
