Press release

Swiss Decision Undermines Efforts to End Conflict Resource Trade

Date
June 02, 2015
Contact
Communications
media@opensocietyfoundations.org
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NEW YORK—A decision not to prosecute a Swiss precious metals company that handled pillaged African gold undermines international efforts to eliminate the illegal resource trade that fuels conflicts around the world, the Open Society Justice Initiative said today.

The Justice Initiative, together with the Conflict Awareness Project, supported a legal complaint filed in November, 2013 with Swiss federal prosecutors by the group Track Impunity Always (TRIAL), which accused Swiss metal refiner Argor-Heraeus SA of illegally processing over three tones of pillaged gold from the Democratic Republic of Congo between 2004 and 2005.

While the Swiss Federal Prosecutor’s Office (SFPO) acknowledged that Argor did refine looted gold, and that it violated its duty of diligence, it nonetheless decided to close the case on March 10, 2015.

According to the complaint, Argor-Heraeus knew, or at the least should have suspected, that these raw materials, provided by Hussar Ltd and Hussar Services Ltd, interlinked companies based respectively in Jersey and London, were the proceeds of pillage, which is a war crime. Argor knew that Hussar had obtained the gold from a Ugandan trading company which itself had imported the gold “from the region.” At the time, virtually no gold was produced in Uganda and almost all gold exported from Uganda was smuggled from mines controlled by unlawful armed groups in neighboring Democratic Republic of Congo.

According to this decision:

  • Argor-Heraeus did indeed refine three tons of dirty gold pillaged by Congolese rebels;
  • numerous reports linking the armed conflict in the DRC and the Congolese origin of dirty gold had been published at the time of the events;
  • proceeds from the refining of such gold were a key element of the war effort in eastern DRC;
  • the company violated a regulation it had itself adopted in order to meet the requirements of the Law on Laundering and the Law on the Control of Precious Metals—the violation of an anti-laundering regulation can lead to a criminal conviction.

According to the prosecutors’ report, indications of the origin of the gold “should have raised Argor’s suspicions …. It failed to clarify the origin of the gold although its internal regulations required it to do so if there were any doubts as to the origin of the raw material for refining.”

Nevertheless, the prosecutors concluded that Argor-Heraeus should not be held responsible for any wrong-doing as “it is not clear … that the defendants had any doubts as to, or concealed any evidence of, the criminal origin of the gold.”

Ken Hurwitz, who heads the Justice Initiative’s anti-corruption work, said in response to the decision: “The Swiss Prosecutor appears to hold highly sophisticated professionals in the precious metals business to an extremely low standard. As described in the decision, the refinery’s ‘due diligence’ exercise gave them less than a Google search would have as to the likely source and legality of gold exported from Uganda.”

The complaint was based upon nine years of investigative work carried out by Kathi Lynn Austin, of the Conflict Awareness Project, supported by the Justice Initiative.

The Justice Initiative has also supported TRIAL’s lawyers in developing the international legal arguments around corporate liability for the war crime of pillage and other aspects of the case.

The results of these investigations have been shared with Jersey Channel Islands and UK law enforcement authorities.

The Justice Initiative’s anticorruption work focuses on high level corruption fueled by trade in national resources, and includes efforts to identify new legal strategies for fighting transnational and national corruption.

Conflict Awareness Project is an international not-for-profit organisation that investigates, documents and brings to justice those principally responsible for arms trafficking and the transnational criminal operations that are fuelling these conflicts. 

TRIAL is a Swiss NGO fighting the impunity enjoyed by those responsible for and complicit in the most serious international crimes.

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