HomeNewsBrief'Colombian Gangs Use Illegal Gold Mining in Ecuador to Launder Cash'
BRIEF

'Colombian Gangs Use Illegal Gold Mining in Ecuador to Launder Cash'

ECUADOR / 19 JUL 2012 BY HANNAH STONE EN

Colombian criminal groups are reportedly using unlicensed gold mining in northern Ecuador to launder money, providing another window into how unregulated gold mining may be linked to organized crime in the region.

In May 2011, Ecuadorean Army operations shut down the unlicensed gold mining in Selva Alegre, in the province of Esmeraldas close to the Colombian border, destroying 178 machines. As El Comercio reported, they justified this operation on the grounds that illicit mining was being used by Colombian criminal groups to launder money.

The newspaper quoted the former head of the Financial Analysis Unit (UAF) explaining how this money laundering network worked. He said that gold is taken illegally to Colombia, where mining companies which don't actually produce any gold export it to the United States. This gold is later sent back to Colombian, and processed once more. This means that a company that does not mine gold can buy it illegally, sell it in the US, and then bring it back to Colombia and sell it once again, disguising the source of their illicit profits.

El Commercio notes that in a recent report the Financial Action Task Force of South America (Gafisud) said that buyers and sellers of precious metal and stones were not covered by laws to prevent money laundering, and said that they should be better regulated.

InSight Crime Analysis

El Comercio's report offers another explanation of how unlicensed gold mining can be linked to organized crime. In Colombia, the main connection between the two is that illegal armed groups like the Revolutionary Armed Forces of Colombia (FARC) are thought to run many illicit mining operations. Mining is now thought to contribute 30 percent of the group's income. In northern Antioquia, the FARC charge the equivalent of over $1,000 for each bulldozer that enters territory they control. In other parts of the country, neo-paramilitary drug gangs like the Urabeños manage the business. For this reason, the government has declared illegal gold mining to be a top security priority.

Ecuador has launched a drive against clandestine mining justified on similar grounds, with President Rafael Correa saying in 2010 that he would not let Ecuador's security deteriorate to the point that extensive territories are controlled by illegal groups, not by the state.

In Peru, by contrast, there appears to be less evidence linking llegal mining to organized crime. The goverment has faced massive protests from local people in mining communities where it has attempted to bring unlicensed extraction to a halt.

Outgoing Colombian police chief General Oscar Naranjo noted recently that cracking down on illegal mines is more politically costly than operations against drug trafficking, as many question why the government needs to take strong measures against the extraction of a legal substance.

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

COLOMBIA / 4 MAR 2011

A report from the New York Times published Friday examines the way that gold mining in northern Colombia,…

ECUADOR / 10 AUG 2011

A crime sweep carried out by the Ecuadorean military in a coastal town is the latest sign of the military…

COLOMBIA / 7 DEC 2015

Authorities in Colombia have dismantled a network of illegal mining operators allegedly working for drug trafficking group the Urabeños, providing…

About InSight Crime

THE ORGANIZATION

InSight Crime Tackles Illegal Fishing

15 OCT 2021

In October, InSight Crime and American University’s Center for Latin American and Latino Studies (CLALS) began a year-long project on illegal, unreported, unregulated (IUU) fishing in…

THE ORGANIZATION

InSight Crime Featured in Handbook for Reporting on Organized Crime

8 OCT 2021

In late September, the Global Investigative Journalism Network (GIJN) published an excerpt of its forthcoming guide on reporting organized crime in Indonesia.

THE ORGANIZATION

Probing Organized Crime in Haiti

1 OCT 2021

InSight Crime has made it a priority to investigate organized crime in Haiti, where an impotent state is reeling after the July assassination of President Jovenel Moïse, coupled with an…

THE ORGANIZATION

Emergency First Aid in Hostile Environments

24 SEP 2021

At InSight Crime's annual treat, we ramped up hostile environment and emergency first aid training for our 40-member staff, many of whom conduct on-the-ground investigations in dangerous corners of the region.

THE ORGANIZATION

Series on Environmental Crime in the Amazon Generates Headlines

17 SEP 2021

InSight Crime and the Igarapé Institute have been delighted at the response to our joint investigation into environmental crimes in the Colombian Amazon. Coverage of our chapters dedicated to illegal mining…