New Gold Industry Rules Aim to Cut Off Funding to Armed Groups
LONDON – A new requirement from the London Bullion Market Association (LBMA), the leading global gold refinery industry association, promises to increase transparency in the gold supply chain adn perhaps disrupt the financing of armed groups linked to illicit gold trade. Starting in 2026, refiners will be mandated to publicly disclose the identities of their suppliers originating from “red flag locations” – defined as regions experiencing conflict, political instability, repression, institutional weakness, or widespread human rights violations.
The move addresses long-standing concerns about opaque supply chains that have enabled armed groups to profit from the gold trade in countries including venezuela, Sudan, and the Democratic Republic of Congo.
Human Rights Watch has urged the LBMA to rigorously apply the Organisation for Economic Co-operation and Growth’s (OECD) definition of “red flag” locations, aligning with the OECD’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High Risk Areas. The institution has also advocated for the inclusion of countries frequently used for gold transit, such as Brazil and the UAE, in the required disclosures.
Furthermore, Human Rights Watch has called on the LBMA to expand disclosure requirements by 2027 to include the names and locations of all mines and suppliers, not just those in designated “red flag” areas. The organization argues that human rights violations can occur throughout the entire supply chain, and greater transparency is essential for identifying and addressing abuses.
“Supply chain transparency can help identify abuses and abusers in global supply chains; an vital step to ensuring respect for human rights,” according to a recent submission from Human Rights Watch to the LBMA.
Advocates believe increased transparency in the gold trade is critical to severing the financial lifeline of armed groups and ending the abuses suffered by communities in affected regions, particularly in places like Venezuela. Public disclosures of refiners’ supply chains could help detect and dismantle illegal networks, ultimately curtailing the ongoing harm to residents.
