A recent report by Instituto Escolhas has shed light on the concerning state of European imports of Brazilian gold, highlighting a significant risk of illegality associated with these transactions. The study revealed that a large portion of the gold imported by European Union countries, including Germany, Italy, Czech Republic, and Portugal, may be sourced from regions in Brazil, particularly the Amazon, where illegal mining activities are rampant.
The report, titled “Europe’s Risky Gold,” based on government data, disclosed that in 2023, EU nations collectively imported 1.7 tons of gold from Brazil, amounting to USD 99 million in value. Shockingly, the study indicated that approximately 94% of this imported gold, equivalent to 1.5 tons valued at USD 93 million, is highly likely to have been extracted through illegitimate means.
Germany, for instance, received all of its 1.3 tonnes of Brazilian gold imports from the state of Amazonas, while Italy sourced 254 kg out of 356 kg from the states of Pará and Sao Paulo. These areas have experienced a surge in unauthorized gold mining activities, notably following environmental regulations being relaxed under Brazil’s former President Jair Bolsonaro, leading to increased deforestation.
Larissa Rodrigues, the Director of Research at Instituto Escolhas, emphasized in an interview with Reuters that while the EU has stringent regulations against trading in questionable or illicit metals, there are significant gaps in the due diligence processes of European companies involved in the gold trade. She expressed concerns about the lack of transparency regarding the origins of the gold being purchased and the chain of intermediaries involved in its export to Europe.
The report further highlighted that a substantial portion of Brazil’s total gold exports in 2023, accounting for 54%, have origins that are difficult to trace and could be linked to illegitimate sources, despite efforts by the Brazilian government to combat illegal gold sales.
Instituto Escolhas pointed out that while countries like Canada and the UK primarily import gold from legally licensed mines in Brazil, Switzerland, a key importer, sources gold from unauthorized mining sites. A significant portion of this gold eventually finds its way into the EU, which relies heavily on Swiss gold imports.
Although the EU has implemented the Conflict Minerals Regulation since January 1, 2021, aimed at ensuring responsible sourcing of minerals like gold from conflict-affected and high-risk areas, there are growing concerns about the effectiveness of the regulation and the need for stronger enforcement mechanisms.
In light of these findings, Instituto Escolhas and other NGOs have called for enhanced enforcement measures and stricter regulations to guarantee that minerals and metals imported into the EU are ethically sourced, particularly in regions like Brazil where illegal mining activities and human rights violations persist.
