Allegations Continue: US Mint has been purchasing "Illicit" and Foreign Sourced Gold linked to Terrorist Financing and Money Laundering
This is a 180 degree turn from US law that states that the Mint is legally required to acquire newly mined U.S. gold for the minting of gold coins.
The key insights from the audit report OIG-24-027 by the U.S. Treasury's Office of the Inspector General (OIG) on the U.S. Mint's gold procurement processes are as follows:
Lack of Documentation and Verification: For decades, the U.S. Mint did not request or obtain documentation confirming the origins of the gold they sourced, despite promoting their coins as minted from 100% newly-mined American gold. This lack of verification raises concerns about the potential use of illicit gold, including gold linked to terrorist financing and money laundering.
Non-compliance with U.S. Laws: The Mint was found not to be adhering to U.S. laws, such as the Gold Bullion Act of 1985 and the Presidential $1 Coin Act of 2005, which require the Mint to acquire newly mined U.S. gold. Instead, the Mint relied on suppliers being listed on the London Bullion Market Association's (LBMA) Good Deliveries List (GDL), without verifying the documentation required by the LBMA.
Vague Procurement Practices: The Mint's Basic Ordering Agreements (BOAs) with suppliers did not strictly enforce the requirement for newly mined U.S. gold. The agreements allowed for the supply of "other than newly mined U.S. gold," and there was no distinction made between different types of gold in the Mint's records.
Inadequate Audit and Oversight: The OIG's audit was limited in scope, focusing on whether the gold was sourced from LBMA-listed refiners rather than verifying the original allegations of illicit gold purchases. The audit did not fully utilize available documentation to ensure responsible sourcing.
Reliance on LBMA Standards: The Mint's reliance on LBMA standards for responsible sourcing was deemed insufficient. The LBMA itself stated that while their requirements are a robust starting point, due diligence ultimately rests with the institutions to ensure compliance with local and international laws.
These findings highlight significant lapses in the U.S. Mint's gold procurement processes and underscore the need for enhanced controls and verification measures to ensure compliance with legal and ethical standards.
The U.S. Mint's response to the allegations of purchasing gold linked to terrorist financing and money laundering involved several actions:
Initiation of Investigation: The Mint's senior management contacted the Office of the Inspector General (OIG) shortly after a news reporter raised allegations in June 2019. This prompted the OIG to begin an investigation to determine if the Mint received illicit gold from its suppliers and to assess weaknesses in the Mint's controls over gold acquisition.
Delay in Report Acceptance: The publication of the audit report was delayed for over three years due to the Mint's senior management initially refusing to accept the findings. It took a change in leadership at the Mint for the OIG's recommendations to be accepted.
Reliance on LBMA Standards: The Mint relied on suppliers being listed on the London Bullion Market Association's (LBMA) Good Deliveries List as a measure of responsible sourcing. However, the Mint did not verify the documentation required by the LBMA, which raised concerns about the adequacy of their due diligence processes.
Acknowledgment of Legal Requirements: The Mint recognized its legal obligation to acquire newly mined U.S. gold for minting coins, as specified by U.S. laws such as the Gold Bullion Act of 1985 and the Presidential $1 Coin Act of 2005. However, the Mint's procurement practices did not strictly enforce these requirements.
These actions and responses highlight the Mint's initial reluctance to address the allegations and the eventual acceptance of the need for improved controls and compliance with legal standards.
Going on since 2002… hmm, looks like maybe they finally ran out of the Iraqi gold and Africa has turned off their spigots.
source - https://kitco.com/news/article/2024-08-13/united-states-mint-sourced-non-american-gold-decades-misled-customers-and