UK Sanctions Gold and Oil Traders in New Russian Clampdown

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(Bloomberg) — The UK government targeted Russian gold miners, the largest refiner and a Dubai-based trader involved in routing funds to Moscow as part of a package of fresh sanctions tied to the country’s gold and oil sectors. 

The UK on Wednesday sanctioned Nord Gold Plc and Highland Gold Mining Ltd. alongside Krastsvetmet JSC, the biggest precious metals refinery in Russia. 

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They were sanctioned together with more than two dozen other individuals and companies, including oil trader Paramount Energy & Commodities DMCC, which was accused of using deceptive practices to avoid sanctions. The government also targeted a United Arab Emirates-based network that it says channeled $300 million of gold sales to Russia.

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“We must keep tightening the screws on Moscow,” Foreign Secretary James Cleverly said in a statement. “Today’s sanctions will hit those who have provided succor to Putin by helping him to lessen the impact of our sanctions on Russian gold and oil — two critical sources of revenue for the Russian war machine.”

Late last year, the UK and the Group of Seven nations implemented a price cap on Russian crude oil that prevents Western companies from providing services in the event it’s trading above $60 a barrel. Since this past summer, virtually all of the country’s supplies have topped that level.

The sanctioning of Paramount Energy appears to be the first shot across the bow of a vast trading network that has sprung up to keep Russian oil flowing.

The UK has now sanctioned more than 1,800 individuals and companies under its Russian sanctions regime, including 129 wealthy people with a combined net worth of £145 billion ($178 billion). The freezing measures also have been deployed as a shortcut to overseas enforcement and prosecutions.

Dubai-based gold trader Paloma Precious DMCC and Zimbabwean businessman Howard Jon Baker were among those targeted in the UAE, the top destination for Russian gold since the invasion of Ukraine shifted trade routes to include Hong Kong and Turkey.

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Baker was tied to the beneficial owner of one of the UAE’s biggest gold refiners, which lost its accreditation over concerns about money laundering, people familiar with the matter told Bloomberg in the summer. Emirates Gold since has been bought by Rockfire Resources, a London-listed mining explorer.

Rockfire, which is suspended from trading, issued a statement saying it was taking legal advice to determine the impact of the UK’s move. Paloma was formerly a shareholder of Rockfire but sold its stake in the firm in September in an off-market transaction, the miner said in a statement Wednesday.

A call to Paramount Energy in Dubai wasn’t answered, and an email wasn’t immediately returned. Paloma Precious didn’t respond to requests for comment. 

The UK sanctioned Vladislav Sviblov, the general director of Highland Gold who bought it from Roman Abramovich in 2020. Sviblov also is general director of the Ozernaya Mining Co., which is developing one of the world’s largest zinc mines in Siberia and has been courted by several international traders seeking long-term contracts, Bloomberg reported last month.

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Krastsvetmet, owned by the Krasnoyarsk region of Russia, refined about 200 tons of gold in 2022, which is equivalent to more than half of Russian annual gold output. It also refines silver as well as platinum and palladium for MMC Norilsk Nickel PJSC, Russia’s biggest miner.

Sanctions also were imposed on Russian National Reinsurance Co., which provides state-backed coverage for domestic risks, including reinsurance of vessels and marine cargoes. The European Union added RNRC to its sanctions list earlier this year, effectively closing the continental market to the company.

—With assistance from Eddie Spence, Alex Longley and Jack Farchy.

(Updates with sanctions, context, Rockfire comment starting in third paragraph.)

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