Russian Banks Are Reportedly Swapping Gold for Dollars



Feb 7, 2024

Bloomberg reporting – Russian banks have reportedly been evading sanctions restricting the import of dollars and euros by engaging in gold trading with the United Arab Emirates and Turkey, according to research by a financial-intelligence company.

These sanctions were implemented after Russia’s invasion of Ukraine. The research discovered that during the first quarter of 2023, several financial institutions, including Lanta Bank JSC, imported over $82 million worth of euros, dollars, and UAE dirhams. Additionally, the same entities involved in cash imports from Russia were found to have imported gold from Russia during similar periods.

While Bloomberg couldn’t independently verify all trade and company data, it’s uncertain if the banks are still employing the gold-for-cash strategy. Sayari’s data suggests that Russian lenders continued to ship gold for banknotes through at least July or August of the previous year, with gold deliveries also expanding to Hong Kong.

The Washington-based firm collected trade data from bills of lading, revealing circular trades flowing through intermediaries. However, the data didn’t specify the ultimate recipients of the currencies or their ties to sanctioned Russian entities.

In response to inquiries, a UAE official reaffirmed the country’s commitment to upholding the integrity of the global financial system and adherence to UN sanctions, emphasizing their strict processes for dealing with sanctioned entities. Lanta Bank’s press service didn’t respond to inquiries, and the Turkish government declined to comment.

The tactic of trading gold for currencies became widespread after the EU and US imposed restrictions on Russia’s access to western currencies in response to the war against Ukraine. Russia, a significant gold producer, has shifted to alternative export routes, particularly via Turkey, the UAE, and Hong Kong, due to sanctions on miners and lenders. These countries have become crucial trading partners for Russia, with increased scrutiny on transactions linked to the country to avoid sanctions violations.

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