Gold Supply Chain Opacity and Illicit Activities: Insights from Peru and Kenya

By Nicole M. Smith, Kady Seguin, U. Mete Saka, Sebnem Duzgun, Ashley Smith-Roberts, David Soud, Jenna White

Illicit gold flows constitute a major development challenge for governments and a social responsibility challenge for many industries along gold supply chains, including gold refiners and jewelry retailers. This paper highlights aspects of gold supply chains that lack transparency and may indicate junctures where illicit activities are taking place, resulting in a loss of tax and customs revenues. Using Peru and Kenya as case study countries, we draw from United Nations Comtrade data and qualitative data from field research to examine the magnitude of the gold trade, the forms in which gold is traded, discrepancies in reported trade data, and key trade partners for each country. We suggest that certain portions of gold supply chains should be given more attention, some types of gold exports and imports present greater traceability challenges than others, and some countries play a much more significant role in the global gold trade. We propose areas where further investigations may be warranted to ensure more transparent and responsible gold supply chains.

Journal of Illicit Economies and Development, 6(1): pp. 42–59. 2024