United States: OFAC Announces Sanctions On Illicit Gold Companies Funding Wagner Forces And Wagner Group Facilitator, New Burma Sanctions

On June 27, 2023, the United States Department of the Treasury's Office of Foreign Assets Control ("OFAC") imposed sanctions on various entities and one individual connected to the Russian mercenary group PMC Wagner ("Wagner Group") and its founder and owner Yevgeniy Prigozhin ("Prigozhin").

In this announcement, which can be read in full here, OFAC sanctioned four companies in the Central African Republic ("CAR"), United Arab Emirates ("UAE"), and Russia pursuant to Executive Order ("E.O") 14024 that have engaged in illicit gold dealings to fund the Wagner Group, allowing it to sustain and expand its forces. OFAC also sanctioned on an individual, a Russian national, who has been central to activities of Wagner Group units in Mali.

According to OFAC, the Wagner Group exploits insecurity around the world, committing atrocities and criminal acts that threaten the safety, good governance, prosperity, and human rights of nations, as well as exploiting their natural resources. Concurrently, the United States Departments of State, Treasury, Labor, Commerce, and Homeland Security, along with the United States Agency for International Development, have issued a new advisory focused on the gold sector across sub-Saharan Africa that can be read here.

The sanctioned entities include Midas Ressources SARLU ("Midas"). Diamville SAU ("Diamville"), Industrial Resources General Trading ("Industrial Resources"), and Limited Liability Company DM ("OOO DM"). Midas is a CAR-based company affiliated with Prigozhin that maintains ownership of CAR-based mining concessions and licenses for prospecting and extracting minerals, precious and semi-precious metals, and gems. It contains preferential mining allowance to the CAR's Ndassima gold mine and is key to financing the Wagner Group's operations in the CAR and beyond. Midas is also connected to individuals involved in Prigozhin's mining activities in Madagascar.

Diamsville is a gold and diamond purchasing company based in the CAR and controlled by Prigozhin. Diamville has participated in a gold selling scheme that entailed converting CAR-origin gold into U.S. dollars and has shipped diamonds mined in the CAR to buyers in the UAE and in Europe. Industrial Resources is a Dubai-based industrial goods distributor that works to generate and move funds for Prigozhin. Both Industrial Resources and OOO DM, a Russia-based firm, also participated in the gold selling scheme.

OFAC also sanctioned Andrey Niklayevich Ivanov ("Ivanov"), a Russian national who is an executive in the Wagner Group. During the spring of 2023, Ivanov worked closely with Prigozhin's entity Africa Politology and senior Malian government officials on weapons deals, mining concerns, and other Wagner Group activities in Mali.

In addition to the above sanctions, OFAC, on June 21, 2023, separately announced sanctions pursuant to E.O. 14014 on Burma's Ministry of Defense ("Ministry of Defense") and two regime-controlled financial institutions.

In this announcement, which can be read in full here, OFAC states that the Burmese military regime has relied on foreign sources, including sanctioned Russian entities, to purchase and import arms, dual-use goods, equipment, and raw material to manufacture weapons to support its repression across Burma. The military regime and other designated state-owned entities have relied on state-owned financial institutions that act as the primary foreign currency exchanges in Burma to facilitate these transactions.

The sanctioned entities include the Ministry of Defense, Myanma Foreign Trade Bank ("MFTB"), and Myanma Investment and Commercial Bank ("MICB"). According to OFAC, the Ministry of Defense has continued to import goods and materiel worth at least $ 1 billion since the coup in 2021, including from sanctioned entities in Russia. MFTB and MICB are state-owned financial institutions in Burma that primarily function as foreign currency exchanges and enable the conversion of kyat to U.S. dollars and euros, and the reverse. While MFTB and MICB allow state-owned enterprises to access foreign markets for revenue generation, these financial institutions also enable the Ministry of Defense and other sanctioned military entities to purchase arms and other materials from foreign sources.

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