While anti-graft organisations including the Inspectorate of Government and Ethics ministry deal with corruption-related cases, there is less scrutiny on a far more sophisticated form of crime – illicit financial outflows.
The opaque gold sector in the clutches of cartels has been handed free rein by government to set the rules of the game. This is because government has not streamlined the processes of registration and supervision in the sector.
Firms are now relying on a complex system to hide funds in safe havens and secrecy jurisdictions.
One of the companies facing investigation is Africa Gold Refinery (AGR) owned by wealthy Belgian businessman Alain Goetz.
Mr Goetz is a director or owner of 15 different companies located in Uganda, Dubai, Belgium, and Luxembourg, and eight of these have the same address in Belgium, which raises eyebrows.
AGR has established a $23 million (Shs85.6b) refinery facility in Entebbe to process gold for exports.
An investigation by The Sentry places Mr Goetz, who is close to the political establishment in Uganda, into the crosshairs.
The Sentry is a team of policy analysts, regional experts, and financial forensic investigators that probe corruption, illicit financial outflows, and stolen mineral wealth.
They also focus on abetting profiting from war and genocide largely by the political elite.
According to The Sentry report, AGR exported gold at least worth $377 million (Shs1.4 trillion) in 2017 to an affiliate of the Belgian refinery Tony Goetz NV, based in Dubai.
Interviews conducted by The Sentry bring to the fore sticky issues among, which include the allegation that Goetz has refined illegally-smuggled conflict gold from eastern Congo at AGR in Uganda and exported it through a series of companies to the United States and Europe.
Given the geo-political implications in the volatile Great Lakes, Uganda should be worried about giving sanctuary to an investor who is dealing in conflict minerals from the DRC.
In 1999, the International Court of Justice (ICJ) slapped a $10 billion (Shs37 trillion) penalty on Uganda for plundering minerals from eastern DRC and committing crimes against humanity during the protracted conflict in the late 1990s. Uganda is yet to pay this debt, which outstrips its annual budget for this financial year.
According to the United Nations (UN), conflict gold provides the largest source of revenue to militias and other actors involved in the flashpoint eastern Congo, where an estimated 3.3 to 7.6 million people have died.
A number of sources interviewed by The Sentry pointed at AGR as sourcing conflict gold from DRC.
Twelve traders and government officials in the region told The Sentry that AGR has trafficked a huge amount of gold from DRC to Uganda.
This has driven the volumes of Uganda export records reviewed by The Sentry, which indicate that AGR accounted for more than 99 per cent of gold officially exported from Uganda in 2017.
The UN group of experts reveals that Uganda is also the main transit hub for gold smuggled out of Congo. Two major gold smugglers in Congo confirmed to The Sentry that they illegally trafficked gold from eastern Congo to AGR and other regional gold traders backed these accounts.
The Sentry revealed that four regional traders mentioned gold traffickers, Buganda Bagalwa and Mange Namuhanda, who have been named in several U.N. Group of Experts reports on Congo as purchasers of conflict gold, supplied gold to AGR in 2017.
AGR in its response specifically denies having received gold from Bagalwa or Namuhanda. It also rejects allegations that it received significant amounts of undocumented gold from other sources.
These claims are noncompliant with both international supply chain due diligence guidance and international anti-money laundering safeguards because the network’s companies buy, refine, and then sell the gold.
In Uganda, AGR has been handed a tax waiver, which was not approved by Parliament.
On the heels of AGR’s opening in 2014, Uganda increased its gold exports by a staggering 85,000 per cent, going from exporting a paltry $443,000 (Shs1.6 billion) worth of gold in 2014 to an estimated $377 million(Shs1.4 trillion) in 2017.
Mr Goetz resigned from the position of Chief Executive Officer not long after The Sentry report was released, and has since been replaced by Mr Alphonse Katarebe.
Attempts to contact Mr Goetz were futile as he did not respond to our phone calls and emails.
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