State financial oversight official Herman Neglyad, speaking to a major newspaper, outlined how new investment structures tied to precious metals can attract money laundering risks. He noted that as these vehicles begin to channel larger sums, financial intelligence agencies have advised banks to tighten controls over operations linked to the purchase of gold and other precious metals. The emphasis is on strengthening vigilance around sources of funds and the destinations of payments, especially when dealing with physical assets that can cross borders with relative ease. This guidance comes amid ongoing efforts to monitor capital flows and ensure that legitimate investments do not become vehicles for illicit finance. [1]
Neglyad stressed that gold is perceived in Russia as a stabilizing store of value amid concerns about the reliability of foreign currencies. In times of currency volatility or eroding confidence in national money, many investors turn to precious metals as a hedge. The statement highlights a broader trend where individuals and institutions alike reassess risk, seeking tangible assets that retain purchasing power. The analyst suggested that even in a diversified portfolio, precious metals can serve as a ballast, though this role must be paired with rigorous verification of transaction provenance and end-use. [2]
According to Neglyad, it is essential to exercise strict controls over metal purchases, including thorough verification of the origins of funds. The recommendation is for banks to implement enhanced due diligence on each transaction, particularly those involving bullion or coins, to prevent the misdirection of illicit finance through seemingly legitimate purchases. In practice, this means more robust record-keeping, clearer audit trails, and tighter monitoring of counterparties across the lifecycle of a metal trade—from supplier to buyer and beyond to any eventual liquidation. [3]
The central bank clarified that individual deals in precious metals can carry suspicious indicators. The bank notes that while routine purchases may appear harmless, patterns such as rapid, opaque transfers, frequent small lots, or unusual counterparties can signal layered laundering schemes. Officials emphasized the need for financial institutions to assess the true economic purpose behind each transaction, to identify red flags early, and to report questionable activity promptly. This stance reflects a broader commitment to maintaining the integrity of the financial system while enabling legitimate investment in a volatile market. [4]
According to law enforcement and regulators, the laundering model involving precious metals often involves a chain of technical or shell companies that simulate legitimate trading activity. In such schemes, gold or silver may be bought through these entities, then exported or routed through affiliated brokers before funds are funneled back to banks. The proceeds are subsequently converted or dispersed in a way that obscures original sources, making it difficult to trace the money to its illicit origins. Authorities urge firms and financial partners to scrutinize each link in the chain, corroborate ownership, and ensure that the flow of funds aligns with the declared market activity. The discussion also underscores the importance of cross-border cooperation to cut off routes used to wash proceeds. [5]
Historically, the central bank has also addressed laundering patterns connected to investment coins, signaling that various forms of precious metal instruments can be exploited for illicit finance. While investment coins may represent legitimate wealth-building tools, regulators insist that institutions remain alert to unusual transaction characteristics and maintain stringent verification processes. The goal is to preserve confidence in legitimate investment channels while reducing opportunities for misuse. Ongoing supervision, clearer reporting requirements, and enhanced interagency collaboration are part of this framework. [6]