Traces of illegal North Korean gold discovered in US products
Under the Dodd-Frank Act provision firms were required on Monday to report where they use supplies of gold, tungsten or tin sourced from the Congo region controlled by armed forces.
However, they ended up with an absolutely different discovery.
68 US companies revealed that their producers found traces of gold from North Korea’s central bank in their filings with the Securities and Exchange Commission.
The US began to impose sanctions against the Democratic People's Republic of Korea (DPRK) in 1950 at the start of the Korean War. They have been extended over the years due to North Korea's unwillingness to curb its nuclear weapon development program and its human rights record. The US, along with other allies has been blocking imports and exports from Pyongyang in order not to aid any nuclear advancement.
"It's a problem even if the raw materials are coming very indirectly through suppliers," Market Watch quoted Alexandra Lopez-Casero, an attorney at Nixon Peabody LLP who specializes in sanctions, as saying.
Gold is used in a range of products from jewelry to electric wiring to cellphones to space equipment.
IBM revealed gold from North Korea was used in their memory storage systems, and other companies like Williams Sonoma, a gourmet cookware company, and Rockwell Automation Corp, one of the world's largest industrial automation companies said that gold processed from North Korea is mixed in with products.
"In January, upon learning that the Central Bank of DPRK may be used by a small number of HP suppliers, we took immediate action to launch investigations," HP’s spokesman Michael Thacker, said, as quoted by Bloomberg News.
"To date, the information we have received indicates no minerals obtained from Central Bank of DPRK were included in HP products," Thacker said.
A lot of companies rely on information from a non-profit Conflict Free Sourcing initiative to avoid sourcing gold from places like North Korea. A spokesman for the non-profit, Julie Schindall, said an error in the template could be to blame. The smelter code, a stamp which denotes the origin of gold blocks, was accidentally listed as being located in South Korea, the WSJ reported.
Up until 2006, North Korea’s central bank refined gold that were certified by the London Bullion Market Association, but there is discord among exports whether the bank is currently refining gold.