BRASILIA: A Supreme Court judge backed a government crackdown on illegal gold mining in Brazil, and suspended a legally accepted practice of buyers accepting origin the precious metal’s origin with paper receipts based on the seller’s “good faith”.
Justice Gilmar Mendes’injunction provided the government 3 months to adopt a new regulatory regime for the gold trade to end the sale of gold mined illegally from indigenous lands as well as other areas that are environmentally protected.
In his ruling, Mendes stated that this spurious consortium etablished by criminal organizations and illegal miners and must be stopped as soon as possible.
The decision, which immediately goes into effect needs approval by the full court, provides support to the country’s leftist President Luiz Inacio Lula da Silva, who is facing intense pressure from right-wing politicians to end the crackdown.
Practice of accepting seller’s good faith in gold supply chain
The practice of accepting a seller’s “good faith” in the gold supply chain existed since 2013 and in obscuring the authentic origins of Brazil’s gold exports, roughly 50% of which are, at present, estimated to be mined unlawfully.
The last government of president Jair Bolsonaro lessened environmental protections and boosted wildcat mining in the country’s Amazon rainforest. The measure result in a surge of illegal mining on the Yanomami indigenous reservation and resulted disease and malnutrition that led the Lula administration to declare a humanitarian crisis.
The government moved its decision on setting up a stricter rules protocol for the gold trade, and proposed to end the practice of “good faith” practice and fresh legislation that would need electronic tax receipts for the buying and selling of the precious metal.
