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Apr 26, 2024 01:26 PM EDT
Costco's Gold Bars Part II: From Africa to the Alps to You
So where exactly does that shiny new "999.9 fine gold minted" bar from Costco come from? Switzerland, right? That land of green Alpine pastures, artisanal chocolates of every variety, and yodeling? Nope. Like the cocoa and sugar used to make their famous chocolate, the Swiss import all of the gold refined in the country. And they import a lot of it - two-thirds of the world's gold, in fact - $98.5 billion worth in 2023.
With four of the world's largest gold refineries and not a single gold mine in Switzerland, the Alpine neutrality has long been in the business of importing, refining, and exporting the world's gold. Some of this gold, however, has not always originated from mines operated by the world's most upstanding governments, companies, or citizens or from banks of equally questionable repute. Indeed, some of it has been ripped from the very mouths or torn from the limbs and necks of the victims of some of history's worst atrocities.
Speaking of which, Nazi Germany's Reichsbank transferred $444.1 million - valued in the billions today - in gold plundered from the reserves of conquered countries to Switzerland throughout World War II. At least some of these gold transfers included gold ingots recast from the smelted jewelry, watches, and gold fillings seized from concentration camp victims. Indeed, Switzerland has been called "the largest beneficiary of Germany's gold efforts" during the war. Adolph Hitler is said to have deposited his "Mein Kampf" royalties at a Swiss bank, and Swiss authorities secretly cooperated with the Reichsbank to smuggle gold out of Germany in the days before the Third Reich's surrender.
That wasn't the end of Switzerland's problematic relationship with gold either. Since then, Switzerland's gold refineries have come under scrutiny for their ties to "blood gold" - illicit gold sourced through violence, the proceeds of which are used to perpetuate hostilities - and dirty gold, such as that used to circumvent sanctions levied against countries in response to illegal wars of aggression like Russia's invasion of Ukraine. According to an investigation by The Sentry, over $3 billion in gold mined from conflict-affected regions reaches global markets annually. And the path that gold takes to the world typically at some point flows through Switzerland.
Today this blood trail of gold begins at mines in African states like Sudan, Mali, and the Central African Republic where nonstate and quasi-state armed actors, i.e. rebel groups, militias, paramilitaries, and private military companies have seized control of mines or strong-armed mining concessions from existing operators. The unprocessed gold is then exported to the United Arab Emirates (UAE) where it is smelted down and processed ("cleaned") before being sold on the international market, one of which is Switzerland.
That gold is then further "cleaned" in Swiss refineries, stamped with the coveted "Essayeur Fondeur" - the official Swiss stamp of authenticity - and then sold and distributed throughout the world to retailers like Costco. Swiss gold, like Swiss chocolate, has long set the quality standard for being among the finest (if not the finest) in the world; thus, getting that "Essayeur Fondeur" Swiss stamp of approval on a gold bar is the end goal and primary motivation for sending gold to Switzerland regardless of where it was sourced. "Blood gold" comes out of Sudan or Mali or another conflict-affected country, sojourns at the gold washing souk in Dubai, and is rebranded in Switzerland. Voilà - see the stamp? - it's "Swiss" now. Not a drop of blood on it.
Those Costco gold bars, "Swiss-made" by MKS PAMP, have likely gone through the same "cleaning" and rebranding process at some point along their way to your shopping cart too. There's no way of knowing or tracing the amount of blood gold in a gold bar once it's been "reprocessed" (relaundered) in Switzerland though; and if they did, they wouldn't have to tell you anyway thanks to Swiss privacy laws. But you don't have to dig too deep to find that, like other Swiss gold refineries, MKS PAMP is no stranger to illicit gold sourced from Africa or other conflict-affected regions.
For many of those shiny new gold bars rebranded in Switzerland - as were those smelted and recast from the jewelry and gold fillings pried from the teeth of the Nazi SS's victims - under that "Essayeur Fondeur" Swiss authenticity stamp lies a long, bloody trail of death and tears.