New investigation reveals Russia has exported over 100 tons of gold in the past two years via its satellite state.

Following the 2022 U.S. embargo on Russian gold in response to Moscow’s aggression in Ukraine, global markets for Russian gold - the country's largest non-energy export - have rerouted.

Armenian companies, backed by influential politicians and business figures, are helping Russia circumvent Western sanctions on gold, a joint investigation by The Insider and Hetq has revealed.

Officially, the U.S. sanctions only prohibit imports into America, but the restrictions also deter banks globally from trading gold linked to Russia.

As Western markets closed, Russia’s gold trade moved eastward, primarily to the UAE, Hong Kong, and Turkey. By April 2023, however, exports outside the Eurasian Economic Union (EAEU) ceased entirely. Around the same time, Armenia emerged as a significant intermediary, re-exporting Russian gold on an unprecedented scale.

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Russian businesses are exploiting Armenia’s lack of export duties on gold and the ability to trade through private entities, bypassing international sanctions. Meanwhile, cash and securities appear to be flowing in the opposite direction - from the UAE to Armenia, the findings show.

A gold flow rivaling Armenia’s economy

According to Russian customs data, Armenia imported 89 tons of gold from Russia, valued at $5.2 billion, between 2022 and 2024. Armenian customs data indicates an even higher figure: 111 tons worth $6.2 billion in just 2023 and the first half of 2024.

To put this in perspective, Armenia’s total imports across all sectors in 2022 amounted to $11 billion, while its GDP stood at $19.5 billion.

The discrepancies between Russian and Armenian customs figures likely stem from reporting timelines, but the overall scale highlights a flow of wealth rivaling Armenia’s economic output.

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The investigation has identified a number of Armenian companies importing Russian gold with ties to influential figures. Among them are the Yerevan Jewelry Factory, Armenia’s third-largest importer that is linked to an MP; TB Arm, Armenia’s largest gold importer; Diamond Standard and Win-Gold.

By 2024, Armenian banks began distancing themselves from these transactions, leaving private companies to dominate the trade.

The investigators also found that despite significant imports, Armenia’s jewelry industry cannot account for such volumes of gold. Jewelry exports grew steadily - from $26 million in 2020 to $499 million in 2023 - but this rise pales in comparison to the scale of gold imports. The bulk of imported gold is instead re-exported, primarily to the UAE, with smaller amounts sent to Hong Kong and China.

Duty-free operations

Armenian customs data from 2024 shows a record 59 tons of gold valued at $4.1 billion exported in just the first half of the year. These figures underscore Armenia’s role as a transit hub rather than a destination for Russian gold.

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Armenia’s status as a member of the EAEU allows it to bypass Russia’s export duties on gold. Russian businessmen transport gold to Armenia for re-export, benefiting from Armenia’s duty-free system.

Cash and securities also flow into Armenia, potentially as payments for gold. Data from the Observatory of Economic Complexity (OEC) highlights a $1.45 billion inflow of “cash and bonds” from the UAE in 2022, further suggesting a financial loop linked to gold trading.

Armenia’s Ministry of Economy has acknowledged the potential for secondary sanctions due to its role in exporting embargoed Russian gold. However, no such penalties have been imposed yet.

Recent data indicates a decline in gold imports and exports starting in May 2024, following a peak earlier in the year. Whether this trend reflects market saturation, increased scrutiny, or other factors remains unclear.

While Armenia benefits economically in the short term, the long-term risks of secondary sanctions loom large. Russian gold sales are likely to intensify as the West has started transmitting frozen Russian assets to Ukraine. 

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