evidencity

The Iran conflict is funding Russia’s war machine

Mon, 27 Apr 2026 10:57:36 GMT

Oil prices spiked $30 a barrel the day the bombs fell. For Gazprom, Rosneft, and Lukoil, a windfall followed. For the regulators trying to stop Russian war revenue faced a familiar problem: the money is moving, and they can’t see where.

by Evidencity | AI Assisted | 100% Human Verified

The US-Israeli war in Iran pushed the price of Brent crude to an average of $100 a barrel in March, according to an analytical baseline used by Rystad Energy and Global Witness to model windfall profits. Russia’s Urals crude averaged USD 94.5 per barrel that month, a 67% month-on-month rise, and oil export revenues into the Kremlin’s coffers hit $840m a day in March , 52% higher than February, according to analysis by the Centre for Research on Energy and Clean Air.

Gazprom, Rosneft, and Lukoil, three companies that collectively sit at the heart of Russia’s state energy apparatus, are on track to collect an estimated $23.9bn in Iran-related war profits by the end of 2026, according to Rystad Energy data. That figure represents profit above and beyond their baseline earnings: unearned revenue generated by the geography of a conflict 2,000 kilometres from Moscow.

The money flows directly into a Kremlin war chest that continues to fund Russia’s grinding offensive in Ukraine. On paper, it looks like a corporate windfall; in practice, it is a war financing mechanism, and one that sanctions regimes on both sides of the Atlantic have so far failed to shut down.

Architecture built to outlast enforcement

All three companies are sanctioned. The US Treasury’s Office of Foreign Assets Control added both Rosneft and Lukoil to the SDN list on October 22, 2025. The EU imposed a full transaction ban on Rosneft and Gazprom Neft. But there is architecture in place to survive exactly this type of sanctioning regime. It lies in the intermediary layer.

The critical enforcement mechanism, secondary sanctions on third-country buyers and intermediaries doing business with designated entities, has not been systematically deployed. The pattern is established: after earlier sanctions rounds, designated companies restored sales volumes through intermediary traders, and no significant secondary sanctions were imposed on their partners. This way the oil profits keep moving.

This is the product of deliberate corporate architecture: ownership structures and trading entities designed to create legal and jurisdictional distance between the sanctioned parent and the transaction that matters.

Lukoil’s UAE-registered subsidiary, Litasco Middle East DMCC, offers an instructive example. The entity was separately sanctioned by the EU as part of its 19th Russia sanctions package, but only after it had already served its function as a clean-looking intermediary in a jurisdiction with lighter oversight. Meanwhile, OFAC general licences authorising limited, time-bound transactions involving certain Lukoil entities outside Russia and in Bulgaria were extended as recently as April 14, 2026 , a sign of how carefully regulators have had to manage the unwinding of a company with deep roots in non-Russian retail and refining markets.

The result is a fragmented, jurisdiction-divergent environment where enforcement lags are structural rather than incidental. Russian crude continues flowing to buyers in Asia and Africa through intermediary chains that are difficult to trace and harder still to sanction without triggering secondary effects that Western governments, acutely conscious of fuel prices, have been reluctant to risk.

The IEA’s head, Fatih Birol, has called the Iran war the biggest shock ever to global energy markets. The shock has been good for Russia.

Intermediaries Continue to Present a Glaring Concern

For corporate counsel and compliance professionals, the SDN listing should be the beginning of the analysis, not the end of it. The risk lies in the layers beneath: the intermediary trading entities, the offshore subsidiaries, the shadow fleet operators providing maritime logistics for Russian crude, and the transactions that connect them to counterparties that, on the surface, look clean.

The EU’s proposed windfall tax on oil company profits, backed by five EU member states (Austria, Germany, Italy, Portugal, and Spain) and modelled on the 2022 gas crisis mechanism, will force regulators to look harder at where these profits actually sit and who controls the entities collecting them. That scrutiny is overdue. It will also be difficult: the 2022 mechanism struggled to reach profits routed through offshore trading structures, and the current architecture is no simpler.

This is precisely the problem that Evidencity’s Illicit Network Intelligence (INI) is built to address. Mapping the second and third-tier entities that sit between a sanctioned parent and a seemingly legitimate transaction requires forensic network intelligence at scale because the $23.9bn flowing toward Gazprom, Rosneft, and Lukoil this year will not travel in a straight line.

The war in Iran handed Russia a windfall. The structures built to collect it were ready long before the first bomb fell.

The helium your chip supplier just bought may have come from Russia

Mon, 20 Apr 2026 11:37:22 GMT

Iranian strikes on Qatar’s gas terminals have knocked out a third of global helium supply. The scramble for alternatives is opening a sanctions exposure that big data-driven screening tools were never designed to detect.

by Evidencity | AI Assisted | 100% Human Verified

On 2 March 2026, Iranian drones struck two facilities simultaneously: a water tank at Mesaieed Industrial City and an energy installation at Ras Laffan Industrial City, 80 kilometres northeast of Doha. QatarEnergy , the world’s largest LNG producer, immediately ceased production of liquefied natural gas and all associated products. European wholesale gas prices surged almost 50 percent within hours, the biggest single-day jump since Russia’s invasion of Ukraine four years earlier.

On 18 March, Iran struck again. Qatar’s Foreign Ministry condemned the attack as causing extensive damage to Ras Laffan, a flagrant violation of state sovereignty and a direct threat to national security. QatarEnergy’s CEO Saad Sherida al-Kaabi confirmed that 17 percent of Qatar’s LNG export capacity had been destroyed, and that repairs would take three to five years.

Most coverage has remained focused on oil and gas prices. Almost nothing has been written about helium.

Helium is a byproduct of LNG production. Qatar accounted for roughly one-third of global supply in 2025. There are three helium plants at Ras Laffan, two of which produce helium from LNG waste gas. When the Strait of Hormuz closes and LNG storage tanks fill, those plants shut down. The specialised containers used to transport liquid helium hold it for 35 to 48 days before it boils off and escapes. Prices have doubled since the war began. Airgas, one of the world’s largest distributors, has declared force majeure and cut customer shipments by half.

Under current semiconductor manufacturing processes, there is no viable replacement for helium to cool wafers, according to Jong-hwan Lee, a professor of semiconductor devices at South Korea’s Sangmyung University. Chipmakers use it to control wafer temperature during the etching process that prints the circuitry inside every advanced chip powering AI infrastructure. South Korea, home to Samsung and SK Hynix, the world’s two largest memory chipmakers, sourced roughly 65 percent of its helium from Qatar last year.

The supply crisis is visible. The sanctions exposure it is generating inside corporate supply chains is not.

Three of four producers, effectively off the table

The helium market has four major producers: the United States, Qatar, Algeria, and Russia. With Qatar offline and the Strait of Hormuz closed, three of the four are now effectively unavailable to Western buyers simultaneously.

Algeria’s output is modest, insufficient to compensate for the Qatari gap. The United States, now the largest single producer at roughly 81 million cubic metres annually, is ramping domestic output, but industry analysts are unambiguous: American supply cannot replace one-third of global production on any near-term timeline. Semiconductor manufacturers have already indicated they will not meet their 2030 goals , according to Cliff Cain of Pulsar Helium, who told CBS News there is simply no way to boost supplies in the short term.

That pressure is pushing procurement teams toward alternatives. And that is where the sanctions exposure begins.

Russia is the world’s third-largest helium producer, operating primarily through Gazprom’s Amur Gas Processing Plant in Eastern Siberia. Before the Iran war, Russian helium was already moving through global markets at a steep discount, roughly $310 per thousand cubic feet in 2025, against approximately $470 for Qatari volumes, according to S&P Global. The primary destination was China. Russia-to-China helium exports rose 60 percent year-on-year in 2025, according to the Center on Global Energy Policy.

That trade pattern matters because of what Western sanctions have already made explicit. The EU’s 14th sanctions package, adopted in June 2024, introduced a ban on Russian helium imports into the EU, which came into force on 26 September 2024. The stated objective was to prevent new dependencies on Russian supply and to deny Moscow the revenue. For EU-based companies and their supply chains, sourcing Russian-origin helium, directly or through intermediaries, carries live legal exposure.

Two recent developments have tightened the picture further. On 14 April, Russia imposed export controls on helium through end-2027, requiring Prime Ministerial approval for any shipment outside the Eurasian Economic Union. Russian officials framed the measure as a domestic supply priority, but the timing, as spot prices surge following Qatar’s shutdown, points toward a deliberate effort to leverage scarcity. Simultaneously, China announced plans to add domestic capacity , with Russia planning to add a further 700 million standard cubic feet from the third quarter of 2026.

The mechanism through which sanctions exposure enters Western supply chains is indirect but documented. Russian helium, barred from EU markets, flows to China for use in non-semiconductor industrial applications, fibre optics, welding, medical equipment. That displacement frees up helium qualified for semiconductor use from other sources, which then moves through the spot market toward chipmakers scrambling to maintain production lines, according to S&P Global research director Ralf Gubler. The molecule that arrives at a European or American fab carries no label indicating what it displaced or whose revenue it ultimately served.

Procurement teams buying from secondary traders or spot market brokers during a shortage have no automatic mechanism for tracing provenance. Phil Kornbluth, president of Kornbluth Helium Consulting, told CNBC it is getting hard to imagine the world is not facing a minimum two-to-three months of helium production shutdown, followed by a four-to-six month period before supply chains return to normal. That is a long time to be making sourcing decisions under duress, without visibility into the networks behind the supply.

A two-layer risk that standard tools were not built to see

South Korea’s government has flagged helium as one of 14 semiconductor materials now under emergency monitoring, with Samsung and SK Hynix, whose combined output underpins global memory supply, holding stocks estimated to last only until June 2026. TSMC, which manufactures roughly 90 percent of the world’s most advanced logic chips, has said it is monitoring the situation. Neither company has confirmed alternative supply is secured beyond existing inventory.

For corporate counsel and procurement teams at multinationals with electronics or AI infrastructure exposure, the risk calculus has two distinct layers.

The first is operational: a prolonged helium shortage delays chip production, extends lead times, and raises input costs across every product category that depends on advanced semiconductors, from data centre hardware to automotive systems to medical devices. The four largest hyperscalers, Amazon, Google, Microsoft, and Meta, are expected to spend more than $350 billion on capex in 2025 alone, according to KKR, with total AI infrastructure spending projected to climb toward $600 billion in 2026. That capital commitment assumes chip supply. A sustained helium shortage puts the assumption at risk.

The second layer is legal. The EU ban on Russian helium imports has been in force since September 2024. Any EU-based entity whose supply chain, however many intermediaries deep, terminates in Russian-origin helium is operating outside that framework. The opacity of spot market procurement during a shortage is precisely the condition under which that exposure accumulates undetected.

This is the category of risk that big data-driven screening tools do not reach. Automated screening identifies known counterparties at the tier one and tier two supplier level. It does not map the commodity flows and intermediary networks that sit further upstream, determining what a counterparty is actually selling, or where it originally sourced what it is now moving at a premium into a supply-starved market. Evidencity’s Illicit Network Intelligence data is built to trace from source to consumer, following the network behind a transaction rather than working backwards from a named supplier on a contract.

A narrow window before the decisions become permanent

The helium shortage will eventually resolve. American producers are ramping output. New capacity is coming online in Canada and South Africa. The Strait of Hormuz may eventually reopen, it briefly did on 17 April before Iran closed it again within hours, but a negotiated resolution remains elusive, and the ceasefire that expires this Wednesday 22 April offers no guarantee of one. But the sourcing decisions being made right now, under duress, at speed, through brokers and spot market intermediaries that procurement teams have never screened, will outlast the crisis that produced them.

Supply chain exposure does not expire when the emergency does. The contracts signed during a shortage, the intermediaries onboarded to fill a gap, the commodity flows that moved through networks no one mapped, these become the audit findings, the regulatory inquiries, and the enforcement actions of the following year.

The Ras Laffan strikes accelerated a vulnerability that was already present. Corporate supply chains dependent on a single geographic chokepoint for a critical input, and lacking the network-level intelligence to understand alternative sourcing under pressure, were exposed long before the first drone reached Qatar. The Iran war has made that exposure visible, and time-limited.

The Ras Laffan strikes have given corporate counsel and procurement teams a narrow window to ask a question most have not yet asked: do we actually know where our helium comes from, and whose revenues we are sustaining in the process of keeping our production lines running?

Evidencity’s Illicit Network Intelligence data was built to help answer exactly that kind of question.

Washington designated the traders, not the smelter

Wed, 15 Apr 2026 14:19:47 GMT

OFAC sanctioned the Rwanda Defence Force and the Hong Kong traders moving conflict tantalum out of eastern DRC. The mineral passed through both of them on its way to Ulba Metallurgical Plant, a Kazakh state asset, the only tantalum processor in the former Soviet satellite state, and a fixture in the certified supply chains of major Western manufacturers.

On 2 March 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control sanctioned the Rwanda Defence Force and four of its senior commanders for actively supporting M23 rebels in the eastern Democratic Republic of the Congo, seizing territory, taxing coltan mines, and sustaining the conflict mineral ecosystem that has destabilised the region for decades.

The designation landed eight months after OFAC had sanctioned the traders who moved the mineral. By then, the tantalum had already cleared Kigali. It had already been processed in Kazakhstan. It was already sitting in a certified supply chain, disclosed in an SEC filing, carried by an S&P 500 manufacturer, which in turn was protected by an audit that was never designed to ask the right questions.

Evidencity’s Illicit Network Intelligence (INI) mapped every node in that chain before a single sanction landed. The network runs from armed-group-controlled mines in North Kivu, through a UK mining executive and a Swiss businessman under criminal investigation, through two Hong Kong trading companies now on the OFAC list, through a Soviet-era smelter owned by the Kazakh state, and out the other end bearing the stamp of a responsible minerals certification that has never been revoked.

The RMI conformance is real. The minerals are real. Yet liability accumulates because the system in place to certify minerals required to recharge batteries and run AI data centers doesn’t bother to look upstream of a smelter that itself has noted dozens of problems with its own suppliers: particularly those based in the Eastern Congo where men, women and children right now pull rocks out of the earth often under the watchful eye of a young man carrying an automatic rifle.

The cooperative, the traders, and twenty years of documented network

M23 consolidated control of the Rubaya concession in North Kivu, one of the world’s richest coltan deposits, in April 2024. The Rwanda Defence Force, sanctioned by OFAC twelve months later, had provided troops, training, drones, and GPS jamming equipment in exchange for access to mineral-rich territory. By taxing mining operations at sites including Rubaya, M23 was generating an estimated USD 300,000 per month .

Getting that mineral to market required commercial infrastructure. A cooperative. A pair of Hong Kong trading companies. A certification scheme. And individuals who had spent decades building the relationships that made it all work.

Coopérative des Artisanaux Miniers du Congo (CDMC) was the largest operator on the Rubaya concession. Evidencity’s INI records its chairman as John Crawley, a UK-born mining executive and former president (2017-2019) of the Tantalum-Niobium International Study Centre (TIC), the industry body that sets global standards for responsible tantalum sourcing. Crawley simultaneously served as a director of East Rise Corporation, a Hong Kong-registered trading company incorporated in 2011 that received minerals from CDMC and sold them onward to international smelters. A second Hong Kong trader, Star Dragon Corporation, operated within the same network, linked to both Crawley and his long-standing associate, Swiss businessman Chris Huber.

OFAC sanctioned CDMC, East Rise, and Star Dragon in August 2025 for purchasing conflict minerals from militia-controlled territory and materially supporting an armed group. The designation confirmed what UN Group of Experts reports had documented for years. East Rise had purchased over 50 tonnes of coltan from its DRC sources in May and August 2024, after M23’s seizure of Rubaya, and sold those minerals onward. Crawley has denied any connection to illicit sourcing. As of this writing, he has not been sanctioned.

The Huber thread runs deeper and older. Evidencity’s INI identifies Chris Huber as a Swiss businessman under criminal investigation by Swiss prosecutors in Bern for war pillaging and business ties to Rwandan-backed militias during the Second Congo War (1998–2003) — a case that ended in acquittal on appeal in January 2026. Huber has consistently denied any involvement in illicit mineral trading. Through two Rwanda-based companies, Rudniki and Tawotin, Huber controlled approximately a quarter of Rwanda’s coltan export market at his peak. Together they functioned as the laundering mechanism: Congolese coltan smuggled across the border, reclassified as Rwandan origin, retagged through the ITSCI traceability scheme according to Global Witness , and re-exported as conflict-free. In 2020, Rwanda declared 3T mineral exports worth USD 800 million against an estimated domestic production of just USD 20–40 million. Yes, you read that correctly.

East Rise drew on both channels. According to INI data, the company received minerals from Rudniki, Tawotin, and Wolfram Mining and Processing, all Huber-linked Rwandan exporters, before routing them onward to Ulba.

The third figure in the network is less well known but no less significant. Simeon Briskin is a Russian entrepreneur described in Evidencity’s INI as “a notorious figure in the underworld of international mining.” He served as an adviser to former President Gorbachev, had established commercial links to Ulba Metallurgical Plant, and co-invested with Huber in Rudniki around 2006, approaching Czech geologist Jerry Fiala, Rudniki’s founder, and buying into the company on the condition that it sell exclusively to Niotan Inc., a US tantalum powder producer in which Huber held shares, and Crawley served as director. According to Fiala’s own testimony, Briskin told him the end goal was to sell Rudniki to Ulba for $2–3 million. Between 2007 and 2014, Huber and Briskin progressively diluted Fiala’s shareholding until he lost control entirely. Tax, banking, and production documents obtained by Fiala show that over $150 million in minerals moved through Rudniki in that period, volumes that far exceeded its actual production capacity.

This architecture predates the most recent sanctions by a generation. Evidencity’s INI flags Eagle Wings Resources International, a Rwanda-based coltan comptoir with documented ties to the Rwandan regime, as having exported conflict-linked coltan directly to Ulba as far back as 2002 , per a UN report. The same smelter. A different network. Two decades earlier.

A Kazakh state asset with 117 “incidents”

Ulba Metallurgical Plant JSC was commissioned in 1949 in Ust-Kamenogorsk, in what was then Soviet Kazakhstan. It was built as a nuclear facility and processed uranium for the Soviet weapons programme. In November 1994, approximately 600 kilograms of weapons-grade uranium were removed from the plant to the United States under Project Sapphire, a classified operation to prevent the material falling into the wrong hands after the Soviet collapse.

Today, Ulba processes tantalum. It is a wholly owned subsidiary of NAC Kazatomprom JSC, the world’s largest uranium producer, majority-owned through Kazakhstan’s sovereign wealth fund Samruk-Kazyna, whose sole shareholder is the Government of Kazakhstan. At the top of the ownership chain sits President Kassym-Jomart Tokayev, who has spent his tenure constructing what Astana calls a “multi-vector” foreign policy: $17 billion in agreements signed with Washington in November 2025, a comprehensive strategic partnership declaration signed with Moscow the same month, and nuclear power plant contracts awarded simultaneously to Russia’s Rosatom and China’s CNNC, companies sanctioned by Ukraine and the U.S., respectively. Kazatomprom’s own governance history is not unblemished: its former president, Mukhtar Dzhakishev, was sentenced to 14 years in prison in 2010 for theft and corruption related to uranium contracts, including the sale of uranium assets to Rosatom. He served 11 years before parole.

Ulba accounts for approximately 12% of total global tantalum supply and holds RMI Smelter ID CID001969 . It is the only tantalum processor in this former Soviet satellite state and appears in a large number of certified supply chains. Manufacturers sourcing tantalum through the former Soviet republics have little to no “conformant” alternative. Its RMI conformance is real. Its audit trail is documented. And its own Responsible Minerals Assurance Process (RMAP) audit reported 117 high-risk incidents in a single reporting period, all related to tantalum sourced from or transported through Conflict-Affected and High-Risk Areas. Ulba reported that it chose to continue trading with all relevant suppliers.

The connections to the network run long. Evidencity’s INI records that Eagle Wings Resources International, a Rwanda-based coltan comptoir with documented ties to the Rwandan regime and flagged for mineral laundering, exported conflict-linked coltan directly to Ulba as far back as 2002, per a UN report .

The most recent documented purchases are more direct. In May and August 2024, after M23 and the Rwanda Defence Force had consolidated control of the Rubaya mines, Ulba imported over 50 tonnes of coltan from East Rise Corporation. East Rise was designated by OFAC in August 2025. Ulba was not. Its RMI conformance was not reviewed. Its smelter ID remains active on the conformant list.

When a major S&P 500 electronics manufacturer filed its 2024 Conflict Minerals Report with the SEC on 29 May 2025, it listed Ulba Metallurgical Plant JSC as a confirmed tantalum smelter in its supply chain. The filing acknowledged an increased number of high-risk smelters compared to prior years, attributing this directly to government sanction-related activity. It acknowledged it could not determine the origin of all conflict minerals in its products with absolute assurance. Remediation, it said, would take time.

The filing is compliant. RMI conformance at the smelter level does not screen for what the smelter bought, from whom, and when. The minerals moved. The certification held. The filing is now public record, and so is the purchase trail that sits behind it.

Two tracks, no mechanism connecting them

On 2 March 2026, the same day OFAC designated the Rwanda Defence Force, Congo’s mines minister was finalising the approval paperwork for the sale of Chemaf SA, owner of two significant copper and cobalt operations in Haut-Katanga, to Virtus Minerals, a Delaware-registered firm led by veterans of American military and intelligence services. The approval was signed thirteen days later, under the banner of a December 2025 US-Congo strategic minerals partnership backed directly by the National Security Council (NSC) and the State Department.

Copper and cobalt are not 3TG minerals. Chemaf sits in a different supply chain, a different province, a different disclosure regime. The deal is not the story. The timing reveals the environment in which the tantalum sanctions landed: Washington simultaneously designating Rwanda’s military for sustaining conflict mineral networks in North Kivu and lobbying Kinshasa to approve a strategic asset acquisition in the same country, on the same timeline, without a visible mechanism connecting the two decisions. Treasury was acting on one track. State and the NSC were acting on another. While the tantalum track suffered from the illusion of compliance, the copper-cobalt track appears to proceed with a near total absence of accountability.

For corporate counsel and due diligence professionals, the architecture documented here raises a question that goes beyond any single filing or designation. Every entity in this chain held something clean on paper. CDMC operated under ITSCI certification. East Rise purchased from certified exporters. Ulba remains on the conformant list. The S&P 500 manufacturer’s conflict minerals report is publicly filed and formally compliant. From 2017 to 2019, John Crawley held the presidency of the Tantalum-Niobium International Study Centre (TIC), the industry body that sets responsible sourcing standards. James Kabarebe, the Rwandan defence minister sanctioned by the United States in February 2026 and alleged by Global Witness to have co-founded the ITSCI scheme alongside minerals trader David Bensusan, held a cabinet position and allegedly gained personally from smuggling conflict minerals while the mechanism he helped construct was certifying the minerals moving through it.

None of this is visible to entity-based screening. Screening checks names against lists. It does not map the relationships between a UK mining executive chairing a DRC cooperative while directing a Hong Kong trading company. It does not connect a Russian entrepreneur’s commercial links to a Kazakh state smelter to his co-investment in a Rwandan vehicle that laundered $150 million in Congolese minerals. It does not flag a certified smelter’s purchase of 50 tonnes of coltan from a trader operating out of mines under armed group control, because the purchase occurred before the designation, and the certification was never revisited after it.

The exposure accumulates at the downstream end. Manufacturers who source tantalum through Ulba are sourcing through a state asset embedded in a geopolitical balancing act, with a documented 20-year history of purchases from conflict-linked traders and 117 self-reported high-risk sourcing incidents in a single audit period. Their conflict minerals reports may be compliant. Their supply chains carry risk that compliance documents are structurally incapable of surfacing.

Evidencity’s INI mapped the full entity network, including Crawley, Huber, Briskin, CDMC, East Rise, Star Dragon, Rudniki, Tawotin, Eagle Wings, Ulba, and Kazatomprom, tracing their connections to downstream S&P 500 manufacturers, before a single OFAC designation landed. The INI does not wait for a sanctions list to identify a risk. It maps the network. The designation confirms what the network already showed.

The gap between what sanctions reached and what certification still covers is a structural feature of an outdated due diligence architecture that was built to disincentivize a look this far upstream.

China-EU Tug of War

Mon, 13 Apr 2026 13:22:52 GMT

Two regulatory forces are moving in opposite directions. Beijing is restricting how supply chain data can be collected. Brussels is raising the evidentiary standard for what that data must prove. Enterprise screening platforms are caught in the middle.

In September 2024, China’s Ministry of Commerce opened an investigation into PVH Corp, the New York-based parent of Calvin Klein and Tommy Hilfiger, for suspected “discriminatory measures” against Xinjiang cotton. The company had stopped sourcing from the region, as US law, specifically the Uyghur Forced Labor Prevention Act, effectively required it to. By February 2025, PVH had been added to China’s Unreliable Entity List, a designation that can restrict trading rights, impose fines, and revoke staff work permits.

PVH was complying with one government’s law while being penalised by another government for the same act. This is not a case of poor compliance management or a documentation gap that better software could have closed. It is the structural condition that global supply chains with China exposure now face, and it is getting sharper, not softer.

The EU’s Corporate Sustainability Due Diligence Directive, entering its national transposition phase with enforcement beginning in 2028, extends the evidentiary demand further still. The CSDDD does not require a flag in a screening system. It requires documented, auditable evidence of supply chain conditions across every tier of a company’s chain of activities. For companies sourcing from or through China, that evidence has to come from somewhere. The tools most compliance teams rely on to find it are becoming legally constrained on one side and evidentiarily insufficient on the other.

Where the data went

PVH’s predicament is not unique. It is, however, unusually visible. Most companies with China supply chain exposure face a quieter version of the same problem: they cannot get the intelligence they need through the channels they have been using, and the channels that remain are producing less than they used to.

The reason is structural and documented. In late 2022, acting on instruction from the Cyberspace Administration of China, Wind Information, China’s dominant financial data provider covering more than 200 million enterprises and 270 million legal representatives, began restricting offshore users from accessing corporate registry data. Shareholding structures, ultimate controllers, affiliate relationships: the governance layer that underpins entity risk assessment. By May 2023, that access was closed. The corporate databases Qichacha and TianYanCha followed. China’s main academic database, CNKI, cut overseas subscriber access in April 2023.

These are the feeds that enterprise supply chain screening platforms draw on to build entity profiles for Chinese companies. When those feeds are restricted, surface data is all that remains: names, addresses, registration numbers. The ownership structures and affiliate relationships that produce meaningful risk differentiation are gone.

The enforcement signal arrived in parallel. In March 2023, Chinese authorities raided Mintz Group’s Beijing office, detaining five local employees. The firm was subsequently fined approximately $1.5 million for conducting foreign-related statistical investigations without the necessary approvals, work that had reportedly included due diligence on forced labour exposure in Xinjiang-linked supply chains. Bain & Company had computers and phones confiscated at its Shanghai office the following month. Capvision, an expert network firm, was raided in a nationally televised action in May. Two senior executives at international due diligence firms told Reuters that Chinese security officials had explicitly warned their firms off certain areas of inquiry, naming Xinjiang directly.

The July 2023 revised Anti-Espionage Law codified what enforcement had signalled. The definition of espionage was expanded to cover all documents, data, materials, and items related to national security and interests, a scope broad enough, the US Ambassador to China observed, to potentially make illegal the mundane activities a business would have to undertake, such as diligence prior to an investment.

Then came April 7, 2026. China’s State Council published Regulations on Industrial and Supply Chain Security, effective immediately, creating an investigation and countermeasures framework directed at foreign entities conducting supply chain research and data collection that Chinese authorities deem excessive or aimed at exposing strategic vulnerabilities. Morgan Lewis, advising clients days after publication, recommended reviewing existing supply chain due diligence protocols conducted in China and seeking legal review before launching new audits or data collection exercises.

The trajectory is consistent. The data access restrictions of 2022 and 2023 narrowed what automated platforms could collect. The enforcement campaign demonstrated the legal risk of in-country investigation. The Anti-Espionage Law expanded the legal basis for that risk. The April 2026 regulation formalised it into a supply chain-specific framework. Each step has moved in the same direction.

The tool that fails both tests

Enterprise supply chain screening platforms are built on a single architectural premise: aggregate data at scale, run algorithmic matching against sanctions lists and adverse media, generate a risk score. The pitch is global coverage, hundreds of millions of records across hundreds of countries, continuously updated, instantly queryable. For many compliance use cases, in many jurisdictions, that architecture works tolerably well.

China is where it breaks down.

On the collection side, the registry data that underpins Chinese entity profiles is no longer available to offshore automated systems. Scraping tools can reach surface data only. Ownership structures, ultimate controllers, affiliate networks, the intelligence that differentiates a clean supplier from one routing through a sanctioned intermediary, sit behind access restrictions that the CAC has enforced and the April 2026 regulation now formally prohibits attempts to circumvent. A platform claiming ten billion supply chain records still has Chinese entities in its database. The question is what those records actually contain, and how recently the governance layer beneath them was last accessible. For offshore automated systems, the answer is 2022.

On the disclosure side, a risk score is not evidence. UFLPA’s rebuttable presumption requires importers to provide clear and convincing proof that goods have no Xinjiang nexus: not a platform output showing elevated risk, but primary-source documentation of the actual supply chain. CSDDD requires auditable evidence that adverse human rights and environmental impacts have been identified and addressed across the entire chain of activities. A flag in a compliance dashboard is the start of that inquiry, not the answer to it. CBP detained shipments at a rate of 428 per month through 2024, a 25% increase on the prior year, and denied entry to 47% of detained goods. The companies caught were not companies that had failed to run a screening tool. They were companies that could not produce the documentation regulators demanded.

KPMG found that 68% of companies surveyed were reviewing only their tier-one and tier-two suppliers, leaving the upstream tiers, where forced labour risk concentrates, in the dark. Screening platforms are designed to process known entities against known lists. They are not designed to trace tier three or tier four of a Chinese industrial supply chain, where registry data is restricted, ownership structures are opaque, and the enforcement environment makes automated data collection legally constrained.

PVH did not end up on China’s Unreliable Entity List because its compliance platform failed. It ended up there because it was following one government’s law while the other government penalised it for doing so. No screening tool resolves that. Resolving it requires intelligence precise enough to understand the actual exposure, produced through a methodology that is legally defensible on both sides of the border.

Research where scraping cannot go

The methodology that survives both sides of this regulatory environment is not a larger platform. It is a fundamentally different one.

The distinction is between scraping and research. Scraping is automated, volumetric, and dependent on open data access, the architecture that China’s regulatory tightening has been systematically closing since 2022. Research is curated, source-specific, and built on relationships: local specialists who know which registry requires what kind of access, which enforcement record exists in which ministry system, which corporate structure in which jurisdiction reveals the beneficial owner the mainland filing conceals. That knowledge is not a product of algorithmic aggregation. It accumulates through years of investigative work, applied by people operating from outside China.

Jurisdictional distance matters in a way that enterprise platforms cannot replicate. Researchers working from Singapore, London, or Hong Kong, accessing external-facing documentation through legally available channels, operate in a materially different legal environment from the in-country investigators who faced detention under the Anti-Espionage Law, or the automated systems the April 2026 regulation now explicitly constrains. The intelligence they produce is not collected through methods that trigger the regulatory framework that closed the scraping channel. It is collected through the investigative journalism methodology that built the Xinjiang exposure record in the first place: The New Yorker, The New York Times, Der Spiegel. The reporting that made PVH’s compliance position defensible before US law was not produced by a screening platform. It was produced by reporters and researchers with long-cultivated source networks, working carefully, from safe jurisdictions.

This is the foundation on which Evidencity’s Illicit Network Intelligence is built: research partnerships with China specialists carrying decades of on-the-ground knowledge, applied from outside the country; curated intelligence from trusted local sources who know how to operate legally within Chinese systems; and a growing network of China-focused research teams who share data across jurisdictions. Wind and Qichacha have been closed to offshore users since 2023. The INI does not depend on them.

The INI is not the breadth of an enterprise platform. It offers precision over volume, auditability over coverage. The tantalum supply chain running from armed-group-controlled mines in North Kivu through Hong Kong traders to a Kazakhstan smelter and into the conflict minerals disclosures of S&P 500 companies was traced without a single automated data pull from a Chinese domestic registry. It required knowing where Chinese-linked networks surface in external-facing documentation, OFAC designation records, UN Panel of Experts reports, SEC conflict minerals filings, offshore corporate registries, and having the investigative depth to connect what those documents reveal. That is the intelligence that holds up when documentation is demanded. It is also the intelligence the April 2026 regulation cannot reach.

The compliance question that has changed

PVH will not be the last company caught between two legal systems pulling in opposite directions. The American Chamber of Commerce in China said as much when the investigation was announced: companies in every sector were watching the case and conducting risk assessments of their own. That calculation has only grown more complex since. The April 2026 regulation extends the legal constraint on supply chain data collection beyond individual enforcement actions into a formal national framework. The CSDDD transposition deadline moves closer. CBP’s detention rate continues to rise.

Multinationals are not choosing between compliance and China. Most cannot afford to exit a market that represents, for many, their largest or fastest-growing revenue base. The choice they face, whether they frame it that way or not, is between a compliance methodology that is becoming legally constrained on the collection side and evidentiarily insufficient on the disclosure side, and one built for the regulatory environment both governments are now creating.

The scraping model was designed for a world where data flowed freely across borders and volume was a proxy for quality. That world has not existed in China since 2022, and the April 2026 regulation confirms it is not returning. A better algorithm will not replace it. The replacement is careful, relationship-built, jurisdictionally aware research of the kind investigative journalists have always used to understand opaque systems, now applied systematically to the supply chain intelligence that corporate counsel, procurement teams, and ESG investors increasingly need to demonstrate they have done their job.

The question compliance teams face must go beyond the risk score to “where” and “how” regarding intelligence on their Chinese supply chains. Was the data legally collected, and will hold it up when someone asks for the documentation?

Your supplier's environmental audit was written by your supplier

Mon, 06 Apr 2026 12:23:13 GMT

Companies sourcing from Indonesia's nickel sector rely on sustainability disclosures written by the companies they are auditing. When the evidence of contamination lives in an internal email rather than a published report, standard due diligence and adverse media screening has no mechanism to find it.

By Evidencity | AI Assisted | 100% Human Verified

In March 2023, Indonesian nickel giant Harita Nickel hosted a fishing tournament near Kawasi village on Obi Island. Locals competed for fresh catch beneath a large corporate banner. The company’s then-director of external relations issued a press release declaring that “good quality fishes are still widely available in the Kawasi waters.”

The press release did not mention that Harita had commissioned a marine study the previous year that found dangerous levels of lead and cadmium in fish in the same waters. An internal email from a Harita marine environmental manager recommended keeping the full study “for internal use only.” Sections detailing safe weekly consumption limits were deleted. References to water quality data showing lead, cadmium, mercury and other pollutants exceeding standards were softened or removed. The shortened version published by IPB University concluded the fish were “safe for consumption.”

Harita cited that edited version in its 2022 and 2023 sustainability reports. Two months before its April 2023 stock exchange listing, internal data showed nickel levels in fish had risen ninefold.

Evidencity has been tracking Indonesia’s nickel expansion since 2023, when we documented the worker death toll, the Chinese investment networks, and the political relationships underpinning the industry’s rapid growth . The country now accounts for over 60% of global nickel production, more than every other producer on earth combined. The Harita case reveals the next layer down, moving beyond the reality that this sector operates with weak oversight, to companies that actively manage the evidence of harm before it reaches the supply chain.

How the evidence disappears before it reaches your desk

Harita’s approach follows a pattern Evidencity’s analysts recognise across extractive industries operating in under-regulated environments: commission the study, control the findings, publish the summary.

An investigation by The Gecko Project, an independent outlet specialising in environmental crime and corporate accountability, obtained internal Harita documents that tell a different story. The full marine study by Professor Etty Riani of IPB University found lead levels in fish from Kawasi village at more than 1.5 times Indonesia’s FDA limit for processed fish products. In the village of Soligi, 12 kilometres along the coast from Harita’s mining site, a locally eaten reef fish carried nearly three times the limit. The study recommended limiting consumption of several species, particularly for children, to reduce heavy metal exposure. That recommendation was deleted before publication.

The edited version that replaced it was cited in Harita’s 2022 and 2023 sustainability reports as evidence that fish were safe to eat. It was cited again in Harita’s response to the Indonesia Stock Exchange ahead of its April 2023 IPO. Indonesian capital markets law requires disclosure of material information that could influence investors’ decisions. A Bali-based lawyer told the Gecko Project that evidence of heavy metal contamination in fish would likely qualify. It was not disclosed.

This was not a single lapse. In 2019, a Harita-commissioned report had already found cadmium in snapper and grouper at up to 17 times the Indonesian regulatory limit. In 2021, the company dramatically expanded its mining operations on Obi Island, opening a new processing plant. By February 2023, two months before the IPO, a marine environmental manager noted internally that nickel in fish had risen ninefold. A week later, a colleague flagged new testing as a “rush hour” priority. No further internal communications or data were found after that point.

Meanwhile the fishing tournament proceeded. The press release went out. The sustainability report was filed.

This is the operating environment that Tesla, Volkswagen, Toyota, BMW and Ford are sourced into. Harita exports nickel from Obi Island to battery material companies that supply these manufacturers directly. None responded to the Gecko Project’s request for comment on the contamination findings. Honda said it has zero tolerance for environmental harm. BMW said it had contacted suppliers to address the allegations. The rest said nothing.

The contamination data existed. It was commissioned, reviewed, edited and filed, internally. Your supplier’s audit would not have found it, because your supplier’s audit was written by the supplier.

A clean screening result and the gap it cannot cross

In 2022, Evidencity profiled a nickel processing company operating in Indonesia’s Morowali industrial complex. The screening returned no sanctions, no regulatory enforcement actions, no adverse connections, no litigation. By every standard metric, the company was clean. The same profile documented a community protest over environmental damage and the absence of any prior consultation before mining permits were issued. Those findings appeared under “adverse media.” They did not move any of the risk indicators.

Screening tools are built to find disclosed, formal, registered risk. A suppressed internal study is none of those things. An edited consultant’s report filed away from regulatory view is none of those things. The gap between a company’s disclosures and its internal documents is precisely the gap that standard adverse media screening cannot cross.

That gap is now carrying legal weight. In early 2026, two rulings, the Dyson supply chain decision and the Rubicon case, dismantled defences that multinationals have relied on for decades . Courts are now asking whether companies had reasonable means to know about supplier misconduct. Sustainability reports citing edited studies, and screening tools that return clean results on companies with documented community complaints, are unlikely to satisfy that standard.

For procurement teams and corporate counsel sourcing from Indonesia’s nickel sector, where production now accounts for over 60% of global supply, and where Evidencity’s own prior reporting documented systemic safety failures and political entanglements across the industrial park network, the Harita case raises a direct question: how many of your supplier’s environmental assessments were written by your supplier?

The audit trail ends where the internal email begins

Harita Nickel is not an outlier. It is an illustration of how environmental evidence is managed in supply chains that move too fast, across jurisdictions that regulate too lightly, for conventional due diligence to keep pace. The fishing tournament is still an annual event. The sustainability reports are still filed. The nickel is still shipped.

Evidencity’s Illicit Network Intelligence (INI) data is built to surface precisely this category of risk, findings that exist in internal documents, community complaints, in-language local sources, and suppressed consultancy reports rather than in the disclosed record that standard screening reads. The Harita case is a demonstration of why that distinction matters. The contamination data was there. It was simply never where your due diligence was looking.

For companies with exposure to Indonesian nickel, whether through EV battery supply chains, consumer electronics, or commodity trading, the compliance question has shifted. Demonstrating that your supplier has no sanctions and a published sustainability report is no longer sufficient. The Dyson and Rubicon rulings have made clear that reasonable means to know is the new threshold. Meeting that threshold requires looking where the disclosed record does not go.

Dyson and Rubicon Cases Reset the Rules

Mon, 30 Mar 2026 10:01:21 GMT

Within five weeks in early 2026, two legal developments dismantled the defenses that multinational companies have relied on for decades.

On February 20, the US Ninth Circuit ruled that companies can face civil liability for attempting to profit from forced labor, even when no transaction is completed. One week later, on February 27, Dyson settled a forced labor lawsuit rather than face discovery demands that would reveal whether it exercised operational control over Malaysian suppliers. The message from both developments is identical: contractual distance no longer equals legal immunity.

For compliance officers and corporate counsel, these cases represent a fundamental shift. The defenses that once worked are collapsing. "We used a subcontractor" won't shield you. "We never completed the sale" won't protect you. Courts are demanding forensic evidence of what companies actually knew, what control they actually exercised, and what due diligence they actually performed.

Dyson chose settlement over producing that evidence.

The Investigation

The Dyson settlement reveals what companies fear most: disclosure. Malaysian migrant workers at ATA Industrial and Jabco factories in Johor alleged they paid recruitment fees exceeding $1,000, had passports confiscated, worked excessive hours, and faced threats of deportation while producing components for Dyson products. After UK courts ruled the case could proceed domestically, Dyson settled on February 27, 2026 , without admitting liability.

The settlement came after years of jurisdictional battles. Workers sued in 2022. The Court of Appeal and Supreme Court both ruled the case could proceed in English courts, rejecting Dyson's argument that Malaysian courts were the appropriate venue. Once that procedural shield fell, Dyson faced the prospect of producing meeting minutes, correspondence, and pre-approval documentation between the company and its Malaysian suppliers.

Dyson never had to produce those documents. The settlement, citing " the expenses of litigation and the benefits of settlement ," ended the case before discovery. But the legal precedent stands: UK courts will exercise jurisdiction over supply chain labor cases, and companies operating through subcontractors can be held accountable for conditions at supplier facilities.

On the other side of the pond, the US Ninth Circuit Court ruling against Rubicon Resources establishes an equally demanding standard. Cambodian workers at Thai seafood processing facilities alleged they were promised good wages and free housing, then underpaid, charged for accommodations, had passports confiscated, and faced arrest for attempting to leave. The abuse occurred between 2010 and 2012. Rubicon argued it never completed purchases from the facilities, and as such, it couldn't be liable.

The court rejected this defense entirely. The February 20 ruling establishes that attempting to profit from forced labor creates liability, regardless of whether transactions are completed. More significantly, the court applied a "knew or should have known" standard - terminology well known by corporate outside counsel. Companies can no longer claim ignorance when red flags were visible.

Both cases demand the same type of evidence: documentation of operational relationships that standard screening misses. In the Dyson case, the company chose to settle instead of producing that documentation. In the Rubicon case, the court examined whether the company conducted an adequate investigation when red flags emerged. Thai seafood processing has been documented as a high-risk sector for forced labor since at least 2010.

This creates a new evidentiary burden. Companies must now prove they mapped their actual supply networks, identified specific risk indicators, properly investigated red flags that emerged, and took concrete remediation steps when necessary.

Scheduled audits and contractual clauses won't satisfy this standard. Courts want evidence of continuous monitoring, ground-truth verification, and response to specific allegations.

The forensic evidence trail courts now demand includes supplier ownership structures, recruitment agency relationships, worker testimony patterns, financial flows between entities, and communication frequency between parent companies and suppliers. This is network-level intelligence, not document-level compliance.

Business Implication

The financial calculus has shifted. Dyson chose settlement over discovery , signaling that the cost of revealing internal supplier relationships (or their lack of information) exceeded the cost of confidential compensation. For corporate counsel, this creates a stark question: What would your internal communications reveal about supplier oversight, your compliance, and procurement procedures? Is your due diligence actually sufficient?

Companies face regulatory enforcement under the UK Modern Slavery Act and US Trafficking Victims Protection Act, reputational damage that affects market valuation, and investor scrutiny from ESG funds demanding supply chain transparency. The Dyson settlement, announced publicly despite confidential terms , generated immediate widespread media coverage. The reputational cost of fighting these cases may now exceed the cost of settling them, especially as consumer sentiment becomes increasingly important.

More significantly, these cases shift the burden of proof. Companies must now demonstrate they have conducted adequate investigations when operating in documented high-risk sectors. Malaysian electronics manufacturing and Thai seafood processing have been identified as high-risk for forced labor for over a decade. The "should have known" standard means ignorance is no longer a defense when sector-specific risks are publicly documented.

Conclusion

These cases represent a coordinated shift across major jurisdictions toward holding parent companies accountable for supply chain conditions they claim not to control. The US Ninth Circuit ruling and UK Dyson settlement, occurring within one week of each other, establish parallel realities: attempting to profit creates liability, and companies will settle rather than reveal their actual supplier relationships.

The invisible risk is now visible to courts. The question is whether it's visible to your due diligence systems. Standard screening tools detect what suppliers choose to disclose. They miss the recruitment networks, financial pressures, and power dynamics that create forced labor conditions.

Evidencity's approach addresses what courts are now demanding: forensic investigation of actual networks, not surface-level, box-checking compliance documentation. RiskSolve capabilities provide ground-truth information that provides a clear picture of true conditions. Evidencity’s Unique Data maps the recruitment agencies and labor brokers that standard audits overlook.

The Dyson settlement establishes the true cost of inadequate due diligence. Companies waiting to adjust their systems are already behind.

Your Palm Oil Supplier was just Replaced by a General

Thu, 19 Mar 2026 09:52:11 GMT

The world's largest palm oil trader has just been convicted of corruption by Indonesia's Supreme Court. The company it supplied its land to has no audit history, no certification, and no prior experience in palm oil. Neither fact appears in any major brand's sustainability disclosure.

by Evidencity | AI Assisted | 100% Human Verified

The Dove soap in your bathroom and the Kit Kat in your desk drawer share a supplier beyond palm oil: Wilmar International, the Singapore-listed trading giant that moves roughly 40 percent of the world's palm oil and anchors the certified sustainable supply chains that Unilever, Nestlé, Colgate-Palmolive, and Procter & Gamble have spent years building.

In September 2025, Indonesia's Supreme Court found Wilmar guilty of corruption — securing palm oil export permits unlawfully during a 2022 cooking oil shortage. The acquittal had been delivered by four judges who were subsequently arrested on suspicion of accepting bribes to reach a favourable verdict. Wilmar had already handed $725 million to Indonesia's Attorney General's Office as a security deposit pending resolution. The plantations behind those certified supply chains — 1.7 million hectares of palm oil land — were simultaneously being transferred to PT Agrinas Palma Nusantara: a company that did not exist as a palm oil operator before March 2025, run by retired military generals, whose president director told parliament at his appointment: "My job used to be to run around and go undercover. But now I'm told to take care of palm oil. This is an honor, a mandate even though I know nothing." Not a single major consumer brand has publicly addressed what this means for the sustainability documentation attached to their Indonesian palm oil.

The Crackdown That Looked Like a Cleanup

Indonesia's palm oil sector entered 2025 appearing to clean up its act. Jakarta launched the most aggressive land governance crackdown in the country's history, seizing more than four million hectares of plantations operating illegally in designated forest zones. Corrupt tycoons faced prosecution. Duta Palma Group's owner had 221,000 hectares confiscated amid a money laundering investigation. Soldiers posted government control notices across Kalimantan and Sumatra on estates that had operated in legal grey zones for decades.

For compliance teams at global consumer goods companies, the signals looked right. Illegal operators removed. Government enforcement visible. Wilmar, the trader sitting between those plantations and the brands, held RSPO certification, a public sustainability dashboard listing its mill suppliers, and a stated commitment to deforestation-free sourcing. Standard screening showed no OFAC sanctions, no Interpol notices.

A Construction Company Now Runs The World’s Largest Palm Oil Operation

Indonesia's palm oil sector is not the first commodity chain the Prabowo administration has restructured through military-state consolidation. Earlier this year, Evidencity documented how PT Timah — the state tin monopoly whose former directors were convicted of laundering $20 billion in illegally mined ore — was handed $420 million in seized private smelters and placed under a retired army colonel by presidential directive. The pattern across tin and palm oil is identical: enforcement used to consolidate control, not create transparency.

Agrinas Palma Nusantara did not exist as a palm oil company before March 2025. Converted from PT Indra Karya, a state infrastructure consultancy, by presidential directive and placed under Danantara — Prabowo's newly created sovereign wealth fund — it became the world's largest palm oil company by managed area within nine months: 1.7 million hectares drawn from 232 private operators whose identities the government declined to disclose. It aims to control three million hectares by 2029.

Agrinas holds no RSPO certification, no track record on labour standards, no independently verified environmental baseline, and no traceability infrastructure. Industry association GAPKI reported that members' harvest proceeds flow entirely to Agrinas accounts with payments to former partners delayed beyond 30 days. Smallholder farmers offered joint venture arrangements retaining only 55 to 60 percent of revenue have largely walked away, leaving plots unmaintained. One cooperative in Kalimantan saw monthly fruit production fall from between 80 and 100 metric tonnes to 23.

The RSPO — the certification body whose standards underpin Wilmar's sustainability claims — issued a holding statement acknowledging the Supreme Court ruling, noting it was awaiting the written judgment to determine whether violations of its Key Documents had occurred. Three of its certified members had just been found guilty of corruption by Indonesia's highest court. The certification framework had no mechanism to have caught it beforehand.

Company Compliance No Longer Matches the Land

The EUDR — requiring palm oil entering EU markets to be deforestation-free and legally produced — has been delayed twice and is now scheduled for enforcement at the end of 2026. Companies used that delay to build traceability documentation anchored to specific operators on specific land. Agrinas now controls that land. Its concession history across 232 unnamed former operators is, by the government's own admission, undisclosed, and the company has submitted to no independent environmental audit. Under EUDR Article 9, operators must provide "adequately conclusive and verifiable information" that products are deforestation-free. Verifying that standard against a military-administered state entity reporting to a sovereign wealth fund, with no independent audit access, is not a compliance exercise — it is an audit impossibility.

EUDR non-compliance carries fines of up to four percent of total annual EU turnover. For a company the size of Unilever, with over €60 billion in revenues, that is a multi-billion euro liability attached to a supply chain that has structurally changed beneath their existing documentation. Fastmarkets estimates between two and five million tonnes of Indonesian CPO production face serious supply uncertainty in 2026 as plantation maintenance collapses under the Agrinas transition.

Opacity by Executive Fiat

Indonesia's palm oil crackdown removed corrupt operators and replaced them with a structure that is harder to audit, not easier. The world's largest palm oil company by area is a military-led state entity created nine months ago from an infrastructure consultancy — without certification, without a disclosed concession history, without independent oversight. Its primary trading partner has just been convicted of corruption by the country's Supreme Court.

The brands whose products reach consumers marked "sustainably sourced" have built their compliance architecture around mill lists, RSPO certification, and trader-level commitments. A presidential decree transferring 1.7 million hectares to retired generals sits outside every framework they have.

Evidencity's Illicit Network Intelligence maps the ownership structures, military connections, and corporate relationships that entity-based screening cannot reach. In Indonesian palm oil in 2026, the risk isn't hidden in a shell company. It's sitting at the top of the supply chain, wearing a uniform.

How Modern Slavery Survives a Court Ruling

Mon, 16 Mar 2026 11:24:18 GMT

Ecuador's Constitutional Court ordered Furukawa Plantaciones to pay $41 million for five decades of forced labour. Fifteen months later, a sister company is shipping the abaca, the victims are facing eviction, and the bill remains unpaid.

By Evidencity | AI Assisted | 100% Human Verified

Ecuador's Constitutional Court ordered Furukawa Plantaciones to pay $41 million in reparations for maintaining slavery-like conditions from 1963 to 2019. The company's response: fire all 342 plaintiffs, pay nothing, and shift operations to a sister entity that conventional screening can't connect.

Trade data from March 2025 shows Mavenz Inc. — Furukawa's Japanese parent company — now receiving abaca shipments from Marca Abacá S.A., not from Furukawa itself. Marca Abacá was founded in 2019 by an attorney who simultaneously served as legal representative for both companies while holding office as Ecuador's Secretary General of the Vice Presidency. In January 2023, Mavenz purchased a 33% stake. By March 2025, Furukawa's workforce had collapsed from 296 employees to 92.

Standard screening flags Furukawa Plantaciones (Risk Score: 100) as sanctioned. Marca Abacá S.A. (Risk Score: 70) registers as a separate legal entity with clean corporate filings.

A Court Victory on Paper

Furukawa Plantaciones C.A. del Ecuador carries a Risk Score of 100 — the maximum rating. The December 5, 2024 Constitutional Court ruling (Sentencia 1072-21-JP/24) found the company guilty of maintaining servidumbre de la gleba (serfdom) for over five decades. The court identified 342 victims who lived in plantation camps without electricity, clean water, sanitation, healthcare, or schools. Children as young as eight worked in the fields. Workers were paid as little as $200 per month through fraudulent lease contracts designed to disguise employment relationships.

The court ordered approximately $120,000 per victim — roughly $41 million total — with enhanced payments for women, minors, elderly victims, and those who suffered amputations. Criminal proceedings for human trafficking remain active. UN human rights experts publicly condemned the company on January 15, 2026. Ecuador's government issued a formal apology in May 2025.

The Japanese parent companies show clean corporate registrations. Mavenz Inc. operates from Tokyo. Sun-Oak Co. Ltd. and Mitsubishi Oji Paper Sales Co. Ltd. continue as active buyers. No sanctions. No Interpol notices.

How a Sister Company Inherits the Business

Evidencity's Illicit Network Intelligence reveals the corporate architecture enabling evasion. The network operates through layered entities sharing executives, ownership, and operational control — relationships invisible to entity-based screening.

Marca Abacá S.A. (Risk Score: 70) was incorporated in Ecuador on October 7, 2019 by Martín Salomón Cabezas Espinosa (Risk Score: 90). According to corporate filings, Cabezas Espinosa served simultaneously as legal representative of three entities: Furukawa's direct parent FPC Marketing Co. Ltd., the newly created Marca Abacá S.A., and — between June 2021 and June 2022 — as Secretary General of Ecuador's Vice Presidency. On January 23, 2023, Mavenz Inc. acquired 33% of Marca Abacá from Filipino national Rodel Amurao Valiente.

Trade data documents the operational shift. ImportGenius records show 183 shipments from Ecuador to Mavenz between 2008 and 2025. The most recent bill of lading, dated March 6, 2025, lists the shipper as Marca Abacá S.A. — not Furukawa Plantaciones. Meanwhile, Furukawa's reported workforce collapsed from 296 employees in 2023 to just 92 by March 2025.

The Japanese buyer network remained intact. Sun-Oak Co. Ltd., owned by Nippon Paper Group through subsidiary Nippon Paper Papylia Co. Ltd., purchased over 3 million kg of abaca from Furukawa between 2020 and summer 2023 — continuing purchases despite public forced labor allegations. Mitsubishi Oji Paper Sales Co. Ltd. bought at least 925,130 kg from 2020 through 2023. Neither company issued public statements addressing the Constitutional Court ruling.

UN experts warned in January 2026 that Furukawa is "reportedly planning to transfer productive land to other agricultural companies," raising concerns that "related parties may be used to evade compliance with the reparations process." Some plaintiffs have reportedly attempted to occupy company land to press for those reparations — and now face eviction.

Why the Shell Game Works

The Furukawa-to-Marca Abacá shift exposes a fundamental gap in corporate due diligence architecture. Entity-based screening checks corporate registrations, sanctions lists, and adverse media. Marca Abacá S.A. passes these checks: incorporated October 2019, tax ID 1793024769001, no sanctions exposure, no adverse media until the March 2025 trade data emerged. The legal entity is separate from Furukawa Plantaciones. The shared ownership through Mavenz Inc. (33% stake acquired January 2023) and shared legal representation through Martín Salomón Cabezas Espinosa exist in corporate filings — but relationship mapping requires connecting entities across jurisdictions and time periods.

The supply chain extends to consumer-facing brands. Nippon Paper Group — Sun-Oak's ultimate parent — manufactures household paper products sold under the Kleenex and SCOTTIE brands. According to the original Evidencity investigation, abaca from Furukawa reached tea companies through intermediate processors: Unilever Lipton purchased at least 100,670 kg of filter paper containing abaca between 2015 and 2016. Good Earth Tea (owned by Tata Consumer Products) bought 19,711 kg of tea bag filter paper in 2018. These purchases flowed through Ahlstrom Chirnside, which phased out Furukawa purchases after forced labor allegations emerged.

Japanese buyers face no enforcement action despite continuing purchases through 2023. Mitsubishi Paper Mills characterised its Furukawa relationship as "former business ties." Nippon Paper Industries declined comment, citing "confidentiality obligations." Meanwhile, UN experts confirmed that Furukawa has engaged in systematic retaliation against plaintiffs — filing unfounded criminal complaints, offering minimal out-of-court settlements, and running a public stigmatisation campaign portraying victims as opportunistic claimants.

No Withhold Release Order has been issued by U.S. Customs and Border Protection targeting abaca. The corporate structure makes the planned land transfer legally straightforward. The human cost remains invisible.

Zero Dollars, Zero Accountability

Fifteen months after Ecuador's Constitutional Court found Furukawa Plantaciones guilty of five decades of forced labor, the company has paid zero dollars in reparations. All 342 plaintiffs were fired. Trade data from March 2025 shows Mavenz Inc. receiving shipments from Marca Abacá S.A. — not from Furukawa itself. The workforce collapsed from 296 employees to 92. Some former plaintiffs attempting to occupy company land to secure their court-ordered reparations now face eviction.

Conventional screening identified Furukawa Plantaciones with a Risk Score of 100. The Constitutional Court ruling is documented. Criminal proceedings remain active. But Marca Abacá S.A., incorporated in 2019 with Mavenz acquiring 33% ownership in January 2023, carries a Risk Score of 70 and clean corporate filings.

UN experts warned in January 2026 that Furukawa "is reportedly planning to transfer productive land to other agricultural companies," raising concerns that "related parties may be used to evade compliance with the reparations process."

Evidencity's Illicit Network Intelligence reveals the relationships that connect Furukawa, FPC Marketing, Mavenz, and Marca Abacá through shared executives and ownership structures. Entity-based screening sees separate companies. Network mapping sees one continuous operation.

How Binance accounts moved USD1 Billion to Iranian Entities

Mon, 09 Mar 2026 09:56:21 GMT

When Binance's own investigators traced nearly $1 billion in cryptocurrency flowing toward an IRGC-linked shadow banking corridor, they did everything right: they mapped the network, briefed senior leadership, cooperated with law enforcement. Then they were fired. The accounts stayed open. This is what compliance failure looks like when it's a feature, not a bug — and why external visibility into executive-linked relationships has become the last line of defense for institutions with crypto counterparty exposure.

by Evidencity | AI Assisted | 100% Human Verified

Internal investigators at Binance had uncovered a shadow banking corridor. Over several months in 2024, they tracked nearly $1 billion in cryptocurrency flowing through two VIP accounts toward "Entity A," a network of seven digital wallet addresses that law enforcement officials identified as part of a financial channel between Hong Kong and Tehran, run by the designated Islamic Revolutionary Guard Corps (IRGC). The corridor enabled Chinese companies to quietly pay for Iranian oil, circumventing U.S. sanctions through layers of crypto transactions that conventional screening tools missed.

One account belonged to Hexa , a Hong Kong firm that moved $500 million in tether stablecoin despite registering with incomplete documentation that was flagged internally. The other was Blessed Trust , which claimed to process bitumen and construction materials, both sectors Binance knew participated in the illicit China-Iran oil trade. Both accounts carried VIP status, reducing trading fees and signaling institutional importance. More concerning is that both had executive connections. Internal Telegram chats showed Blessed Trust's representative identified as "Karry…friend of Rock," referring to "Rock" Davis, a Binance executive. A Binance VIP client manager later wrote, "Karry the big shot, haha. Boss Rock has mentioned you before."

The investigators flagged the activity that had generated 14 sanctions alerts on the Blessed Trust account alone. They briefed senior leadership, including CEO Richard Teng and Chief Compliance Officer Noah Perlman, in October 2024. The FBI and IRS made inquiries about Blessed Trust, with the IRS specifically citing money laundering concerns.

Then Binance made a choice. On November 13, 2024, the company suspended the lead investigator and the head of sanctions and counterterrorist financing investigations. Both were fired within weeks. When remaining team members told a Binance executive on November 24th that they would continue investigating Blessed Trust, they were locked out of the company's systems two days later. They were fired soon after and the accounts remained open.

The Visible Surface

Binance operates under a 2023 settlement with the U.S. Department of Justice that required the company enter a monitorship, later won by FRA, forcing an overhaul of its compliance system and ongoing independent monitoring. The exchange appointed a Chief Compliance Officer, built a sanctions and counterterrorist financing investigations team, and implemented automated screening tools designed to flag suspicious transactions. On paper, Binance had the infrastructure to detect and stop illicit financial flows.

Standard compliance screening looks at account registration data, transaction patterns, and matches against sanctions lists. When those systems work as designed, they generate alerts. Investigators review the alerts, escalate genuine threats, and freeze accounts when necessary.

The system assumes leadership acts on credible findings. In this case, leadership acted, albeit incorrectly.

The Hidden Reality

The Binance investigators weren't relying on automated alerts alone. They were mapping networks.

When they traced funds flowing to Entity A, the IRGC-linked wallet network, they identified two accounts moving nearly $1 billion combined. The first was Hexa, the Hong Kong firm that submitted incomplete documentation during registration. The missing documentation was a red flag that was noted internally but overridden when the account received VIP status anyway . Hexa moved $500 million in tether stablecoin before investigators could build a complete picture of its beneficial ownership.

The second account presented a different problem. Blessed Trust, also Hong Kong-based, claimed to help clients convert traditional currency into cryptocurrency for cross-border payments. The company operated in bitumen and construction materials, sectors that Binance's own risk assessments identified as vehicles for the illicit China-Iran oil trade. Between 2024 and early 2025, Blessed Trust moved hundreds of millions of dollars toward Entity A.

But when investigators tried to examine the account more closely, they discovered it was labeled "internal" in Binance's systems. Access required special approval from Internal Audit, a department whose lead reports directly to CEO Richard Teng. Binance later claimed the label was a standard measure to preserve investigative integrity misapplied in this case by a junior employee.

The investigators found something else: the account had already attracted attention. The FBI had made inquiries about Blessed Trust without specifying why. The IRS had also contacted Binance, specifically citing money laundering concerns. Between those inquiries and early 2025, the account triggered 14 internal sanctions alerts. Most were closed by an automated system that found no illicit activity or determined they didn't meet escalation criteria.

Binance’s investigators disagreed. They briefed senior leadership in October 2024, presenting evidence of the connection between Blessed Trust, Entity A, and the IRGC shadow banking corridor. They explained how the network enabled Chinese buyers to pay for Iranian oil through cryptocurrency, layering transactions across jurisdictions to obscure the ultimate beneficiaries.

Leadership's response came on November 13, 2024, when the lead investigator and the head of sanctions and counterterrorist financing investigations were suspended and later fired within weeks. When the remaining team members informed a Binance executive on November 24 that they intended to continue investigating Blessed Trust, they were locked out of company systems two days later and fired soon after.

The accounts remained open. The network continued operating.

Why This Invisibility Creates Risk

The Binance case reveals a compliance structure that exists to satisfy regulators on paper while being systematically dismantled when it threatens commercial relationships . This creates cascading liability for every institution in the crypto ecosystem.

Under the 2023 US DOJ settlement , Binance operates under a compliance monitor with authority to review the company's adherence to anti-money-laundering and sanctions obligations. The company agreed to implement "effective" compliance controls and report suspicious activity. Firing investigators who uncovered $1 billion flowing to IRGC-linked networks, then keeping those accounts open, suggests the monitoring framework has failed to prevent the exact conduct it was designed to address.

For financial institutions, the exposure is immediate. Any bank processing fiat currency conversions for Binance clients, any payment processor enabling on-ramps to the exchange, and any custodian holding assets for Binance users faces secondary sanctions risk. U.S. Treasury regulations allow OFAC to designate foreign financial institutions that knowingly facilitate significant transactions with sanctioned Iranian entities. The Blessed Trust and Hexa accounts moved nearly $1 billion toward Entity A, a network law enforcement identified as IRGC-linked. That volume crosses any threshold for "significant."

The timing compounds the risk. In February 2025 , President Trump ordered a "maximum pressure" campaign to deny Iran and its proxies access to cash. The Treasury has since expanded enforcement against the shadow fleet of tankers moving Iranian oil and the financial networks enabling payment. Crypto exchanges that facilitate those payments are explicit targets. Binance's decision to fire investigators rather than freeze accounts places the company directly in the enforcement crosshairs .

For corporate counsel and compliance officers, the lesson is clear: internal controls at counterparties cannot be trusted when those controls threaten revenue . Standard due diligence asks whether a crypto exchange has a compliance team. The correct question is whether that team has the authority to act when they find something, or whether they get fired for looking too closely.

Call to Awareness

This isn't a theoretical risk. Binance investigators submitted their findings to the company's internal criminal conduct committee, chaired by Chief Compliance Officer Noah Perlman, in accordance with the 2023 DOJ plea agreement requiring reports on suspicious transactions. The committee took the information to the Justice Department. Binance then removed Hexa as a client, claiming it managed the risk appropriately by offboarding the user and cooperating with law enforcement.

But Blessed Trust, the account that moved over $1 billion and triggered 14 sanctions alerts, remained active even after investigators were fired for continuing to pursue it. The network they uncovered continued operating. The shadow banking corridor between Hong Kong and Tehran stayed open.

For institutions conducting due diligence on crypto counterparties, the question is no longer whether compliance controls exist. The question is whether those controls can be overridden when they threaten commercial relationships with executive-linked accounts. Standard screening tools flag transactions after they occur. They cannot reveal the internal decision-making that keeps flagged accounts open or the retaliation structures that silence investigators who look too closely.

Evidencity's Illicit Network Intelligence maps the hidden relationships that connect VIP accounts to sanctioned entities, revealing the beneficial ownership and executive connections that internal compliance teams are prevented from investigating. Our RiskSolve offering allows an even deeper look into what happened and why it matters, but more importantly, what this means moving forward.

When internal controls fail by design, external visibility becomes the only defense against secondary sanctions exposure.

The Binance investigators found the network. They reported it. They were fired for it. The accounts stayed open. That sequence reveals everything corporate counsel needs to know about trust-based compliance in the crypto ecosystem.

Teeth Without Eyes: How Modern Slavery Laws Are Built to Miss What They’re Looking For

Wed, 04 Mar 2026 12:11:04 GMT

New Zealand’s bipartisan Modern Slavery Bill is the toughest supply chain law in the Anglosphere. It also illustrates why most modern slavery legislation is structurally incapable of finding what it claims to be looking for.

New Zealand’s new Modern Slavery Bill looks, on paper, like the toughest supply chain law in the Anglosphere. Introduced to Parliament on February 10 with rare bipartisan support from both National and Labour, it carries criminal fines of NZ$200,000 (approximately €100,000), civil penalties of up to NZ$600,000 (approximately €300,000), and personal director liability for companies that fail to report. It is the first modern slavery law in the English-speaking world to put genuine consequences on the table.

There is one problem. It doesn’t require companies to actually investigate.

The bill mandates that companies with annual revenue above NZ$100 million report on what they find — or don’t find — in their supply chains. But it stops short of requiring the due diligence process that would generate those findings. A company can file a statement, declare it found nothing, and remain technically compliant. Until, of course, a regulator or a journalist finds what it didn’t look for. Under a penalty regime with director liability, that statement becomes evidence.

New Zealand didn’t invent this problem. It inherited it — from fifteen years of modern slavery legislation that asked companies to report without requiring them to investigate. What’s new is that the consequences for getting it wrong are finally real.

The Pattern

Call it the transparency theory: the idea that requiring companies to publish statements about their supply chains will create enough reputational pressure to drive behavioural change. It is the founding assumption of every modern slavery law written in the English-speaking world. A decade of evidence suggests it is wrong.

The UK’s Modern Slavery Act, passed in 2015, was the first. Section 54 requires large companies to publish annual statements on supply chain practices. Content is voluntary. Penalties are non-existent — an injunction mechanism exists that the Secretary of State can seek in the High Court, but it has never once been used. In October 2024, the House of Lords concluded the regime was fragmented and ineffective. Australia’s 2018 Modern Slavery Act improved on the model by mandating specific reporting criteria, but carried over the critical flaw: zero penalties for non-compliance. A UNSW study found 77% of companies failed to meet basic reporting requirements. Canada’s Bill S-211, in force since 2024, added penalties on paper but detained a single shipment under forced labour provisions — compared to over 16,700 stopped by US Customs and Border Protection over the same period.

The pattern is consistent: laws with eyes but no teeth, or neither. Statements accumulate. Behaviour doesn’t change.

France broke the mould. Its Loi de Vigilance, enacted in 2017, requires large companies to establish, implement, and publish a vigilance plan that actively identifies and prevents human rights risks across their value chains — not just in their own operations but through subsidiaries, subcontractors, and suppliers. Between 2017 and 2024, 13 lawsuits were filed under the law targeting TotalEnergies, BNP Paribas, Carrefour, EDF, and SNCF. On June 17, 2025, the Paris Court of Appeal issued its first ruling on the substance of a company’s obligations — upholding an order requiring La Poste to fundamentally revise its vigilance plan. The court’s finding was precise: risk mapping too vague, third-party assessments disconnected from identified risks, methodology insufficient to actually locate what the law required it to find. This is what enforcement under a law with both eyes and teeth looks like. It doesn’t ask whether a company filed a statement. It asks whether the methodology was rigorous enough to actually find something.

Germany went further still — mandatory risk management systems, human rights officers, annual risk analyses, fines of up to 2% of global turnover. Then, in April 2025, the new CDU/CSU-SPD coalition placed the law’s abolition under a section of their agreement titled “Immediate Program for Reducing Bureaucracy.” Reporting obligations were stripped immediately. Sanctions narrowed to serious human rights violations only. A law that had both eyes and teeth is being methodically defanged — not because it failed, but because it worked well enough to create compliance costs that industry lobbied to eliminate. The EU’s Corporate Sustainability Due Diligence Directive — the most comprehensive framework ever written, with penalties of up to 5% of global turnover and civil liability — exists on paper. Following the December 2025 Omnibus rollback, its application has been deferred to July 2029, its scope narrowed to companies with over 5,000 employees and €1.5 billion in turnover. It is the destination. It is not yet the journey.

Where Liability Lives

The legislative landscape matters to corporate counsel for one reason: the gap between what a law requires and what it assumes is where liability lives.

New Zealand’s bill illustrates this with precision. Companies must report on incidents found, complaints received, and actions taken — without any obligation to conduct the investigation that would surface them. A company that finds nothing and reports accordingly is technically compliant until enforcement begins and someone demonstrates there was something to find. At that point, the filed statement is not a shield. It is a record of what the company claimed not to see.

France’s La Poste ruling makes the legal standard explicit. The Paris Court of Appeal ordered the company to revise its vigilance plan not because it failed to file a document, but because its methodology was insufficient to actually locate what the law required it to find. The court’s message is unambiguous: a statement is not evidence of compliance. A methodology is.

The financial arithmetic reinforces this. A single UFLPA detention costs importers an average of $810,000 — covering legal fees, storage, demurrage charges, lost sales, and operational disruption. In fiscal year 2025, US Customs and Border Protection stopped 7,325 shipments, a 51% increase over the prior year. Against these numbers, the European Commission’s own estimate for full CSDDD compliance — between €52,200 and €643,000 annually — looks less like a burden and more like an insurance premium.

Companies operating across the EU, UK, US, Australia, and now New Zealand face an aggregate compliance reality that demands genuine investigative capability. Standard screening tools check whether an entity appears on a known list. They do not map the relationships between entities that reveal how risk actually operates: the front company registered in a clean jurisdiction, the financial intermediary layering transactions across borders, the subcontractor three tiers removed from the primary supplier relationship. Under weak legislation, that gap is academic. Under what New Zealand is building — and what France has already built — it is a liability.

Evidencity’s Taxonomy of Transparency Legislation maps every major modern slavery law against two dimensions: whether it requires companies to look, and whether it punishes those that don’t. The full analysis charts the trajectory from the UK’s unenforced 2015 Act to the EU’s CSDDD, due for application in 2029.

What the taxonomy reveals is that the direction of travel is settled, even if the pace is not. More jurisdictions will move toward mandatory due diligence with real enforcement. The question for companies is not whether that moment will arrive in their operating environment, but whether they will have the investigative capability to meet it when it does.

The cost of looking is known. The cost of being found not to have looked is escalating.

Download Evidencity’s full Taxonomy of Transparency Legislation.

What Happened When Switzerland Got Serious

Fri, 20 Feb 2026 15:43:40 GMT

An Oxford study maps how $88.6 billion in annual African capital flight pivoted from Western havens to Dubai, Singapore, and Hong Kong after post-2008 regulatory tightening. Tracing where the money went requires the kind of curated, in-language source knowledge that no sanctions database can replicate.

Every year, an estimated $88.6 billion in illicit capital leaves Africa. That figure — drawn from a 2020 UNCTAD study of 2013-2015 averages — exceeds the $73.6 billion the continent received in official development assistance in 2023, the bulk of it from the US, Germany, France, Japan, and multilateral institutions like the World Bank. More wealth exits through hidden channels than enters through the front door of international aid.

Where does it go? An Oxford study published in early 2026 by Ricardo Soares de Oliveira — senior research fellow at the Oxford Martin Programme and professor at Sciences Po — maps the answer. When post-2008 regulatory tightening made traditional Western havens like Switzerland and the Channel Islands less hospitable, African capital flight pivoted. Dubai, Singapore, and Hong Kong became what de Oliveira calls among the fastest-growing and most significant transnational connections for Africa's offshore economy. The ICIJ reported on the findings in February.

The geographic shift is well documented. What's less understood is the screening gap it created. The tools most compliance teams rely on — platforms that aggregate international sanctions lists, PEP databases, and adverse media — were architected primarily around Western financial systems. These three Asian hubs operate in languages, registries, and regulatory environments those tools still struggle to penetrate at depth.

The Geographic Shift

Dubai sits at the center of the study's findings. The UAE is now the fourth-largest source of foreign direct investment into Africa. According to de Oliveira's research, it handles roughly 95% of illegal gold originating from East and Central Africa. The UAE has become a landing zone for figures facing scrutiny elsewhere: Isabel dos Santos, once Africa's richest woman and now subject to Interpol red notices, and the Gupta brothers, wanted in South Africa for state capture. Evidencity has documented these gold pipelines in prior investigations — tracing conflict mineral flows from eastern Congo through UAE-linked entities, and mapping how 97.5% of Central African Republic gold production disappears into smuggling networks that terminate in Gulf trading houses.

To its credit, the UAE has moved aggressively since being placed on the FATF grey list in March 2022. It established a dedicated financial crimes court, expanded its Financial Intelligence Unit, launched the goAML suspicious activity reporting platform, and suspended 17 precious metal dealers in 2023 for failing to report suspicious transactions. FATF acknowledged the progress and removed the UAE from its grey list in February 2024. But reform and residual risk coexist — a point we'll return to.

Hong Kong, meanwhile, served as Mossack Fonseca's busiest global office, channeling 29% of the firm's active shell companies through its Hong Kong and China operations before the Panama Papers brought the edifice down in 2016. Singapore hosted two of the most prolific enablers exposed by successive leaks: Portcullis TrustNet, named in the 2013 Offshore Leaks, and Asiaciti Trust, fined S$1.8 million by the Monetary Authority of Singapore in 2020 for anti-money laundering failures spanning over a decade.

Three hubs. Three different regulatory architectures. Three different languages and corporate registry systems. And one common thread: each sits in a jurisdiction where the depth of local source material — court records, corporate filings, enforcement databases, independent media — demands more than automated screening against international watchlists.

What Screening Misses

Conventional compliance platforms are powerful at what they do. World-Check covers 240 countries and claims sources in 64 languages. Dow Jones Risk & Compliance draws from over 32,000 sources through Factiva in 28 languages. These tools will tell you whether a name appears on OFAC's sanctions list or an Interpol notice. They aggregate, they index, they score.

But aggregation is not investigation. Knowing that a source exists in a language is not the same as knowing what that source contains, how to access it, or where its blind spots are.

Take Singapore, where Portcullis TrustNet and Asiaciti Trust operated for years. Evidencity's Country Resource Library (CRL) for Singapore maps over 55 local sources — including Monetary Authority enforcement actions, the ACRA corporate registry, and the Bankruptcy and Insolvency Register, which requires a fee to access. The Singapore Police Force's published commercial crime prosecution records cover only 2014 to 2017. A platform scraping public databases wouldn't flag that limitation. A CRL does.

Hong Kong is more complex. The Companies Registry requires login via "Unregistered User" with a Hong Kong or foreign ID number. The Audit Commission requires physical retrieval of documents. And the media landscape carries its own intelligence: Ming Pao, one of Hong Kong's leading Chinese-language newspapers, fired its chief editor after the outlet ran Panama Papers coverage — a fact that tells an investigator something critical about the independence and reliability of local reporting in that jurisdiction.

This is what a CRL maps: not just sources, but access methods, language requirements, reliability ratings, and known gaps. Evidencity maintains CRLs for 50 core countries — including Singapore and Hong Kong — with quarterly updates on a total of 80. These CRLs are the foundation on which Illicit Network Intelligence is built. When a network spans from eastern Congo through Dubai to a shell company registered in Singapore, tracing it requires source-level knowledge in every jurisdiction along the chain.

The List You Follow Depends on Who Wrote It

The UAE's FATF delisting in February 2024 should have simplified matters for compliance teams. It didn't. Two months later, the European Parliament voted to keep the UAE on the EU's own high-risk third-country list, citing concerns over Russian sanctions evasion and conflict-zone gold laundering. Transparency International EU pointed to what it called glaring deficiencies in real estate transparency and precious metals oversight. Middle East Eye , reporting on a Politico investigation, documented that representatives from Germany, Italy, Greece, and the United States had declined to challenge the UAE's accelerated removal from the FATF list — even as Belgium's representative to the International Co-operation Review Group raised objections.

The EU didn't align with FATF until July 2025 — a 17-month gap during which two of the world's most authoritative regulatory bodies disagreed on whether one of the world's largest financial hubs had earned a clean bill of health.

For corporate counsel, the implication is practical: when multilateral bodies themselves can't agree on jurisdictional risk, automated scoring that relies on their outputs inherits their contradictions. A screening platform that updates its risk model when FATF delists a country will show one result. A platform that weights EU designations will show another. Neither is wrong. Both are incomplete.

The only way to resolve that kind of uncertainty is locally contextualized and curated source knowledge: mapped access methods, reliability-rated media, jurisdiction-specific operational nuance. It’s not about which list says what. It’s about what the source landscape actually reveals. This is why big data is not enough for transparency.

Seeing Where the Money Went

The Oxford study's most important finding is that, as de Oliveira argues, reforms that aren't truly global simply shift business to more permissive jurisdictions. The same principle applies to screening: tools calibrated to Western financial architectures don't automatically extend to hubs with different languages, access requirements, and regulatory cultures.

Evidencity's Country Resource Libraries exist because these jurisdictions demand it — 50 core countries, quarterly updates across 80, reliability-rated sources, in-language coverage, vetted source networks. That curated, locally contextualized source knowledge is what enables Illicit Network Intelligence to trace networks across borders, from conflict zones to financial centers to shell company registries. When $88.6 billion in African capital flight migrates to hubs where conventional tools can't read the local landscape, the question isn't whether your screening is running. It's whether your screening can see.

How Congo's Gold Keeps Finding Its Way to Dubai

Mon, 16 Feb 2026 11:53:36 GMT

A new investigation reveals the UAE joint venture meant to clean up Congo's gold trade sourced from conflict zones, never published due diligence reports, and traced back to one of Abu Dhabi's most powerful figures. When the deal collapsed, the gold found a new route — through Rwanda.

In 2023, a joint venture between the Democratic Republic of Congo and the United Arab Emirates exported more than five tonnes of artisanal gold from South Kivu province — over $300 million worth of precious metal, shipped to a refinery in Abu Dhabi. Primera Gold DRC SA was pitched as the solution to decades of gold smuggling from Congo’s conflict-ravaged east: a state-backed monopoly that would formalize the trade, capture tax revenue, and starve armed groups of their financing.

A two-year investigation by the Global Initiative Against Transnational Organized Crime, published in January 2026, found something different. Researchers documented gold flowing into Primera Gold’s supply chain from mines where armed groups collected taxation, where children worked alongside adults, and where illegal dredging operations carved through the Itombwe Nature Reserve. Primera Gold never published a single due diligence report. Revenues from the DRC government’s 45% stake never appeared in state budgets. And the corporate structure behind the venture traced back to one of the most powerful men in the Gulf.

The venture collapsed in 2024. The gold didn’t stop flowing. It just found another door.

The Architecture of Access

Primera Gold DRC SA was born from a 2021 cooperation agreement between Kinshasa and Abu Dhabi — a deal in which the UAE provided military equipment and training to Congo’s army in exchange for exclusive mineral rights. By December 2022, the joint venture was formalized: the DRC government held 45%, while the UAE-registered Primera Group Limited held 55%, with exclusive rights to purchase artisanal gold from South Kivu. The contract ran 25 years and granted Primera Gold a 0.25% export tax — a fraction of the 6% rate paid by competitors. UN experts later concluded this created a “de facto monopoly” on legal artisanal gold exports.

The preferential terms were striking. The corporate structure behind them was more so. Primera Group Limited was represented by Sibtein Alibhai, whom UN investigators had previously linked to AR Gold — a company documented buying gold from areas controlled by the NDC armed group as far back as 2012. Alibhai went on to become chief global strategist at International Resources Holding — a subsidiary of International Holding Company, the Abu Dhabi conglomerate chaired by Sheikh Tahnoun bin Zayed Al Nahyan, the UAE’s national security advisor. Primera Group Limited itself operated from the headquarters of Royal Group — also chaired by Sheikh Tahnoun. The designated refinery for Primera Gold’s exports, Auric Hub Ltd, was run by IRH’s CEO Ali Alrashdi.

This was a state-intelligence architecture dressed in corporate registration documents.

The Pattern Across Minerals

Evidencity’s Project Tantalus report documented the same pattern playing out simultaneously in tantalum. The same actors — the same corporate vehicles, the same UAE state-linked interests — pursued exclusive rights over Congo’s 3T minerals (tin, tantalum, tungsten) through a parallel venture, Primera Metals DRC. The operational playbook was identical: military cooperation securing mineral access, preferential terms locking out competitors, and supply chains running through conflict-affected eastern provinces with minimal independent oversight.

What Project Tantalus revealed in tantalum, the GI-TOC’s investigation now confirms in gold: a systematic approach to securing Congo’s mineral wealth through structures designed to concentrate control while diffusing accountability.

The Pivot

The UAE exited Primera Gold in August 2024. The DRC government assumed full ownership, renaming the company DRC Gold Trading SA by November. On paper, the story ended — a failed experiment in formalized gold trading.

Then M23 changed the map. Rwanda-backed rebels seized Goma in January 2025 and Bukavu — the capital of South Kivu and Primera Gold’s operational hub — in February. By March, DRC Gold Trading SA suspended purchasing operations in Bukavu entirely. The company had exported just 200 kilograms in January 2025 against a target of 16 tonnes for the year. South Kivu, which accounted for over 90% of the country’s official artisanal gold exports, went dark.

The gold didn’t vanish. Rwanda exported 19.4 tonnes of gold in 2024, earning $1.5 billion — despite domestic production estimated at roughly 2.9 tonnes. The UAE remained a primary destination. In March 2025, the EU sanctioned Rwanda’s Gasabo Gold Refinery for transiting illegally mined Congolese gold, along with the head of Rwanda’s mining regulator. President Kagame publicly acknowledged that some of Rwanda’s gold originates in Congo, framing it as regional trade rather than smuggling.

The geography of the gold pipeline shifted. Its terminus in the Gulf did not.

The Due Diligence Blind Spot

For companies sourcing gold that transits through the UAE, the Primera Gold story exposes a structural vulnerability in conventional screening. A standard entity-level check on DRC Gold Trading SA today returns a state-owned Congolese company — no OFAC designations, no Interpol notices. Run the same check on Auric Hub Ltd, the Abu Dhabi refinery that processed Primera Gold’s exports, and nothing flags. The sanctions, the armed groups, the child labor, the missing revenues — none of it surfaces in a database query.

The EU’s Corporate Sustainability Due Diligence Directive, which enters phased application from 2028, will require large companies to identify and mitigate adverse human rights and environmental impacts across their value chains. The EU Conflict Minerals Regulation already demands supply chain due diligence for gold imports. Yet Primera Gold operated for over a year — exporting $300 million in gold from documented conflict-affected areas — without publishing a single due diligence report required under Congolese law. No ICGLR audit of its operations was ever conducted.

The question for compliance teams isn’t whether Primera Gold failed. It’s whether their current screening tools would have caught it. As Evidencity’s Project Tantalus demonstrated, the relationships connecting conflict minerals to global markets don’t announce themselves through sanctions lists or adverse media hits. They live in shared directorships, overlapping corporate addresses, and debt obligations between shell entities registered across multiple jurisdictions. Seeing them requires mapping networks, not screening names.

The Door Doesn’t Close

Primera Gold was supposed to be the front door — the legitimate, state-sanctioned channel that would bring Congo’s artisanal gold into the formal economy. It lasted two years. The supply chain it built ran through conflict zones. The revenues it generated disappeared from state budgets. The corporate architecture behind it connected a Congolese joint venture to the private interests of one of the Gulf’s most powerful figures.

When that door closed, the gold found another route — through Rwanda, through Gasabo, and back to the same refineries in the UAE. The pipeline’s geography shifted. Its destination did not.

For companies with exposure to gold supply chains terminating in the Gulf, conventional entity screening won’t reveal this infrastructure. Evidencity’s Illicit Network Intelligence maps the relationships — between shell companies, shared directors, debt obligations, and overlapping corporate addresses — that connect conflict-affected mining areas to global markets. Project Tantalus demonstrated this capability across tantalum. Primera Gold confirms the pattern extends to gold.

The question isn’t whether your supply chain touches this network. It’s whether your due diligence tools can see it.

Venezuela's Laundered Billions

Fri, 06 Feb 2026 13:46:31 GMT

How professional launderers turned stolen PDVSA oil Into clean European assets.

In 2017, a money launderer sat in a Madrid office and explained his business model into a hidden recording device. Hugo Gois was describing a professional service: how to move hundreds of millions of dollars in stolen Venezuelan oil money through European financial institutions without triggering a single compliance alert.

"We invest a lot in research so that we can carry out operations without the machines detecting it," Gois explained to an associate he believed was a potential client. The machines he referenced were the KYC and anti-money laundering systems that banks rely on to screen transactions. His method exploited the gaps between jurisdictions where compliance responsibility becomes deliberately unclear. The scheme Gois helped orchestrate ultimately moved $1.2 billion in funds stolen from Venezuela's state oil company, PDVSA. By the time U.S. authorities dismantled the network in their "Operation Money Flight" investigation, Venezuela's oil wealth had been converted into Miami real estate, Spanish horse farms, and Swiss bank accounts.

The Visible Surface: Legitimate Financial Services

Examined individually, each participant appeared unremarkable. The voices in the recording belonged to Hugo Gois, a Portuguese financial consultant based in Caracas; Ralph Steinmann, a Swiss asset manager with access to European institutions; and José Vicente Amparan, a Venezuelan lawyer holding power of attorney for investment accounts. A licensed financial services firm in Cyprus and UK financial institutions are also mentioned.

Standard compliance protocols evaluated each node independently and triggered no alerts. Gois had no criminal record. Steinmann operated through established banking channels. The Cypriot entity held proper licensing. Transactions fell within normal parameters for wealthy Latin American clients diversifying into European markets.

The Hidden Reality: The Architecture of Invisibility

The secret recording revealed that these weren't separate actors conducting independent transactions. Instead, they formed a deliberate network engineered to exploit the fact that compliance systems evaluate entities in isolation.

Gois explained how the network positioned each node to create jurisdictional ambiguity. The Cypriot entity would be a bridge to open accounts at UK brokerages, which in turn would trust that compliance was done in Cyprus. Where UK firms saw a licensed Cypriot broker, Cyprus regulators saw routine outbound investment activity. Without a view of the full network, neither connected the dots to PDVSA corruption.

This architectural approach extended across the entire operation. Steinmann provided European banking access and designed tax structures where even to the banks the ultimate owner was not revealed. Amparan held power of attorney, creating legal distance between stolen funds and their ultimate beneficiaries. Shell companies in Panama added layers. Trusts in multiple jurisdictions obscured beneficial ownership. Each component appeared legitimate when examined individually. The criminality existed in the connections between them.

U.S. authorities ultimately mapped this network through Operation Money Flight, which revealed how $1.2 billion was embezzled from PDVSA through bribery schemes involving senior officials. Abraham Edgardo Ortega, PDVSA's executive director of financial planning, accepted bribes to facilitate the theft. According to U.S. court documents, Gois served as a financial asset manager for multiple Venezuelan officials, working alongside Steinmann and Amparan to move the proceeds through European banking channels.

The scale of Venezuelan oil sector corruption extends far beyond this single network. The Atlantic Council estimated in 2020 that officials siphoned at least $28 billion from PDVSA between 2004 and 2020. FinCEN enforcement actions revealed that professional money laundering networks established hundreds of shell companies to process Venezuelan corruption proceeds through "false contracts, mischaracterized loans, over- and under-invoicing, and other trade-based money laundering schemes."

The Business Implication

The professional laundering network that moved PDVSA's stolen billions exposes a fundamental flaw in conventional due diligence: compliance systems evaluate entities individually, while sophisticated criminals operate as networks specifically designed to exploit that blind spot.

For financial institutions handling cross-border transactions, the implications are direct. When a Cyprus brokerage opens an account at a UK firm, standard KYC examines the Cypriot entity's licensing, documentation, and transaction history. It doesn't map whether that entity to other entities or individuals, in Cyprus or elsewhere.

Financial institutions face more than reputational damage. The U.S. Treasury's 2019 designation of PDVSA under Executive Order 13850 created sanctions exposure for any institution that facilitated transactions with the entity, even unknowingly. By 2019, U.S. prosecutors had charged 33 individuals in Venezuelan corruption cases, with 19 pleading guilty. The Venezuela Asset Recovery Initiative tracked $139 million in seized assets across multiple jurisdictions. While the sanctions architecture from the US is changing with regard to Venezuela, the BIS Affiliates rule will hold (later this year). No matter what the US says, many networks still include illicit actors.

Conclusion

The recording of Hugo Gois describing his laundering methodology was a business development meeting for network services already operating at scale. While he spoke in that Madrid office, PDVSA funds were actively moving through the European financial infrastructure he described, each node appearing legitimate in isolation, the criminality visible only in the connections between them.

The professionals who build these networks understand compliance systems intimately. They study how KYC evaluates entities individually. They research jurisdictional gaps where no single regulator sees the complete picture. They structure operations to fragment suspicious activity across multiple institutions, knowing that standard screening won't connect the dots.

Evidencity's Illicit Network Intelligence reveals exactly what entity-level screening misses: the professional networks where Hugo Gois provides research, Ralph Steinmann provides access, and José Vicente Amparan provides legal cover. These individuals don't appear on sanctions lists. Their companies hold proper licenses. The risk exists in the architecture connecting them.

Where conventional due diligence questions the legitimacy of an entity, network intelligence asks what network the entity enables. That difference determines whether you see $1.2 billion in stolen oil money as routine cross-border investment or as the illicit professional infrastructure it actually represents.

Thank you to OCCRP for your reporting on this topic.

Data Stories: Peace Negotiations as Criminal Sanctuary

Fri, 30 Jan 2026 08:08:44 GMT

Once a month, Evidencity looks into its Illicit Network Intelligence data and pulls out a story that helps reveal how our data is different.

On September 21, 2024, Alexander Farfan Suarez walked councilwoman Sandra Betancourt out of six days of captivity in Argelia, Cauca. The FARC dissident commander had a message for her, delivered in front of shocked local officials: "I don't know how you will continue as a councilwoman, but you can't return to Cauca. All the western command fronts have orders to ensure this is enforced."

Farfan was supposed to be a peace facilitator. The Colombian government had appointed him in September 2023 to President Gustavo Petro's Total Peace process, suspending his arrest warrant to enable negotiations with Estado Mayor Central dissidents. Instead, he'd defected back to Ivan Mordisco's faction seven months earlier in February 2024—reconstituting the same command networks he was meant to help dismantle.

Former hostage Ingrid Betancourt, whom Farfan had held captive for six years starting in 2002, called him "a man of infinite darkness." But the government's peace architecture had transformed him into something else: a protected negotiator with suspended criminal liability, free to operate under diplomatic cover while rebuilding his networks.

He wasn't alone.

The Visible Surface

Farfan's defection exposed a pattern that continued through 2024 and into 2025. Between March 2023 and July 2024, at least 19 Estado Mayor Central members received the same treatment: arrest warrants suspended, legal protections activated, peace negotiator credentials issued. The Colombian Attorney General's office processed these suspensions under Resolution 65 of 2024, transforming wanted criminals into government-authorized facilitators overnight.

Background checks return government peace facilitators engaged in Total Peace negotiations. Warrants show up in historical records with official suspension dates. The screening captures their diplomatic status but misses their operational reality.

Diana Milena Agudelo Salazar appears as a peace negotiator. Walter Freddy Ruiz Montaño shows government-sanctioned facilitator credentials. Jorge Luis Caicedo Castro carries the same protected status. Standard screening misses what connects them: identical network structures, uniform connectivity patterns, and a command apparatus that weaponized peace talks.

The Hidden Reality

Evidencity's Illicit Network Intelligence data maps a different architecture entirely. Nine of the Estado Mayor Central's top ten most connected operatives share a remarkably uniform profile: 48 professional relationships each, Risk Scores between 80-100 (where 100 is high risk), and membership in what functions as a criminal board of directors governing Colombia's largest FARC dissident network.

The uniformity is structural. The data reveals formalized command nodes in a network of approximately 48 members who collectively control drug trafficking corridors, territorial operations, and revenue streams across Guaviare, Meta, Caquetá, Cauca, and Nariño departments. Each maintains near-identical connectivity patterns, suggesting coordinated governance rather than organic criminal association.

Standing above this directorate is Nestor Gregorio Vera Fernandez, aka Ivan Mordisco, with 79 relationships. The United States designated him as a Specially Designated Global Terrorist in November 2021, making him Colombia's most wanted criminal. He was the first FARC commander to reject the 2016 peace agreement, establishing the Estado Mayor Central's dissident structure. His Risk Score: 100.

Yet eight of his fellow Estado Mayor Central commanders operate at Risk Score 99, despite documented roles in the same command structure. They carry no international sanctions. No OFAC designations. No terrorism classifications. The peace process granted them something more valuable than legitimacy: invisibility through diplomatic status.

Rather than dismantling networks during negotiations, these commanders consolidated them. Peak connectivity coincided precisely with suspended warrants. They used diplomatic immunity to operate without interference.

Business Implication

Mordisco carries a U.S. terrorism designation and Risk Score 100. His eight fellow Estado Mayor Central commanders operate at a Risk Score in the 90s with no international sanctions despite identical command roles. Standard screening captures Mordisco. The operational infrastructure surrounding him passes through undetected.

Farfan's trajectory illustrates the commercial implications. Captured in 2008's Operation Jaque for kidnapping Ingrid Betancourt, he received peace facilitator credentials in September 2023. His arrest warrant suspension created a window of legal protection. He defected to Mordisco's faction by February 2024, months before the pattern became publicly visible. When he appeared releasing Sandra Betancourt in September 2024, he was issuing territorial control orders for western Cauca, demonstrating command authority maintained throughout his "peace facilitator" period.

Commercial operations in EMC-controlled territories intersect with this hidden governance structure. Coca production, mining operations, and logistics infrastructure all move through corridors these commanders control. The peace process created a legal shield around the individuals managing these networks while their operational control remained intact.

The 48-relationship uniformity across Estado Mayor Central's command structure reveals institutionalized territorial governance masquerading as diplomatic transition. Each commander's identical connectivity pattern maps to specific revenue streams, enforcement mechanisms, and commercial dependencies. In April 2024, the EMC split. Alexander Díaz Mendoza, aka Calarcá Córdoba, led one faction continuing peace negotiations. Mordisco's faction broke off talks entirely. The criminal infrastructure persisted in both.

Conclusion

Between March 2023 and May 2024, Estado Mayor Central commanders operated under full legal protection while maintaining command over Colombia's largest FARC dissident network. Nineteen arrest warrant suspensions. Fourteen months of diplomatic immunity. Zero disruption to operational networks processing an estimated $500 million annually in cocaine revenue.

When the ceasefire partially collapsed in May 2024 following the killing of four Indigenous children, and negotiations with Mordisco's faction ended completely, the command structure remained intact. The 48-member directorate had spent over a year consolidating control under diplomatic cover. The uniformity of their connectivity patterns persisted through the EMC's split into negotiating and non-negotiating factions.

In November 2025, Mordisco announced his faction would resort to political violence ahead of Colombia's May 2026 presidential elections. The threat wasn't theoretical—his network had spent two years operating under legal protection, strengthening territorial control across eight departments identified as high-risk zones for election violence.

Standard screening captures peace negotiators with suspended warrants. Evidencity's Illicit Network Intelligence reveals the operational architecture those negotiations protected. The difference determines whether commercial operations understand who actually governs the territories they operate in.

Forced Labor on a Floating Squid Factory

Mon, 19 Jan 2026 14:00:26 GMT

How China's Squid Fleet Hides Labor Abuse in International Waters

The Ghost at Mile 201

The Lu Rong Yuan Yu 956 disappeared from satellite tracking at 2:47 a.m. on March 12, 2025. One moment, the 60-meter squid jigger was a blinking dot on the Argentine Coast Guard's radar, hovering just beyond the 200-nautical-mile line—the invisible border where Argentina's exclusive economic zone ends and the lawless high seas begin. The next moment, the vessel's Automatic Identification System went dark.

Commander Mauricio López knew what this meant. The ship was hunting.

By dawn, the Lu Rong Yuan Yu had slipped 40 miles inside Argentine waters, its deck ablaze with industrial floodlights, its automated jigging machines hauling up Argentine shortfin squid by the ton. When the Coast Guard cutter finally caught up, the Chinese vessel fled at full throttle, crew frantically dumping evidence overboard. But the real crime wasn't the illegal catch. It was the men locked below deck.

Inside the hull, Indonesian and Filipino fishermen worked 20-hour shifts under conditions the Environmental Justice Foundation would later describe as "floating prisons." Their passports were locked in the captain's safe. Their wages were phantom numbers in ledgers controlled by labor brokers thousands of miles away. Some had been at sea for two years without touching land. When investigators finally interviewed crew members who escaped, they described systematic debt bondage, physical violence, and the deliberate killing of hundreds of seals—their teeth harvested as trophies, their bodies dumped overboard.

The Lu Rong Yuan Yu 956 is not an outlier. It is one node in a vast transnational network designed to operate beyond the reach of law, beyond the scope of corporate audits, and beyond the visibility of standard due diligence. By the time its catch reaches a supermarket in London or New York—processed through Chinese export hubs, laundered through at-sea transshipments, and labeled with the sanitized language of "sustainable seafood"—the blood has been thoroughly covered up by layers of corporate opacity.

This is the architecture of invisibility hiding in plain sight, just beyond Mile 201.

Mapping the Architecture of Invisibility

When due diligence teams screen seafood suppliers, they see what the system is designed to show them: vessel registrations, flag state certifications, and export licenses. What they don't see is the three-layer network that makes the Lu Rong Yuan Yu 956 and vessels like it functionally invisible to corporate accountability.

Layer One: The Beneficial Ownership Maze

The Lu Rong Yuan Yu 956 is registered to Rongcheng Wangdao Ocean Fishery Co., a company based in Shandong Province. Standard screening stops there. But beneficial ownership research reveals a different picture: Wangdao is one of dozens of subsidiaries controlled by holding companies with ties to state-backed fishing conglomerates. The individuals who profit from illegal fishing and labor abuse are hidden behind shell companies, nominee directors, and opaque corporate registries that span multiple jurisdictions.

China's distant-water fishing industry operates through a deliberate corporate architecture designed to fragment accountability. A single fishing operation might involve a vessel registered in one province, ownership structures in another, financing from state-backed banks, labor recruitment through third-party agencies in Southeast Asia, and catch processed and exported through coastal hubs like Zhoushan. Standard vessel databases capture the registration. They miss the network.

Layer Two: The Labor Intermediary System

The Indonesian and Filipino crew aboard the Lu Rong Yuan Yu weren't hired by the vessel owner. They were recruited by labor agencies—maritime equivalents of the gato contractors in Brazil's soybean fields—that specialize in sourcing workers for distant-water fleets. These agencies operate across borders, charging recruitment fees that trap workers in debt bondage before they ever board a ship.

Workers pay $1,000-$3,000 in recruitment fees, sign contracts in languages they don't understand, and surrender their passports upon boarding. Once at sea, they're beyond the reach of labor inspectors, consular officials, or law enforcement. The agencies that recruited them vanish into the bureaucratic gaps between Indonesia, the Philippines, and China. The vessel owners claim ignorance. The labor brokers claim they're just middlemen.

This is the deliberate fragmentation of liability. No single entity is responsible because the system is designed to ensure no single entity can be held accountable.

Layer Three: The Supply Chain Laundering Network

The squid hauled aboard the Lu Rong Yuan Yu never will never reach port by that vessel. It is transferred at sea to refrigerated cargo ships—a practice called transshipment—that aggregate catch from dozens of vessels. By the time the squid reaches processing facilities in China, its origin has been scrubbed from the supply chain. It's mixed with legally caught squid, processed into frozen fillets or dried products, and exported with documentation that lists only the processing facility, not the fishing vessel.

From there, it enters global distribution networks. A retailer in London conducting due diligence sees a Chinese seafood exporter with proper export licenses and quality certifications. They don't see the Lu Rong Yuan Yu . They don't see Commander López's pursuit. They don't see the men locked below deck.

This is what Illicit Network Intelligence (INI) is built to reveal: the hidden connections between the vessel at Mile 201, the shell companies in Shandong, the labor brokers in Manila, the transshipment operators in international waters, and the processing facilities that launder the catch into legitimate commerce. Standard screening tools see isolated data points. INI maps the network that connects them—and exposes the individuals who profit from the system's invisibility.

From Plausible Deniability to Legal Liability

For seafood importers and global retailers, the Lu Rong Yuan Yu 956 represents more than an environmental scandal—it's a compliance failure with financial and legal consequences. The "architecture of invisibility" that once provided plausible deniability is being reclassified under new regulations as a failure to exercise "reasonable care."

The regulatory landscape has shifted from voluntary commitments to mandatory enforcement. The European Union's ban on products made with forced labor, combined with Corporate Sustainability Due Diligence Directive requirements, mandates that companies identify and mitigate human rights risks across their entire value chain, not just direct suppliers. This explicitly includes the transshipment operators and labor recruitment agencies that standard audits never touch. A UK supermarket chain sourcing squid cannot claim ignorance of the Lu Rong Yuan Yu's crew conditions when the regulatory standard is now "map the network or face market exclusion."

Expanded U.S. Seafood Import Monitoring Program requirements demand granular chain-of-custody documentation. If a shipment of squid cannot be traced to a specific, compliant fishing vessel—not just a processing facility—it faces immediate seizure at U.S. ports. The transshipment model that obscures vessel origin is now a customs red flag, not a business-as-usual practice.

In an era of investigative journalism and ESG activism, the gap between sustainability marketing and the reality of debt-bonded labor creates real brand risk. When NGO investigators can document forced labor on specific vessels, and network analysis can trace that catch to specific retailers, the "we didn't know" defense is harder to leverage. Investors and consumers increasingly treat supply chain opacity itself as evidence of complicity, or benign neglect at best.

A single contaminated shipment can trigger cargo seizure, legal defense costs, regulatory fines, and suspension of "trusted trader" status that delays all future imports. The cumulative cost dwarfs the investment in due diligence. Yet most companies still rely on screening tools that see the Rongcheng Wangdao export license but miss the Lu Rong Yuan Yu and the men locked in its hull because these tools rely on big data, not data intelligence.

This is the compliance gap that Illicit Network Intelligence (INI) closes. When regulators demand you map your supply chain to the vessel level, when investors demand you identify beneficial owners behind shell companies, when enforcement agencies demand you prove no forced labor touched your product—INI provides the network visibility that transforms regulatory requirements from impossible burdens into manageable risk mitigation.

The Cost of Looking Away

The Lu Rong Yuan Yu 956 is still fishing. So are the hundreds of vessels in its network. They operate in the same jurisdictional void, employ the same labor intermediaries, and feed the same supply chains they always have. What has changed is not their behavior—it's the regulatory and reputational cost of pretending they don't exist.

Corporate due diligence built on supplier questionnaires and facility audits was designed for a different era. It cannot see Mile 201. It cannot map the shell companies in Shandong or the labor brokers in Manila. It cannot trace the transshipment that scrubs a vessel's identity from the supply chain. This invisibility is a the central risk in global seafood sourcing.

The men locked below deck on the Lu Rong Yuan Yu are counting on someone to look beyond Mile 201. So are your shareholders, your regulators, and your customers. The question is whether you'll see the network before it sees you.

You Can't See One-Fifth of the World Supply of Tin

Fri, 16 Jan 2026 14:00:08 GMT

When the Indonesian government reformed a major tin mining operation, it replaced corruption with opacity, and military control over the source for one-fifth of the world's tin supply.

In November 2025, Indonesian military helicopters descended on Bangka Island's coastline, part of a sweeping crackdown on illegal tin mining operations. President Prabowo Subianto's administration framed the raids as a decisive break from decades of corruption—restoring order to a sector that supplies nearly 30% of the world's tin for semiconductors, electric vehicles, and consumer electronics.

But there’s a catch: the company now leading this "cleanup" is PT Timah, the state-owned enterprise whose former directors were convicted in 2023 of laundering $20 billion worth of illegally mined tin. The new leader is Retired Army Colonel Restu Widiyantoro, who was appointed in October 2025 during a ceremony where Prabowo personally transferred $420 million in seized smelters and rare earth assets to PT Timah's control.

For global technology procurement officers and ESG compliance teams, this catch creates a dangerous illusion. Standard due diligence tools will flag "government enforcement action" as a positive signal as it’s evidence of regulatory tightening and supply chain cleanup. The ground truth is more complex: Indonesia hasn't eliminated opacity in its tin supply chain. It centralized it under military-state control, making the origins of tin harder to trace, not easier.

The Mechanics of a $20 Billion Fraud

Between 2015 and 2022, PT Timah operated as a facilitator for a massive shadow economy. An investigation by Indonesia's Attorney General's Office found that PT Timah executives allowed unlicensed miners to operate within the company's own concessions, then "repurchased" illegally extracted tin through a network of shell companies at inflated prices—effectively laundering the ore into the legal supply chain.

The scale was staggering. According to Indonesia's Financial and Development Supervisory Agency (BPKP), the scheme caused Rp 300 trillion (approximately $20 billion) in total state losses —including Rp 271 trillion in environmental degradation from unregulated pits and coastal dredging. In late 2024, former PT Timah President Director Mochtar Riza Pahlevi Tabrani and Finance Director Emil Ermindra were sentenced to 20 years in prison. Yet PT Timah itself, as a corporate entity, faced no consequences.

From Corruption Cleanup to Military Control

The "reform" that followed was a pivot toward militarization, not a return to civilian oversight. President Prabowo Subianto, a former special forces commander, has systematically placed retired military officers in leadership positions across Indonesia's state-owned mining companies — strategic repositioning of a state asset under military command.

Restu Widiyantoro is emblematic here. Widiyantoro is a retired Army colonel who was awarded the honorary rank of Brigadier General by Prabowo just days before overseeing the handover of seized private smelters to PT Timah. In October 2025, Prabowo personally transferred $420 million worth of confiscated assets—including smelters previously operated by companies convicted in the corruption scheme—directly to PT Timah's control under Widiyantoro's leadership.

At a recent mining conference, a Ministry of Defence official explained that its role in the critical mineral sector was to create a "safe environment for development and investment." In other words, Indonesia now views tin not just as a commodity, but as a strategic national security asset requiring military-grade control.

When the State Becomes the Black Box

The crackdown's mechanics reveal a significant issue with transparency. PT Timah controls 125 mining permits covering 473,000 hectares, with 117,000 hectares concentrated in Bangka Belitung—the island chain that supplies nearly one-fifth of global tin production. Artisanal miners who once operated in legal gray zones have been forced into two choices: formalize under PT Timah's umbrella or face prosecution.

The state-military monopoly:

Controls both extraction and processing , eliminating independent verification points;
Runs overseer "task forces" like the Nanggala unit, which reports directly to Widiyantoro and has identified "powers we don't control" backing illegal operations; and,
Plans offshore expansion to target Batu Beriga, a protected marine habitat, under the banner of "national resource security."

When the state acts as miner, regulator, and military-backed enforcer simultaneously, independent auditing is nearly impossible. This is an opaque supply chain.

The Cost of Opacity in Supply Chains

For global technology and renewable energy sectors, the militarization of Indonesian tin is is a systemic compliance risk . Indonesia accounts for approximately 30% of global tin production, with Bangka-Belitung alone supplying nearly one-fifth of the world's total. As tin becomes "opaque" under PT Timah's state-military monopoly, it creates immediate friction with a tightening web of global regulations spanning multiple jurisdictions.

Under the EU's Corporate Sustainability Due Diligence Directive (CSDDD) , companies are legally required to map their supply chains beyond Tier 1 suppliers and address adverse human rights and environmental impacts. The directive complements the EU Conflict Minerals Regulation (2017/821), which specifically targets tin, tantalum, tungsten, and gold (3T + G), requiring importers to conduct due diligence on smelters and refiners. In the US, too, section 1502 of the Dodd-Frank Act requires companies to trace 3T + G minerals back to smelters and refiners.

The origin and downstream supply chain of one fifth of the world’s tin supply sources from a state-sanctioned entity: problematic to say the least under ESG frameworks that prioritize transparency and independent verification. How can third-party auditors verify environmental and labor standards when mining sites are managed by military-backed task forces like Nanggala, which reports directly to a retired general?

Risk Quantified

The $20 billion corruption scandal revealed that "government oversight" was previously a facade for laundering. Replacing that facade with military command shielded risk from scrutiny. Companies relying on a "government crackdown" narrative as due diligence cover may face significant reputational damage and legal penalties if componentry is publicly linked to unresolved environmental destruction in Bangka-Belitung and systemic graft and corruption.

Under CSDDD, non-compliance can result in fines up to 5% of global turnover . For a major semiconductor manufacturer with $50 billion in annual revenue, that's a potential $2.5 billion penalty—far exceeding the cost of robust supply chain mapping.

Indonesia's tin sector transformation quietly reshaped global supply chains in real time. For procurement officers at semiconductor manufacturers, EV battery producers, and solar panel suppliers, the challenge is no longer simply avoiding "conflict minerals." It is proving the legitimacy of tin sourced from a system where the state acts simultaneously as miner, regulator, and military enforcer.

This is where conventional due diligence fails. Standard screening tools flag "government enforcement action" as a positive signal. But when enforcement consolidates control rather than creates transparency, compliance teams face an audit impossibility: How do you verify what you cannot independently access?

Evidencity's Illicit Network Intelligence (INI) reveals the hidden networks, beneficial ownership structures, and military-state connections that surface-level screening misses.

Indonesia's crackdown has made risk invisible. And in 2026, invisibility is liability.

When Courts Fail to Enforce Forced Labor

Tue, 13 Jan 2026 17:02:30 GMT

Brazil's Labor Ministry defied a judicial order to expose corporate slavery—revealing how political power makes documented exploitation invisible to compliance teams

Brazil's federal government missed a court-ordered deadline on 18 December 2025. Five days earlier, Judge Katarina Roberta Mousinho de Matos had commanded the Labor Ministry to add three companies to Brazil's Lista Suja —the official registry of employers caught using forced labor. The deadline passed. The Ministry did nothing. A $3,720 daily fine began accumulating against the public treasury.

JBS Aves was the company at the center of the standoff. It is the poultry subsidiary of JBS S.A., one of the world's largest meat companies with operations across six continents and annual revenues exceeding $60 billion. In December 2024, labor inspectors in Passo Fundo, Rio Grande do Sul, had rescued ten workers from conditions Brazilian law classifies as analogous to slavery—sixteen-hour workdays, workers fed chickens discarded as "below JBS standards," and debt bondage arrangements where employees worked to repay charges for transport and meals.

The government's defiance isn't accidental. It follows an unprecedented intervention by Labor Minister Luiz Marinho, who in September 2025 used an obscure 1943 legal mechanism to erase three completed forced labor investigations from official records. The workers were rescued. The conditions were documented. But administratively, and for compliance check purposes, the slavery never happened.

The Invisible Override

The mechanism Marinho deployed is called "avocação"—a provision dating to 1943 that allows ministers to personally review enforcement decisions. It had never been used to overturn completed forced labor investigations after workers were already rescued. Marinho changed that, calling three cases to his desk after auditors had finished their work; all appeals had been exhausted, and companies were scheduled for Lista Suja publication.

The timing was crucial. Brazil's Lista Suja updates semi-annually. Marinho invoked avocação just before scheduled publication dates in September and October 2025, preventing JBS Aves, Santa Colomba Agropecuária, and Apaeb (a sisal fiber cooperative) from ever appearing on the registry. Standard due diligence processes—screening suppliers against the Lista Suja, checking enforcement databases, verifying compliance certifications—showed nothing. The companies remained “clean.”

The federal legal counsel (AGU) provided cover, arguing the intervention was justified given "the exceptional gravity of the case, the economic relevance of the companies involved, and the public interest in uniform legal interpretation." In her December ruling, Judge Matos noted the AGU had admitted to "robust indications" of slavery but recommended review based on "economic repercussions"—making explicit that economic importance, not legal standards, drove the decision.

The Institutional Revolt

The response from within Brazil's labor enforcement system was immediate and unprecedented. Multiple state-level coordinators of the anti-slavery inspection program resigned in protest. On September 30, 2025, Anafitra (the national association of labor inspectors) filed a constitutional challenge with Brazil's Supreme Court arguing the minister's actions violated fundamental principles of inspector independence.

The legal challenge centers on Brazil's international obligations. As a signatory to ILO Convention 81, Brazil must ensure labor inspection remains "free from any improper external influence." The Inter-American Court of Human Rights reinforced this in its 2016 Fazenda Brasil Verde ruling, holding Brazil internationally responsible for failing to investigate forced labor. The court ordered Brazil to ensure administrative mechanisms don't obstruct investigations into slavery—precisely what ministerial avocação achieves.

Mário Diniz, an Anafitra coordinator, framed the systemic problem: "This creates a third appeals instance that doesn't exist in law. If the minister can overturn any completed investigation based on a company's economic importance, the entire technical inspection system becomes optional for powerful companies."

The Public Labor Prosecutor's office (MPT) escalated further, filing suit to force Lista Suja inclusion. Judge Matos ruled in their favor on December 2, 2025 calling the minister's intervention a "deviation from purpose" that created a "regime of exception for large companies." She explicitly prohibited future use of avocação to delay or prevent Lista Suja publication and warned that continued interference could constitute criminal disobedience, administrative abuse, and violations of democratic rule of law.

The government appealed and continues to refuse compliance. As of early January 2026, JBS Aves, Santa Colomba, and Apaeb remain absent from the Lista Suja despite court orders and accumulating fines. The Labor Ministry claims it will wait until the scheduled May 2026 update—ignoring that dozens of companies have been added or removed outside regular publication cycles when courts ordered it.

The Compliance Challenge

For corporate compliance teams, this creates a category of invisible risk that conventional screening cannot detect. A supplier checks out as “clean” because it is not on the Lista Suja. The company appears in no enforcement databases. Standard certifications show no flags.

JBS operates as a major global supplier, publicly traded on both the New York and São Paulo stock exchanges, employing 158,000 workers in Brazil alone. Companies sourcing Brazilian poultry, beef, or leather through JBS supply chains face exposure under multiple regulatory frameworks: the UK Modern Slavery Act, Germany's Supply Chain Due Diligence Act, the EU's Corporate Sustainability Due Diligence Directive, and the US Uyghur Forced Labor Prevention Act. All require companies to identify and remediate forced labor in their supply chains.

But identification depends on visibility. When a government can administratively erase documented slavery with a ministerial signature—and then defy judicial orders to publish it—compliance processes built around official registries fail completely. The Lista Suja was created in 2003 specifically to provide transparency. Since then, Brazil has rescued over 65,000 workers and paid more than R$155 million in back wages. The system worked for two decades. Until political intervention made it optional for economically significant companies.

This is why supply chain transparency requires big data and data based on ground-sourced information. When governments can make forced labor invisible even to courts, seeing what conventional tools miss isn't just better practice—it's the only way to avoid liability that exists nowhere in the official record, protected by ministerial decree and governmental defiance of judicial authority.

Mining Slaves in Central African Republic Reveal a Billion dollar Smuggling Ring

Thu, 08 Jan 2026 10:50:53 GMT

A Chinese embassy warning has fingered what NGOs and media outlets have been reporting for years: a 60 billion gold smuggling network operates across Africa, and modern compliance frameworks are blind to it.

In November 2025, China's embassy in the Central African Republic (CAR) warned Chinese citizens seeking work in the country's gold fields that they risk becoming "mining slaves.” This warning points to a multi-billion dollar blind spot that facilitates forced labor at an industrial scale in global gold supply chains, one that has grown significantly as the price of gold has reached historic levels on global markets.

According to NGOs and media reports, the CAR produces between two and six tonnes of gold annually. Official records report approximately one tonne; this means that over 90% of the country's gold production is smuggled and unreported. It quietly crosses borders en route to Dubai's gold markets where it is mixed with legally mined gold, and enters global commerce with no traceable connection to its origin.

CAR accounts for less than 0.2% of global gold production, so its impact in broader global gold markets is very small. CAR’s story, however, reveals how illicit networks operate at scale, and why it’s so hard to detect and deter these illicit networks.

SwissAid's May 2024 report documented that smuggled African gold represents approximately 13% of global production annually. At 2025 gold prices, that's 435-439 tonnes worth approximately $59-61 billion entering global markets through undocumented networks that operate in a similar fashion to those in CAR: armed group control, systematic document falsification, origin laundering through regional hubs, and Dubai as the mixing point that obfuscates sourcing.

The pathways documented in CAR, such as the Garoua-Boulai to Cameroon smuggling route, false origin declarations at ports of entry, and Dubai refineries looking the other way, all point to one bottom line: survey-based compliance is not enough. This type of compliance is replicated across the DRC, Sudan, South Sudan, and Uganda. Different countries, identical architecture.

Multiple investigations have documented the smuggling routes. According to The Sentry's 2023 analysis and recent research on the Wagner Group by the Global Initiative against Transnational Organized Crime, CAR gold moves West through Cameroon, or East through Chad, Sudan, and South Sudan. An estimated 95% of East and Central African gold eventually lands in Dubai.

The scale reveals systematic laundering. SwissAid's November 2025 report documented the UAE importing 748 tonnes of gold from Africa in 2024—an 18% increase from the previous year. Uganda exported 31 tonnes to the UAE in 2024, up from 14 tonnes in 2023. Rwanda exported 19 tonnes, up from 13.8 tonnes. None of these countries have industrial mines or sufficient artisanal output to justify such export volumes. They serve as transit hubs for smuggled gold from neighboring countries, including CAR.

Behind CAR's mining sector sits the Wagner Group. The Russian paramilitary organization's Ndassima gold mine generates approximately $100 million annually, according to the Global Initiative's October 2025 investigation. Yet official documents show zero declared output and no recorded exports. Sources indicate the gold is smuggled abroad on covert flights through Somalia to Dubai. The London Bullion Exchange’s Responsible Sourcing June 2025 newsletter explicitly mentioned Wagner operations in CAR. This is a rare public acknowledgment of malfeasance by the industry's leading authority.

Existing frameworks can't see illicit gold.

The London Bullion Market Association (LBMA) requires annual third-party audits of all Good Delivery List refiners, following OECD Due Diligence Guidance. Yet a 2023 EU assessment scored the program as only "partially aligned" due to uneven implementation by refiners and assurance providers – a gap serious enough that LBMA issued a rare public "Sourcing Advisory" on the UAE in 2024. New transparency requirements taking effect in January 2026 mandate public disclosure of refiner and exporter identities in "red flag" locations, including CAR, which is explicitly identified as conflict-affected and high-risk.

Again, a core structural problem is survey-based compliance.

Companies request Conflict Minerals Reporting Templates from suppliers. Suppliers self-report their sources. Refiners self-report their inputs. When gold is smuggled from CAR to Cameroon with false documentation, melted with other sources, and sold with "clean" origin papers, every survey in the chain shows compliant sourcing.

In the United States, Dodd-Frank Section 1502 covers gold from ten countries, including CAR. Publicly-traded companies must conduct origin inquiries and file annual reports with the SEC. After a 2017 court ruling, however, the SEC stopped requiring specific product labeling or independent audits. Companies can indefinitely report origins as "undeterminable" as long as they describe due diligence efforts.

The framework's weakness is measurable.

A 2024 Government Accountability Office (GAO) study found the SEC disclosure rule "has not reduced violence in DRC and has likely had no effect in adjoining countries." Violence has spread around informal gold mining sites. GAO noted gold is "more portable and less traceable than the other three minerals." The other three being tin, tungsten, and tantalum .

Once gold is melted, the origin becomes undetectable via chain of custody documentation. Refining defeats traceability, unless forensic methods are used, which are not standardized across the supply chain because these methods are costly and time consuming. When 97.5% of a country's production enters commerce with false documentation, compliance frameworks fail.

They track documentation, not gold composition.

Standard due diligence was built for documented supply chains. It fails completely when facing CAR's reality: artisanal operations with no licenses, armed group control outside government authority, and systematic origin falsification at every border crossing.

This explains in part how 283 U.S. publicly-traded companies could list a Belgian refinery in their 2018 SEC filings after it had failed its Responsible Minerals Initiative (RMI) audit and been removed from the approved list. It wasn't deception; it was systemic blindness. When companies admit they "lack sufficient information to determine origin," as Sony did in its 2017 filing, they're acknowledging a fundamental truth: survey-based compliance cannot detect smuggling networks built on document fraud.

The new LBMA transparency requirements taking effect January 2026 will force refiners to publicly disclose high-risk suppliers and locations. Companies downstream, toward the market, will face harder questions: not just "did you conduct due diligence?" but "can you demonstrate actual visibility into origins?"

When China's embassy warned about "mining slaves" in November 2025, it documented what compliance frameworks miss. This isn't a CAR problem requiring better governance. It's a visibility problem requiring different tools, and better data.

Evidencity's Illicit Network Intelligence data maps what conventional compliance cannot see: the relationships, entities, and pathways moving gold from mine to market. The networks operating in CAR operate regionally; their five tonnes reveals how a total of 439 tonnes or USD59 billion in annual value is functionally invisible to standard due diligence, exposing refineries, miners, and the banks that finance them to a multinational smuggling network that is invisible to standard screening practices.

The Relationships that bind the ELN to Venezuela

Tue, 06 Jan 2026 06:37:37 GMT

Business, politics, and the drug trade define how the Venezuelan government works directly with the ELN

Evidencity’s work in illicit networks got off to an unexpected start this week with the recent news of Nicolas Maduro’s arrest and capture. Candidly, our team read the news with mixed emotions. Many of our current and former employees and their families are either Venezuelan or deeply engaged with the Venezuelan diaspora, so we join them in celebration but look forward with an amount of concern over what’s next.

Against this backdrop, we took another look at the Ejercito de Liberación Nacional (ELN), a US-designated Foreign Terrorist Organization (FTO). Given the news swirling about Venezuela’s future, we thought it prudent to review our Illicit Network Intelligence on this multi-national criminal organization.

The ELN in 2026 is a Colombian-Venezuelan network of security professionals, politicians, business associates, logisticians and low-level operators, some of whom are forced to work. Though its historical roots are Colombian, the ELN has evolved over the decades from an idealistic Colombian revolutionary paramilitary group to an international criminal organization, leveraging control of territory to make money on the licit and illicit movement of people and product, mostly across and through Colombian and Venezuelan territory, specifically along the Colombian-Venezuelan border.

The ELN has limited international reach but within Colombia and Venezuela the organization manages a broad financial and logistics network that extends along the Venezuelan-Colombian border. It has confirmed presence in the following Venezuelan states: Zulia, Táchira, Apure, Amazonas, Monagas, Bolívar, and Anzoátegui. Reportedly, the organization operates hand in glove with the Venezuelan military and other public security forces like siblings: sometimes they fight but they mostly get along.

After reviewing what we have on this group in our Illicit Network Intelligence dataset, we’ve pulled out some of the more interesting individuals and relationships that tie the ELN to Venezuela.

Venezuela’s Interior Minister, Diosdado Cabello, who is considered a close supporter of Nicolas Maduro and Venezuela’s acting president, Delcy Rodriguez, works closely with a Coronel in the Venezuelan National Guard (GNB). His name is Alexander Enrique Granko Arteaga. As head of the Directorate of Special Affairs (DAE) of the Directorate General of Military Counterintelligence (DGCIM), Granko Arteaga reportedly works closely with Minister Cabello.

In 2022, Col. Granko Arteaga was identified by the UN Independent International Fact-Finding Mission on Venezuela as one of the regime's most systematic perpetrators of torture, arbitrary detention, and forced disappearances. He is also one of the primary liaisons between the Venezuelan government and the ELN.

In mid-2025, José Bladimir Bigott Portela, aka El Mencha, who is an ELN commander for the Frente Oriental Domingo Laín Sánz ran for a municipal council seat in the small town of Elorza in the Venezuelan border state of Apure. Regional news outlet, Infobae, picked up on the news that Bigott’s campaign was unique because he was locally known to be an ELN leader, yet for a time he had the public backing of Venezuela’s leading political party, the PSUV, until the party’s local leadership decided the ELN leader was too much of a liability for the party brand.

Mr. Bigott Portela and his associate, a man known as El Ojón (Big Eyed), ran an extortion ring with local DGCIM operators, who would detain locals and release them once cash payments were secured. When a disagreement surfaced and El Ojón was arrested by some of the same DGCIM team who he had worked with, Mr. Bigott Portela was left alone due to the direct intervention of Grako Arteaga. The two men might have even been friends. Grakeo Arteaga had donated to Mr. Bigott Portela’s campaign a white Toyota Hilux.

Internal DGCIM reports from March 2024 further confirm Col. Grako’s relationship with the ELN, documenting Grako’s name as it consistently surfaced in field reports on drugs trafficking from the Sierra de Perijá to the Caribbean, a known ELN trafficking route. Though Grako was briefly detained he eventually returned to his position. One of the DGCIM generals associated with the report was imprisoned, and all subsequent investigations were dismantled.

Meanwhile, the relationship between the ELN and the Governor of the Venezuelan state of Táchira further details how the Venezuelan government, from national to local, maintains operative and lucrative ties to the former revolutionary organization.

In 2021, Venezuelan politician Freddy Bernal won the election for the governor’s seat in Tachira, after having been appointed by Nicolas Maduro as the “protector of Tachira” in 2017. During the election, the ELN provided support through voter intimidation, opposition suppression, and forced voting. After six years of territorial control in Táchira, the ELN was well positioned to facilitate a win for their chosen candidate.

Now entering their sixth year of business, the ELN-Bernal relationship continues today whereby the ELN provide border control services, monitoring and “taxing” of smuggling routes, political enforcement, and kickbacks on revenue generated from cocaine smuggling and extortion.

In exchange, Bernal provides political protection and a degree of impunity for ELN leadership and operators, some coordination with the broader public security forces, access to state resources for fuel and some machinery, and a safe haven from Colombian government authorities.

For an in-depth review of the ELN's presence in Venezuela, see InSight Crime's excellent work in a five-part series .

Forced Labor is not just a Global South Challenge

Fri, 12 Dec 2025 11:37:58 GMT

Finland reveals how forced labor lurks where we least expect it

The community of folks working on the modern slavery problem often talk about China. When it’s not China, there’s often talk of abuses in the Global South. All of these conversations are relevant and important. But once in a while, we also have to look at the places where no one expects slavery to exist, much less thrive.

So let’s look at Finland.

But first, some context. Northern Europe’s forest sector has for many years been considered a top source destination for fibre that in turn produces low-margin pulp and paper. But in 2024 local and limited international reporting began uncovering localized abuses that, over time, appear to have been part of a broader system of natural resource mismanagement.

According to an article written by Kelsey Pearlman of Fern, a 35-year old advocacy organization focused on protecting the world’s forests, forced labor is a symptom of a deeper root cause.

“When forests are managed primarily as fibre factories for low-margin pulp and paper production, the pressure cascades down. Companies squeeze suppliers on price. Suppliers squeeze contractors. Contractors defy labour standards and environmental protection.”

And they might be right. According to a major Finnish newspaper, Helsingin Sanomat, a significant labor trafficking scandal in the forestry industry saw some 200 workers, at least 50 of them Nepalese men, lured to the country’s forestry sector with the typical pattern of promises for dignified work, false documents that looked too good to be true, and promises for future wealth.

The Exploitation:

Workers paid up to €3,500 in recruitment fees
Arrived in debt, only option out was to work
18-hour workdays under exploitative conditions
Passport confiscation
Threats of dismissal if they complained
False promises about employment conditions and wages
Many workers left Finland immediately for other EU countries, suggesting the scheme also served as a secondary migration gateway

The Illicit Network:

Five suspects currently in custody, including:
A Ukrainian national
Nepalese recruiters
Two forestry companies registered in Sotkamo under investigation
Charges: aggravated human trafficking, aggravated extortion, organizing illegal immigration

This is not an isolated case of forced labor in Finland. The Regional State Administrative Agency for Eastern Finland has noted several other labor abuses in the country’s agriculture industry, specifically the industrial berry picking industry, where some 2,000 Thai nationals allegedly were forced to work in 2024 and 2025.

In March 2025, the CEO of Kiantama Oy, a Finnish company that picks and processes wild berries, was sentenced to 3.5 years in prison for human trafficking. The company was fined 100,000 euros, and 230,000 euros were forfeited by the Finnish government, labeled as illicit proceeds of crime.

Another company in the berry industry, Polarica, defends 77 counts of trafficking-related crimes. This case is ongoing as of this writing. A third company, Artic International is also under investigation for human trafficking.

Award-winning Finnish journalist, Paavo Teittinen, provides ongoing coverage of the Thai berry picker controversy among other forced labor scandals he’s investigated in Finland, many of which are summarized in his book, “The Long Shift – How Modern Slavery Took Root in Finland.”

In 2025, modern slavery is not just a Global South problem. It’s a global problem.

At Evidencity, we rely upon and learn greatly from the work of researchers, advocates like Kelsey and investigative journalists like Paavo to help us find the best sources of unstructured data that feed our work on illicit networks across the globe, not just in China and the Global South.

How criminal networks penetrate U.S. corporate systems: Why entity links matter

Fri, 21 Nov 2025 19:19:26 GMT

Recent investigations into Brazil’s most powerful criminal organisation, the Primeiro Comando da Capital (PCC) , reveal a glaring weakness in global anti–money laundering systems as even highly visible, publicly accused criminal actors appear to have built legitimate corporate footprints in the United States.

A C4ADS report titled "Billion-Dollar Blind Spot" uncovers how alleged PCC operatives — including individuals investigated for drug trafficking, international money laundering, and political financing — maintained active companies in Florida , accessing U.S. financial infrastructure with ease. These findings highlight an uncomfortable truth: criminal networks rely not on sophisticated new loopholes, but on the absence of comprehensive, connected, cross-jurisdictional data.

Criminal Networks Exploit Data Gaps—Not Just Legal Gaps

Consider the Bozhanaj–Cazula network . Two individuals—Marinel Bozhanaj and Edenilson Sebastião Cazula—were each independently scrutinised by Brazilian authorities for alleged involvement in cocaine trafficking and large-scale money laundering. Yet C4ADS shows that the two men quietly appeared together in Florida’s corporate registry, jointly establishing Bozhanaj Group Corporation in Miami in 2023.

Public filings alone indicated:

a shared company
shared addresses with other companies controlled by their family members
a continued operational presence in the United States despite ongoing criminal investigations abroad

The issue is not that the data didn’t exist. The issue is that no single system connects the dots .

The PCC’s Fintech Laundering Scheme Shows Why Entity Linkages Matter

A second example—the Yamawaki network—demonstrates the scale of risk created by fragmented data.

João Gabriel de Mello Yamawaki, a Brazilian businessman arrested in 2024, allegedly led a laundering scheme that moved 8.6 billion reais (approx. USD 1.75 billion) using fintechs and an ecosystem of front companies. Yet years earlier, he had already registered two companies in Florida (Las Americas USA LLC and Unique Business USA LLC) with officers linked to Brazilian municipal political structures and to a Brazil-registered digital payments company he controlled.

These cross-border ties were visible only if one could simultaneously access:

Brazil’s corporate databases
Florida state corporate filings
fintech regulatory data
judicial records
political finance disclosures

Such connections require entity resolution across multiple data types and jurisdictions — a capability most organisations simply do not have.

Why These Cases Prove the Need for Unique Data

The PCC examples illustrate several systemic weaknesses that criminals exploit:

1. Corporate registries operate in silos

Florida had no visibility into ongoing criminal investigations abroad. Brazil had no visibility into U.S. company formations. Evidencity's unique data can bridge this by integrating corporate records across dozens of countries into one unified dataset.

2. Public records are often technically accessible but practically unusable

Florida’s Sunbiz records, Brazilian corporate filings, Panama Papers leaks, and political finance disclosures exist, but none speak to each other. Evidencity’s relationship mapping tools turn scattered data into a coherent investigative picture.

3. Criminal networks abuse legitimate structures

Shell companies, family-run LLCs, front import–export firms, and fintech intermediaries are all types of companies that the PCC uses. These are the same tools ordinary businesses use. That means identifying risk requires pattern recognition , not just keyword searches. Evidencity’s team of analysts and proprietary methods flag patterns such as shared addresses, repeated officer overlaps, and cross-border company clusters.

By providing a unified, cross-border, multi-source data environment, we make it possible to detect:

hidden corporate relationships
company ecosystems
political infiltration patterns
cross-jurisdictional laundering conduits

Discover more about Evidencity's unique data: https://www.evidencity.com/uniquedata

DRC’s cobalt quotas: A new test for transparency & traceability

Wed, 12 Nov 2025 13:23:05 GMT

The Democratic Republic of the Congo (DRC) holds a dominant position in the global cobalt market, supplying about 70 per cent of the world’s output. In 2025, the country’s efforts to tighten control over this critical resource took a new turn.

After an eight-month export ban that rattled global supply chains, Kinshasa replaced the ban with a cobalt export quota system — a move designed to stabilise prices, strengthen state oversight, and formalise trade. The policy marks a major shift in how one of the world’s most scrutinised minerals is tracked, taxed, and traced.

The quota regime, implemented on 16 October 2025, is administered by the state regulator ARECOMS . Each approved exporter receives a yearly quota based on its average production and exports from the previous three years. A separate “strategic quota” is retained by the state for special projects and national priorities. Exporters must pre-pay taxes, present environmental compliance certificates, and undergo inspections at authorised depots and border crossings.

Officials say the aim is to reduce over-production that previously depressed cobalt prices and to ensure a transparent, auditable trail for every shipment leaving the country. The earlier export ban, introduced in early 2025, had already lifted prices by more than 90 per cent from multi-year lows. The government now wants to maintain that stability through controlled export volumes rather than outright restrictions.

Traceability on paper vs. practice

In theory, the quota system could improve traceability by linking each tonne of exported cobalt to a verified source and a recorded tax payment. In practice, the framework has introduced new uncertainties. The allocation process is not public , and the criteria for the discretionary “strategic quota” remain unclear. Civil-society monitors warn that opaque quota management risks creating “negotiation-based compliance,” where exporters pay informal fees to secure or adjust allocations.

The DRC’s cobalt sector has long struggled with fragmented oversight. Multiple agencies share jurisdiction, while data on production and exports are not consistently published. Without regular disclosure, companies cannot easily confirm that their suppliers operate within legal limits — a problem compounded by frequent checkpoints along transport routes, where informal tolls and under-reporting are common.

Artisanal cobalt: Still outside the net

The quota system applies only to industrial producers . Artisanal and small-scale mining (ASM) — which accounts for roughly a third of Congolese cobalt — is regulated separately. Under current law, all artisanal cobalt must be sold through the state-owned Entreprise Générale du Cobalt (EGC) , which holds exclusive rights to buy, process, and export ASM output. The intent is to centralise and formalise artisanal trade, preventing child labour and unsafe working conditions from contaminating the formal supply chain.

However, EGC’s operational reach remains limited. No processing plant is yet active, and most ASM material continues to pass through informal channels or intermediaries before export. The exclusion of artisanal production from the quota framework effectively widens the gap between traceable industrial supply and untracked artisanal output . Analysts fear this separation could push more ASM material into smuggling routes, where it is blended with industrial cobalt and exported under false declarations.

Technology and verification efforts

To address these weaknesses, the DRC and its partners are testing digital tracking tools. The Re|Source platform — a blockchain initiative led by Glencore, CMOC, Umicore, and Tesla — is piloting traceability from mine to refiner, with each transaction recorded on a tamper-proof ledger. This model allows downstream buyers to verify that specific batches of cobalt come from approved sites and pass through compliant refiners.

At the same time, the government is tightening documentation at laboratories and border posts, requiring every export batch to match an authorised quota and environmental permit. These efforts, together with donor-supported projects on mine site certification and traceable payments to artisanal cooperatives, indicate a gradual move toward data-driven oversight.

Yet the system remains fragmented. Blockchain pilots cover industrial producers, while artisanal cobalt remains mostly offline. Public access to official data — such as production statistics, quota allocations, and ownership records — is still limited. Without integration across these systems, traceability remains partial and vulnerable to manipulation.

Governance and data transparency

The DRC’s mining code includes disclosure requirements consistent with the Extractive Industries Transparency Initiative (EITI) , but implementation lags. Many mining contracts, export figures, and beneficial ownership details are either unpublished or outdated. Transparency advocates argue that until these datasets are made accessible and routinely updated, technological fixes will have limited effect.

The government has acknowledged these concerns and pledged to strengthen oversight capacity. ARECOMS officials have signalled interest in publishing periodic quota summaries and engaging independent auditors, but as of November 2025, no such disclosures have appeared.

Implications for supply chain due diligence

For companies, the DRC’s evolving cobalt policy means more regulation but not yet more predictability. The new system requires exporters to document provenance and compliance, but buyers still face uncertainty over how quotas are enforced and whether artisanal cobalt can be reliably excluded from formal supply.

The DRC’s quota system represents progress toward state control and potential transparency, but its success will depend on open data, coordinated enforcement, and the integration of artisanal mining into formal traceability frameworks. Until those conditions are met, cobalt from the world’s largest producer will remain only partially visible to the markets that depend on it.

Canada’s 2025 forced labor supply chain report: Key lessons for compliance & traceability

Wed, 05 Nov 2025 12:05:12 GMT

Canada has released its second annual report under the Fighting Against Forced Labour and Child Labour in Supply Chains Act , covering the 2025 reporting cycle. The results provide an important barometer of corporate preparedness for human rights due diligence, and a clear signal for organisations operating globally.

High policy adoption, but limited depth

The overwhelming majority of reporting organisations state that they have embedded responsible-business conduct policies (96.9%) and put forced-labour policies in place (83%). This suggests strong awareness and uptake of formal frameworks.

However, only 50% assess the effectiveness of those policies, dropping to 15.6% among government institutions . This gap between policy and performance remains a structural challenge across ESG domains. In forced labor risk management, it translates directly into blind spots where violations may persist undetected.

Raw materials and early-stage supply chains are the highest-risk zone

Entities most frequently identified raw materials and commodities as the highest-risk point in their supply chains. This aligns with well-documented human rights vulnerabilities in mining, agriculture, textiles, and other extraction-heavy industries.

Notably, entities also reported challenges beyond direct suppliers, recognising the importance of tier-two and upstream visibility .

For many organisations, this remains the hardest part of due diligence , and the one with the greatest impact on vulnerable workers.

Few organisations report actual remediation

91% of organisations stated that remediation did not apply to them, because they had not identified any forced labor or child labor incidents. Only 5% reported remediation actions.

In high-risk industries and sourcing countries, the absence of identified cases often points not to an absence of risk, but to insufficient detection .

Real progress requires not only policies and risk statements, but credible systems capable of uncovering abuses and responding meaningfully when they occur.

Enforcement in its infancy

No orders or prosecutions were recorded during the reporting period. This is unsurprising given that the Act only came into force in 2024, but it underscores the early stage of implementation. Over time, enforcement signals will be critical to drive more than procedural compliance.

What this means for business leaders

Canada’s findings mirror a global pattern: progress on policy and awareness, combined with limited visibility and weak remediation. For organisations operating across jurisdictions — including those preparing for emerging EU and US frameworks — the key lessons should be the following:

1. Move beyond disclosure toward verification.

Policies alone are insufficient. Investors, regulators, and civil society stakeholders expect evidence of implementation and impact.

2. Prioritise upstream traceability.
Forced labor risk is concentrated where transparency is weakest. Technology-enabled traceability, supplier mapping, and on-the-ground intelligence are becoming mandatory tools.

3. Treat remediation capacity as a core compliance capability.
Remediation should not be rare. It should be proactive, operationalized, and measurable .

4. Prepare for the convergence of environmental and human rights due diligence.
Material flow transparency is already required in sustainability regulation. Human rights due diligence will increasingly track alongside resource traceability frameworks, particularly in raw-materials-intensive sectors.

As regulatory regimes evolve, organisations will be judged not by statements of intent but by verifiable action, upstream visibility, and effective remediation. Those who build credible systems now across risk screening, supplier engagement, traceability, and incident response will be positioned not just to comply, but to compete.

Mapping illicit power: The RSF’s corporate network in the UAE

Thu, 09 Oct 2025 18:42:21 GMT

The October 2025 investigation by The Sentry into Sudan’s Rapid Support Forces (RSF) exposed a sophisticated business ecosystem that stretches from Darfur’s gold mines to company registers in Dubai.

Far from being an informal smuggling chain, the network resembled a distributed corporate structure — populated by real directors, legitimate-looking licences, and adaptive ownership. It demonstrates how paramilitary power in the 2020s relies less on weapons or ideology, and more on access to global markets and the ability to conceal that access through data-visible intermediaries.

What is the RSF

The Rapid Support Forces (RSF) are a powerful paramilitary group in Sudan, originally formed in 2013 from the remnants of the Janjaweed militias responsible for atrocities in Darfur. Officially integrated into Sudan’s security apparatus under former president Omar al-Bashir, the RSF evolved into a parallel army under the command of Mohamed Hamdan Dagalo (“Hemedti”) . The group controls major gold mining areas, extensive business interests, and foreign mercenary operations, giving it significant economic and political autonomy. Since Sudan’s 2023 civil conflict, the RSF has fought the national army for control of the country, financing itself through commercial and cross-border networks that blur the line between state and private power.

The structure of a paramilitary economy

At the heart of the system lies the Dagalo family , led by RSF commander Mohamed Hamdan Dagalo (Hemedti) and his brother Abdulrahim Dagalo . Their commercial flagship, Al Junaid Company for Multi Activities , long served as the RSF’s economic engine — handling gold extraction, livestock exports, and construction. As sanctions tightened after Sudan’s 2023 civil conflict, a constellation of firms appeared in the United Arab Emirates , mirroring Al Junaid’s business lines while distancing the Dagalos from direct ownership.

Among the companies cited in the report are Tradive General Trading LLC , GSK Advanced Business LLC , Capital Tap Holding LLC , Al Jil Alqadem General Trading , Horizon Advanced Solutions , and Natwest Logistics LLC . These firms, formally registered in Dubai, declared activities ranging from gold and vehicle trade to consultancy and project management.

Behind them stood a small circle of recurring individuals:

Mazin Fadlalla , a Sudanese national linked to multiple RSF-associated entities, serving as director or shareholder across Tradive, GSK, and Horizon.
Abozer Habib , appearing in GSK and Natwest Logistics, is reportedly responsible for coordinating procurement and transport.
Emirati partners such as Naser Alhammadi and Essa Almarri , who provided local registration and commercial cover.

Corporate filings reveal overlaps in addresses, contact numbers, and even website domains. Several company websites were hosted on the same IP range as Al Junaid’s Sudanese operations, a digital clue suggesting continuity despite formal separation.

Adaptive behaviour as a risk signal

Examined over time, the network displays distinct adaptive behaviour — an intelligence asset in itself. Between 2023 and 2025, as Western sanctions targeted RSF-linked entities, shareholdings in some companies shifted to new proxies days before or after designations. Capital Tap Holding and Horizon Advanced Solutions, for instance, altered their ownership structures immediately before U.S. and EU measures were implemented.

Three recurring tactics emerge:

Ownership cycling – Fadlalla or Habib transferring shares to lesser-known associates as scrutiny increased.
Purpose shifting – entities registered for consultancy or IT later adding gold trading or logistics to their activity list.
Temporal clustering – new firms established within weeks of sanctions on previous ones, replicating functions almost identically.

Such manoeuvres create measurable temporal signatures of risk: bursts of incorporation, rapid turnover of directors, and thematic repetition in trade categories. For analysts, these are indicators of organised continuity rather than isolated coincidence.

Concentration and replication of control

Although dozens of companies were involved, functional control rested with a few intermediaries bridging the RSF and UAE commercial ecosystem. Fadlalla and Habib acted as bridging nodes , connecting military financing in Sudan to corporate legitimacy in Dubai. Their repeated presence across unrelated firms underscores how small personal networks can sustain large-scale economic operations.

From a systems perspective, this produces both concentration and redundancy. The network depends on a handful of operators — yet those operators can re-create legal vehicles at will. Enforcement, therefore, requires monitoring recurrence rather than individual company names.

Data signatures of coordination

Beyond ownership, the report highlights quantifiable data correlations typical of proxy commerce:

Multiple firms shared the same registered office in Dubai’s Business Bay district.
Websites for GSK Advanced Business, Tradive, and Natwest Logistics used identical design templates and were hosted on related servers.
Customs data pointed to overlapping trade in gold, tyres, and vehicle parts , commodities directly relevant to RSF logistics.

Each indicator, trivial in isolation, becomes meaningful when aggregated. The overlap of domain metadata, commodity codes, and corporate addresses forms a composite risk signature — a reproducible model for identifying successor networks elsewhere.

Systemic vulnerabilities

The RSF’s commercial ecosystem thrived not because of extraordinary secrecy but because of regulatory asymmetry . Until recently, the UAE’s beneficial-ownership regime left wide discretion over disclosure; enforcement relied on company self-reporting. This environment allowed sanctioned actors to operate through nominally independent local partners without immediate detection.

The case illustrates how armed groups exploit the very mechanisms of globalisation — open trade, light corporate registration, and fragmented data governance — to launder resources into legitimacy. The weakness lies less in intelligence capacity than in data interoperability : ownership, trade, and sanctions datasets rarely intersect in real time.

Understanding networks rather than entities

The RSF’s financial infrastructure demonstrates a broader analytical point: risk is relational. Each company may appear compliant, but collectively they constitute a functional system linking resource extraction, capital movement, and political violence. Mapping that system requires connecting discrete datapoints — director histories, registry timestamps, trade patterns — into a coherent temporal network.

When analysed this way, illicit finance looks less like a set of secret accounts and more like an adaptive graph : nodes representing legal entities, edges representing shared identifiers, and time as the axis of mutation. Such mapping transforms qualitative allegations into structural evidence — revealing not only who benefits, but how the mechanism endures.

Supply chain enforcement in 2025: Why the cost of non-compliance is rising fast

Thu, 02 Oct 2025 16:06:58 GMT

The past year has marked a turning point for corporate supply chain due diligence. Across the EU, UK, and US, regulators and courts are beginning to show that “light touch” expectations are over. Companies that fail to identify and act on forced labor or human rights risks are increasingly facing real costs — whether through fines, blocked shipments, or court-ordered corrective measures.

At Evidencity, we track these developments closely, because we believe that investing in data-driven due diligence is cheaper than the price of inaction.

The Road Ahead

In the EU: The Corporate Sustainability Due Diligence Directive (CSDDD) is expected to be adopted by 2025/26, with obligations phased in from 2028. This will mandate human rights and environmental due diligence across global supply chains.

In the UK: Lawmakers are pushing hard for mandatory due diligence legislation and an import ban. New laws could be on the table by 2026.

In the US: Enforcement of UFLPA will only intensify, with more high-risk sectors added and potential reforms to close loopholes like the de minimis import exemption.

By 2027, when the EU’s forced labor ban becomes operational, global companies will be operating under a far more hostile enforcement environment than ever before.

Enforcement in 2025: What happened in numbers

United States – UFLPA reshapes global sourcing

According to U.S. Customs and Border Protection (CBP), as of August 1, 2025 , more than 16,700 shipments valued at nearly USD 3.7 billion have been stopped under the Uyghur Forced Labor Prevention Act (UFLPA) . Over 10,000 shipments worth nearly USD 900 million were denied entry .

In the first half of 2025 alone, 6,636 shipments were detained — already surpassing all of 2024 . Automotive parts made up 86% of all detentions , forcing carmakers to urgently re-map suppliers.

UFLPA, in force since June 2022, creates a rebuttable presumption that any goods linked to Xinjiang are made with forced labor, unless importers can prove otherwise. In 2025, DHS expanded enforcement priorities to steel, copper, lithium, aluminum, and red dates , widening the sectors under scrutiny.

European Union – building a legal architecture

France’s Duty of Vigilance Law produced its first major conviction when the Paris Court of Appeal ordered La Poste to revise its vigilance plan (December 2023, upheld June 2025) . In Germany, BAFA received 30 complaints covering 40 companies , launching six investigations under its Supply Chain Act.

The German Supply Chain Due Diligence Act (LkSG) entered into force in 2023, applying to companies with ≥3,000 employees (expanded to ≥1,000 in 2024). Penalties can reach EUR 8 million or 2% of global turnover .

The EU Regulation on Prohibiting Products Made with Forced Labor entered into force in December 2024. Enforcement will begin on 14 December 2027 , when authorities can seize and remove goods from the EU market .

Europe is layering enforcement — national regulators are already active, EU-wide bans are on the horizon, and sweeping due diligence duties are to follow, despite discussions on simplification.

United Kingdom – still lagging, but change is coming

According to the UK Parliament’s Joint Committee on Human Rights, no fines or prosecutions have ever been issued under the Modern Slavery Act .

The Modern Slavery Act 2015 only requires companies to publish annual transparency statements — even “no action taken” statements are allowed. In March 2025, the government issued new guidance pushing firms toward better disclosure, but without legal force. In July 2025, Parliament’s Joint Committee called for a mandatory due diligence law with stiff penalties and a forced labor import ban within 12 months .

The UK risks becoming a “dumping ground” for forced labor goods if it does not legislate. The momentum suggests new laws could arrive by 2026.

Our Take

For decision-makers, the lesson from 2025 is unambiguous:

The rules are multiplying. What was once voluntary CSR is becoming hard law.

The penalties are growing. From multi-billion-dollar U.S. shipment seizures to EU turnover-based fines, regulators are raising the stakes.

The window to prepare is closing. By 2027, non-compliant supply chains will not just face reputational risk. They will also lose access to major markets.

Evidencity equips organizations with the data they need not only to comply, but to mitigate risks early, and stay ahead of fast-moving regulatory demands through dynamic insights for the present and the future.

How sanctions lists work and their limits

Fri, 26 Sep 2025 10:23:56 GMT

Sanctions lists are one of the most common tools in compliance and due diligence. They flag people, companies, vessels, and states that governments or international bodies restrict. Checking names against these lists is often the first step in risk screening. But relying on them alone creates blind spots.

What sanctions lists are

The main lists come from the US (OFAC), EU, UN, and UK. They aim to block sanctioned parties from finance, trade, or political legitimacy. A name on the list can mean frozen assets, travel bans, or trade restrictions.

How sanctions lists are compiled

Sanctions decisions are political and legal. Governments weigh intelligence, security concerns, and foreign policy goals before designating someone. Updates can be slow, and every jurisdiction applies its own criteria. This creates gaps — someone sanctioned in the US may still operate freely in Europe, and vice versa.

The limits

Sanctions lists have several weaknesses that make them unreliable as a sole control:

Incomplete coverage : Many high-risk actors never appear. Sanctioning requires political will, evidence, and process. Not every bad actor meets those thresholds, meaning plenty of problematic individuals and companies stay “off the radar.”

Timing delays : Names often appear after damage is already done. A company may have laundered money, supported armed groups, or supplied sanctioned regimes for years before it finally lands on a list.

Political selectivity : Designations reflect political priorities as much as legal standards. Some actors escape sanctions due to strategic alliances, while others are added quickly to make a political statement.

Jurisdiction gaps : Sanctions are not universal. Someone blocked by OFAC may operate in Asia or Africa without issue. The same vessel could be sanctioned in one region but continue moving goods elsewhere under a different flag.

False sense of security : Lists can be used as a box-ticking tool. If compliance stops at “no match found,” organizations risk missing deeper ties, shell structures, or front companies set up to bypass sanctions.

Pre-sanction screening

Because of these weaknesses, due diligence cannot rely only on official lists. Pre-sanction screening is about identifying risks before they become official designations.

How it works:

Red flag identification : Monitoring for political exposure (PEPs), ties to high-risk industries like arms, mining, or energy, and links to already-sanctioned individuals or entities.

Ownership and control checks : Mapping beneficial ownership and control structures can expose hidden ties. A company may not be sanctioned, but if it is majority-owned by a sanctioned individual, it still carries risk.

Adverse media and OSINT : Local-language news, investigative reporting, and open-source data often surface issues years before regulators act.

Network analysis : Studying business partners, subsidiaries, and joint ventures shows indirect exposure that lists do not capture.

Pre-sanction screening is not a prediction tool — it does not guarantee who will be sanctioned. But it builds a picture of likelihood. It helps organizations avoid entering relationships that could collapse if sanctions arrive, and it gives time to exit high-risk ties on their own terms rather than under regulatory pressure.

Why it matters

Sanctions lists are a baseline, not a safeguard. They tell you who is officially blocked, but not who is risky. Strong due diligence means combining official checks with investigative research, monitoring, and context.

Adding pre-sanction screening makes compliance proactive instead of reactive — lowering exposure, protecting reputation, and keeping organizations a step ahead of sudden regulatory shifts.

Why evidence is the strongest asset to tackle business risk related to illicit flows

Tue, 16 Sep 2025 11:11:25 GMT

Illicit flows are not confined to shadowy corners of the global economy. They move through financial systems, supply chains, and markets every day , often hidden in plain sight. These flows — whether of money, minerals, labor, or weapons — undermine governance, and create serious risks for companies.

Illicit flows thrive where evidence is weak. Without reliable, verifiable data, decisions on suppliers, partners, and deals carry hidden exposures that can translate into compliance failures, reputational damage, or financial loss.

What are illicit flows?

Illicit flows take many forms:

Financial flows such as tax evasion, hidden ownership structures, and money laundering.
Commodity flows such as conflict minerals, illicit timber, or counterfeit goods entering legitimate markets.
Human flows such as forced labor or trafficking in supply chains.
Arms flows such as weapons diverted into the hands of non-state groups, fueling instability.

While these flows may look different, they share a common feature: they exploit gaps in oversight and evidence.

Where transparency and verification are absent, illicit practices blend into legitimate activity.

The evidence gap

Illicit flows persist not only because bad actors are creative, but also because evidence systems are weak in many jurisdictions. In practice, this means:

Poor record-keeping: transactions, ownership structures, or supply-chain documentation that are incomplete, inconsistent, or deliberately obscured.
Fragmented oversight: regulators, ministries, or compliance teams holding information in silos that is never connected.
Inconsistent reporting: obligations may exist on paper — for example, to track commodities or beneficial ownership — but reporting is irregular or unverifiable.
Opacity by design: shell companies, offshore structures, or informal trade networks that exist precisely to avoid scrutiny.

When evidence is missing or unreliable, illicit activity blends into legitimate business flows. Companies cannot see the red flags, even when they are present.

A striking illustration comes from research into armed conflict in West Africa. For years, policymakers assumed illicit weapons entered mainly through cross-border smuggling. Only once systematic data was collected did the real pattern emerge: most weapons were being diverted internally from state stockpiles.

The same logic applies across business sectors. If mineral consignments are not tracked with credible chain-of-custody evidence, illicitly mined or conflict-tainted material enters global supply chains. If beneficial ownership registries are incomplete or unreliable, companies can be unknowingly exposed to sanctioned actors. If suppliers only provide partial documentation, forced labor or corruption risks can be hidden.

Why businesses should care

For companies, illicit flows are not an abstract problem. They directly affect operations, markets, and long-term growth. The risks typically manifest in three ways:

Regulatory exposure : Companies may inadvertently breach sanctions, anti-money laundering rules, or trade restrictions.
Operational disruption : Supply chains can be broken when illicit practices are exposed, forcing abrupt changes in sourcing or partnerships.
Reputational harm : Being linked to corruption, trafficking, or conflict undermines trust among customers, investors, and regulators.

The financial and reputational costs of reacting after problems surface are almost always higher than the cost of investing in strong evidence systems upfront.

Building resilience through evidence

The way to counter these risks is not only through stricter enforcement or more regulation. The first line of defense is evidence .

Structured, verifiable, and comprehensive data through collecting and validating information give companies the visibility they need to act with confidence. They make it possible to:

Map exposure across supply chains, partners, and markets
Stress-test potential deals and partnerships against hidden risks
Provide assurance to regulators, investors, and customers that due diligence is robust

Evidencity equips companies to see through opacity. We provide unique data that is verifiable, actionable, and comprehensive — covering financial structures, supply chains, illicit networks and partner risks. By strengthening access and visibility, we help companies reduce their exposure to illicit flows and make decisions that support sustainable growth.

How transnational crime & a military junta built a cyber-fraud engine in Myanmar

Tue, 09 Sep 2025 16:50:50 GMT

Since Myanmar’s 2021 coup, the Thai–Myanmar frontier has morphed into one of the world’s densest clusters of industrial-scale cyber-fraud “compounds.”

Run largely by Chinese-linked transnational syndicates and shielded by junta-aligned militias, these sites have doubled in number since the coup and now hold tens of thousands of trafficked workers.

Myanmar, formerly known as Burma, has been ruled on and off by the military for most of its modern history.

In February 2021, the armed forces, known as the Tatmadaw, staged a coup against the elected civilian government led by Aung San Suu Kyi and her National League for Democracy, annulling the results of the 2020 election. The generals installed the State Administration Council (SAC) under Senior General Min Aung Hlaing, returning the country to outright military rule. Isolated internationally and under Western sanctions, the junta has struggled to fund itself.

To sustain its war effort, it relies heavily on allied militias that raise their own money through illicit economies. These include narcotics, illegal logging and jade trade, and, increasingly, the cyber-fraud compounds that line the Thai–Myanmar border.

The growth of these “scam cities” is therefore part of the survival strategy of a dictatorship fighting to retain power.

The criminal architecture

The operational core of these scam compounds consists of transnational crime groups, often Chinese-run, that migrated from casino hubs such as Cambodia’s Sihanoukville and repurposed half-built resort or casino projects into cyber-fraud factories inside Myanmar.

Flagship hubs include Shwe Kokko (Yatai New City), KK Park, Taichang Park, and the Dongmei zone along the Moei/Thaungyin River opposite Thailand’s Tak Province.

The compounds function as employer-captive call centres : coerced workers cultivate trust online in long-con “pig-butchering” schemes, push fake investment and crypto plays, and launder proceeds through underground banking and exchanges. When under pressure, operators “sell” workers between compounds or extort families for ransoms.

Open-source phone-location analysis in 2024–25 reveals repeated device movements across KK Park, Dongmei, and Yatai, as well as frequent appearances in Naypyidaw, suggesting coordination and/or protection at senior levels.

The militia shield

The State Administration Council (SAC) is continuously facing territorial losses, sanctions, and shrinking revenues.

Rather than dismantle scam hubs, it relies on proxy militias that both fight its wars and self-fund via the compounds. Analysts characterise the scam economy as an existential prop for the regime’s war footing.

The Karen Border Guard Force (KBGF), led by Colonel Saw Chit Thu, controls much of the Shwe Kokko/Myawaddy corridor, leasing land, providing security, and selling power and internet to compounds.

Other Karen factions, including the DKBA, have profited or provided protection in parts of the corridor; anti-junta Karen forces (KNU/KNLA) have, by contrast, attacked or dismantled hubs where they gain control.

Traces of money and movement reinforce this arrangement: multiple devices circulate among compounds and into government sites, pointing to profit-sharing and coordination between militia-run hubs and state structures.

Shwe Kokko operates as a militia–syndicate joint venture. The BGF/KNA holds equity via Chit Linn Myaing and has overseen a sprawling build-out since 2017, now retaining core command and finance functions for multiple scam crews.

KK Park, Taichang and Dongmei have expanded rapidly since the coup, adding docks and informal crossings to Thailand. After Thailand cut grid links, compounds smuggled satellite internet (notably Starlink kits) and diesel to stay online.

Together, these enclaves function as self-contained towns for crime, with dormitories, clinics, warehouses, VIP housing, and staged luxury backdrops used to deceive victims on video calls.

Human trafficking on an industrial scale

Recruiters lure targets with job ads and agents. Chinese speakers and, increasingly, English speakers from East Africa have been the primary targets.

Many travel to Thailand only to have their passports seized and be ferried across the Moei River into Myanmar compounds. Once inside, they are forced into cybercrime under threat of electrocution, beatings, starvation, and sexual violence.

The UN has warned that hundreds of thousands have been trafficked into forced criminality across South-East Asia, with Myanmar a principal hub and a six-figure captive workforce.

Reporting in 2025 documents a surge of Kenyan, Ugandan and Ethiopian victims , reflecting syndicates’ pivot to English-language labour to target Westerners.

Rescues are complicated by weak consular presence and slow repatriation processes, which prolongs captivity and heightens the leverage of ransom schemes.

The global response

Sanctions and designations have accelerated since 2023. The United States, the United Kingdom and the European Union have targeted Saw Chit Thu, KNA/BGF entities and associated firms.

Furthermore, in 2025, the U.S. sanctioned a tranche of Shwe Kokko- and Cambodia-linked entities, citing double-digit billions in losses and mass trafficking. These measures raise costs and stigma, but key beneficiaries often sit beyond easy legal reach inside Myanmar.

On the border, Thailand has cut power and internet feeds, seized satellite kits, and—often at China’s urging—coordinated repatriations numbering in the thousands.

The compounds adapt with generators, satellite links and deeper relocation inside Myanmar’s interior. Persistence remains high because the model is modular, mobile and militia-protected; labour is replenished from new regions; financial rails include OTC crypto and informal banking; and the junta’s survival incentives are misaligned with eradication.

Mapping the hidden economy

To translate this picture into practical insights and identify risks through data, it is necessary to carry out:

Local (Myanmar/Thai) source monitoring to verify sites, capture geo-tagged photos, note militia presence, and log river-dock movements.
Link sites to militias and syndicate fronts via corporate records, beneficial owners, director/alias pivots, phone/domain clusters through network and ownership mapping.

Trace cross-border movements, supply lines, diversion paths, and recruitment routes, overlaid on logistics corridors to pinpoint choke points and trigger early warnings.

Myanmar’s scam compounds are not just isolated criminal enclaves—they show how a military dictatorship under siege sustains itself through alliances with transnational crime.

The result is a system that traffics tens of thousands of people, defrauds victims worldwide, and pours illicit revenues back into the hands of militias and generals.

For companies and policymakers, the global reach of these scams—costing billions annually and exploiting supply chains, payment systems, and technology platforms—means the risks are not confined to Myanmar’s borders but pose compliance, security, and reputational challenges everywhere.

Africa’s Gas and LNG: a Mozambique case study

Tue, 02 Sep 2025 15:08:31 GMT

Europe’s gas portfolios have been rewired since 2022. The International Energy Agency expects Europe’s LNG imports to hit a record in 2025 as pipeline flows from Russia keep shrinking, cementing LNG’s role in diversification strategies for the rest of the decade.

Within this context, Africa appears as a valuable partner. Algeria is the continent’s largest natural-gas producer based on 2024 output, while Nigeria holds the biggest proven reserves. At the same time, Egypt, Senegal, Mauritania and Mozambique add flexible seaborne volumes that can swing between Atlantic and Asian basins.

Europe isn’t just talking about LNG. It is building capacity to receive more of it. New floating storage and regasification units (FSRUs) have been added since 2022, including Germany’s rapid build-out and Greece’s Alexandroupolis terminal, which began commercial operations on October 1, 2024.

Buyers are locking in multi-year LNG supply contracts with non-Russian sellers. A notable example is QatarEnergy’s long-term deals to supply Germany , which are structured to deliver cargoes directly into German terminals. The IEA also expects Europe’s LNG imports to be near record highs in 2025 , underscoring the shift toward seaborne gas.

Policy is tilting procurement away from Russian gas and toward traceable, lower-emissions supply . The EU’s Methane Regulation (2024/1787) imposes new monitoring/reporting duties (including on imports), and the EU’s 14th sanctions package bans trans-shipment of Russian LNG via EU ports — both measures that nudge buyers to source from the U.S., Qatar, and Africa. There’s also an EU draft move to require proof of gas origin to enforce a phase-out of Russian supply.

This demand signal is exactly why African LNG projects continue to attract finance and offtake despite ESG headwinds and schedule drift. In the northwest, Senegal and Mauritania’s Greater Tortue Ahmeyim is now loading cargoes, adding a new Atlantic Basin source that can swing between European and Asian buyers. Nigeria is reinforcing its anchor role with the NLNG Train-7 expansion moving toward start-up this decade, underpinned by fresh long-term gas supply agreements to keep the liquefaction complex fed. Meanwhile, Algeria continues to pair pipeline deliveries to Europe with steady LNG exports, and Angola has redirected a larger share of spot cargoes to Europe since 2022. Even pre-FID projects, such as Tanzania’s onshore LNG with Shell/Equinor/Exxon, remain live because late-decade demand still justifies keeping options open.

Nevertheless, the harder question for diversification is whether volumes keep flowing when local realities intrude—when security wobbles, when procurement meets politics, when enforcement is uneven.

In this context, Mozambique is a useful case to examine. The same basin that lifts LNG offshore faces onshore conditions—insurgency risks, illicit networks, governance frictions—that can reshape schedules. Our team took a deep dive into the country and its risks.

Mozambique: a budding LNG hub

Mozambique is already exporting LNG offshore. Eni’s Coral Sul FLNG has loaded cargoes since November 2022 under a 20-year offtake with BP, and marked its 100th shipment in April 2025. Sitting offshore, it has been less exposed to onshore disruption while delivering destination-flexible cargoes into Europe and Asia.

Onshore, the picture is more conditional. TotalEnergies’ Area 1 (Mozambique LNG) secured a USD 14.9 billion debt package in 2020, but went into force majeure after the March 2021 attack on Palma. In March 2025, the U.S. Export-Import Bank re-approved close to USD 5 billion of support, a step towards the remobilisation the operator has targeted for 2025, with first LNG now expected closer to the end of the decade. In parallel, the UK is reviewing its exposure via UKEF and has commissioned human-rights due diligence, signalling lender sensitivity to conduct on the ground.

ExxonMobil’s Area 4 onshore project (Rovuma LNG) returned to front-end engineering and design in late 2024, positioning the partners for a final investment decision once security and financing conditions are acceptable.
Meanwhile, the government has approved Eni’s second offshore unit, Coral Norte FLNG, for a late-decade start-up.

Taken together, these steps indicate continued operator engagement, with a phased approach that leans on offshore capacity and advances onshore only as security, financing and ESG conditions allow.

The risks that move the needle for onshore

Security remains the gating item for onshore. The March 2021 assault on Palma by Islamic State-aligned militants triggered the force majeure. Since then, Rwandan and regional deployments have improved conditions but have not eliminated incidents.

UN OCHA’s July–August 2025 updates still characterise Cabo Delgado as highly volatile , and ACLED’s Cabo Ligado notes insurgent activity periodically reaching as far as villages south of Afungi. This is why operators tie restart cadence to verifiable security indicators.

Furthermore, Mozambique faces structural illicit economy challenges. UNODC and EU drug-market assessments document the “southern route” for Afghan heroin —and increasingly methamphetamine—across the western Indian Ocean, with dhow and container flows touching Mozambican shores before moving south.

Those same corridors, logistics firms, and facilitators can intersect with project procurement if counterparties are not mapped beyond the first tier, creating concrete anti-money-laundering, procurement-capture, and reputational risks for operators and lenders.

Governance and integrity risks also remain current. The U.S. “hidden-debt” (or “tuna bonds”) case — roughly US$2 billion in 2013–2014 loans to EMATUM, ProIndicus and MAM from Credit Suisse and VTB, secretly backed by state guarantees that bypassed parliament and the IMF, triggering a donor freeze, currency collapse and default when exposed — ended with a 2025 U.S. prison sentence for former finance minister Manuel Chang over bribes tied to those guarantees.

That history is why lenders now insist on tighter controls around any sovereign undertakings and project-adjacent public spending. In parallel, export-credit agencies are stress-testing human-rights safeguards at Afungi; the UK has commissioned an external review, and TotalEnergies has asked Mozambican authorities to investigate allegations concerning 2021 conduct by state forces.

Finally, labor and modern-slavery risks are non-zero. The U.S. State Department’s 2024 Trafficking in Persons Report places Mozambique at Tier 2 —“making significant efforts” but not yet meeting minimum standards—underscoring the need for active worker-welfare controls in recruitment, resettlement, and on-site services.

Who is exposed and why

Operators and EPC consortia carry exposure through their vendor universes and security setups. On Area 1, the onshore EPC is the CCS joint venture (Saipem–McDermott–Chiyoda) . Risk propagates through civil works, haulage, camp services and labour brokers, where a single weak counterparty can transmit sanctions, AML or human-rights issues up the chain.

Since 2024, TotalEnergies has used unarmed guarding from Isco Segurança — a Mozambique–Rwanda JV reported to have political connections — which is precisely why beneficial-ownership and political-exposure checks cannot stop at incorporation papers.

Financiers face covenant and reputational risk as ESG conditions tighten; EXIM’s 2025 re-approval contrasts with UKEF’s ongoing review, illustrating divergent appetites even within the same banked structure.

Offtakers and traders remain exposed to disruption if security incidents cascade into repeated force-majeure events and scheduling slippage.

Islamic State Mozambique remains the proximate security actor, sustaining asymmetric attacks across several districts and occasionally probing south of Afungi.

Elements within state security forces can also become risk actors if screening, training and command accountability are weak, generating human-rights exposure that can flow back to operators and lenders.

Along the coast and transport corridors, trafficking syndicates and their facilitators maintain illicit cash and commodity routes. When intermediaries or “local content” partners sit inside those networks, they create AML and procurement-capture risk for projects.

None of this is invisible: these actors can be observed and mitigated through data, ownership and relationship mapping, payment tracing, and movement/route insights from on-the-ground sources.

Businesses need to know who they’re dealing with, how those actors connect, and what has changed on the ground before they contract, hire or move. Evidencity provides the supply-chain mapping and relationship data to make those checks quick, easily accessible, and actionable.

Brazil’s tantalum test: Viable alternative or risky bet?

Tue, 26 Aug 2025 11:41:14 GMT

Brazil is increasingly touted as a cornerstone of the global critical minerals trade. Long known for iron ore and niobium, the country is now seeking to expand its role in supplying the minerals that power the energy transition and high-tech industries, attracting international interest.

Lithium, rare earths, and graphite dominate headlines. However, tantalum, a strategic metal used in electronics, aerospace alloys, and medical devices, may be another under-examined opportunity for Brazil.

Tantalum’s global supply is notoriously fraught. Roughly 41% originates in the Democratic Republic of the Congo (DRC), where artisanal mining is linked to forced and child labour, armed groups, and opaque trading practices, as confirmed by Evidencity's Project Tantalus. Smuggling across borders to “wash” Congolese ore as Rwandan exports is a common practice. All this with heavy Chinese involvement in the mid-stream part of the supply chain.

In this context, Western policymakers and manufacturers are eyeing Brazil as an alternative source: a country with industrial mining, a renewable-heavy power grid, and democratic legitimacy.

Brazil’s tantalum industry

Brazil consistently ranks among the world’s top tantalum producers, typically third after the DRC and Rwanda (USGS, 2023). Most of its tantalum is mined as a by-product of other operations. In addition, two companies anchor the country’s midstream capacity: AMG Brasil and Mineração Taboca .

At its Mibra mine, AMG produces lithium and tantalum concentrates. In 2023, AMG signed a long-term supply agreement w ith Germany’s Taniobis GmbH to expand tantalum output from 320,000 to 380,000 pounds per year, supported by nearly 100 million Brazilian real in new investment. AMG has also secured a Responsible Minerals Initiative certification, positioning its tantalum as conflict-free.

On the other hand, operating the Pitinga mine in Amazonas, Taboca produces tin, niobium, and tantalum, with refining facilities in São Paulo. In late 2024, Peru’s Minsur sold Taboca to China’s state-owned CNMC for about USD 340 million. Pitinga is among the largest global sources of tantalum-bearing columbite, making the acquisition geopolitically significant.

This dual role — ore production and midstream refining — gives Brazil a rare position. For buyers under pressure to diversify supply chains, that is a strategic advantage.

Lula’s strategic minerals doctrine

The current administration of Luiz Inácio Lula da Silva has elevated critical minerals to the level of sovereignty.

“We won’t allow what happened in the last century — exporting ore and buying back expensive products. We want the value to be added here in Brazil,” Lula said in 2025, framing minerals policy as a matter of independence.

He highlighted that 70% of Brazil’s territory remains unmapped and announced the establishment of a special commission to survey the nation’s subsoil under state control.

Policy has followed rhetoric. In 2024, Congress introduced Bill 2780/2024, establishing a National Policy for Critical and Strategic Minerals (PNMCE). The proposal includes tax breaks, credit lines, and a high-level committee to coordinate strategy (Agência Câmara, 2024). The National Mining Agency (ANM) also established a division for critical minerals, committing to streamline licensing while enhancing oversight.

Brazil has done this before: niobium is a case in point. Through Companhia Brasileira de Metalurgia e Mineração (CBMM), Brazil controls approximately 97% of the global supply, leveraging production partnerships and long-term contracts to enhance its market position.

Tantalum may not replicate niobium’s dominance, but the precedent shows that Brazil can capture downstream value when strategy and execution align.

The credibility test

Opportunities aside, Brazil’s tantalum supply chain faces scrutiny. Illegal mining and laundering — long associated with gold — are now surfacing across the critical minerals sphere.

In November 2023, police in Amapá intercepted two tonnes of tantalite ore hidden in a pickup truck, sourced from an unlicensed Amazon mine. Among those arrested was a Chinese national linked to a mineral trading company in Macapá. Authorities described the case as “the tip of the iceberg” of a larger smuggling scheme.

In Roraima, Federal Police in 2023 launched Operation Forja de Hefesto , exposing how cassiterite (tin ore) illegally extracted from Yanomami Indigenous Territory — often occurring alongside columbite-tantalite — was purchased by one of the world’s largest tin smelters. Over just five months, more than 166 million Brazilian real worth of ore was laundered into formal supply chains, mixed with licensed production, and exported as “clean” metal sold to electronics multinationals (Metrópoles, 2023). The buyer affected was said to be White Solder Metalurgia e Mineração.

Even official statistics raise red flags. In 2022, Rondônia reported 1,416 tonnes of columbite-tantalite with a declared value of only 41,000 Brazilian real, while Amazonas logged 7,446 tonnes for 84,000 Brazilian real.

Moreover, Evidencity's findings through Project Tantalus suggest that, although Brazilian smelters claim 100% local tantalum sourcing, the possibility that conflict-tainted tantalum reaches their facilities through the complex material movements occurring in most global supply chains remains high, as indicated by import and export data.

Geopolitical stakes

For the U.S. and EU, Brazil is an appealing candidate for “friend-shoring.” Its democratic institutions, renewable energy grid, and midstream facilities contrast with China’s dominance and the DRC’s governance vacuum. Brazil has already been courted in Minerals Security Partnership discussions.

At the same time, China remains deeply embedded. The CNMC takeover of Taboca underlines Beijing’s enduring leverage in Brazilian mining. Brasília’s strategy is to pursue a multi-vector approach — engaging East and West alike, but insisting on value addition at home, with recent developments regarding the imposition of tariffs further complicating matters.

Handled well, Brazil's position can lead to a rare “swing supplier” role for critical minerals, with influence across both blocs.

Brazil has the geology, industrial base, and policy momentum to play a much larger role in the critical minerals trade. For tantalum in particular, it offers what buyers crave.

But credibility will remain the hinge. To seize the opportunity, Brazil must strengthen traceability, close enforcement gaps, and ensure its “conflict-free” brand can withstand scrutiny.

If it succeeds, Brazil could move from a marginal tantalum player to a cornerstone of diversified, responsible supply chains. If not, its minerals risk being seen as just another label in a system still haunted by conflict and opacity.

How Russian companies circumvent sanctions through Turkey and the UAE

Tue, 19 Aug 2025 21:18:04 GMT

Russia remains under heavy sanctions from the U.S., EU, and other allies because of its invasion of Ukraine. These measures aim to cut Moscow off from the advanced technology and equipment it needs to sustain its defense and industrial base. Yet Russian companies continue to source critical goods by moving them through third countries.

Turkey and the United Arab Emirates (UAE) are two of the most important business hubs that enable Russian companies to circumvent international sanctions.

In Turkey, one such example is Enütek Makina, a company based in Istanbul. Enütek was founded by former French partners of the Russian defense supplier Promtech. When Promtech lost direct access to European products due to sanctions, Enütek became its new supply channel. In 2023, Enütek sent more than seven million euros’ worth of goods to Russia. These included semiconductors, heat-resistant sensors, connectors, and precision measuring instruments — all items that Promtech needed for aerospace and defense projects. Although Enütek officially lists office machinery as its business, its primary role has been to maintain Promtech's connection to global suppliers.

Other Turkish firms have also been implicated. Azint Elektronik was sanctioned by the United States for supplying integrated circuits to Russia. Smart Techno Group was sanctioned for shipping tantalum capacitors, a small but vital component for military-grade electronics. In 2024, several other Turkish firms — including Belluga Trading, ETASIS, IDA Elevator, and LSS Global — were added to sanctions lists. These companies were accused of supplying machine tools, heavy industrial hardware, and logistics services to Russia. Many of these firms were only recently established, underlining how quickly new intermediaries can be set up to meet Russian demand.

In the UAE, similar patterns have been observed. Flavic, a company based in Dubai, was sanctioned for importing and exporting aviation equipment to Russia, including spare parts for planes. Another company, Polarstar, acted as a logistics partner for Russia’s S7 Airlines, moving goods between Russia and the Emirates. Earlier examples include Aeromotus LLC and Hulm Al Sahra LLC, both of which were sanctioned for sending drones, semiconductors, and optical equipment to Russia. Dubai’s free trade zones, with limited transparency on ownership and re-exports, have made it easier for such firms to operate.

The result of these practices is a steady flow of restricted goods into Russia through front companies.

Not a marginal issue

UAE exports of electronic components to Russia grew more than sevenfold in 2022, reaching almost USD 283 million . Exports of microchips alone rose from USD 1.6 million in 2021 to USD 24.3 million in 2022.

Turkey has seen similar increases. In the first nine months of 2023, Turkish exports of dual-use goods to Russia reached USD 158 million , three times higher than the same period a year earlier. These figures highlight that the parallel supply channels are significant in size and critical for Russia’s military and industrial needs.

Because of this reality, both Turkey and the UAE have come under growing pressure from the United States and Europe.

In early 2023, Turkey blocked the transit of some EU-origin goods to Russia and required that importers clear them through Turkish customs before re-export, making it more expensive and less straightforward to move restricted goods. By late 2023, Turkish exports of dual-use items to Russia had fallen to their lowest levels since the invasion.

The UAE has also made adjustments. In March 2023, the Emirati authorities revoked the license of Russia’s MTS Bank, just weeks after it was sanctioned by the U.S. and UK.

Banks in Dubai and Abu Dhabi have since tightened their compliance checks, with Russian companies reporting frozen accounts, delays, and extra scrutiny on transfers. The UAE has also promised to limit re-exports of certain dual-use goods and has introduced stricter due diligence requirements for banks and companies operating in free zones.

What does it mean for business?

For international businesses, the persistence of these networks presents serious risks.

Legal risks are high: firms that are found to have indirectly supplied Russia with restricted goods may face fines, loss of export licenses, or even prosecution.

Financial risks include blocked payments, frozen transfers, or the loss of access to international banking channels . Reputational risks are significant: companies can suffer lasting damage if their products are discovered in Russian military systems. Operational risks also emerge when shipments are seized or delayed by authorities suspicious of diversion.

There is also the risk of secondary sanctions. Western governments are increasingly willing to sanction companies in third countries if they are seen as frustrating the intent of existing measures. Several Turkish and Emirati firms have already been added to the U.S. and EU blacklists for this reason.

Because sanction evasion relies on complex supply chains and hidden ownership, a detailed approach is essential for businesses that want to foresee reputational and legal risk before it's too late.

Mapping of supply chains and product movements can reveal sudden spikes in exports to Turkey or the UAE in product categories previously sold directly to Russia. It can also uncover newly registered firms with opaque ownership structures or unusual trade patterns.

Pre-sanctions monitoring can also be used to predict potential problematic connections in one's network and act swiftly to remove them.

By applying these tools, businesses can identify risks before entering into contracts or shipping goods. As enforcement grows stricter and secondary sanctions expand, companies must strengthen their compliance systems and take a proactive approach to identifying and closing off these risks.

OFAC sanctions hit key players in the tantalum trade

Thu, 14 Aug 2025 13:51:21 GMT

In April 2025, Evidencity's Project Tantalus identified East Rise Corporation, a Hong Kong–registered trader, within a global tantalum supply chain that connected a major Kazakh refiner to questionable mining and trading operations in the Democratic Republic of the Congo (DRC) and Rwanda.

In August 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned East Rise , along with several other actors, confirming our team's findings.

At the time of Evidencity's research, East Rise was not subject to any enforcement action, but the network it occupied featured companies and individuals long associated with high-risk mineral sourcing.

Corporate records tied East Rise’s management to John Crawley , a UK-born mining executive whose ventures have repeatedly intersected with tantalum supply chains in conflict-affected areas. These ventures include Niotan Inc. (later known as Kemet Blue Powder and acquired by Kemet Corporation), Noventa Ltd., Premier African Minerals Ltd., Mineral Resources International, Metal Processing Congo SPRL, and Congo Fair Mining. Crawley’s network has also overlapped with that of Christopher Huber and Simeon Briskin, both of whom have been involved in mineral washing through Rwanda. Importantly, Huber was being investigated for war pillaging by the Swiss authorities.

Within this network sat the Cooperative des Artisanaux Miniers du Congo (CDMC), the largest mining cooperative operating in Rubaya, North Kivu — one of the richest tantalum deposits in the world. Part of Rubaya’s concessions were recently operated under Congo Fair Mining (CFM SA) , a joint venture formed in 2020 between state-owned company SAKIMA and CDMC. The cooperative was previously chaired by Mr. Crawley. Through this structure, Crawley had a direct link to the JV’s operations, although in recent years, he appeared to be linked mainly to East Rise Corporation.

Rubaya has been notoriously under the influence of armed groups, including PARECO-FF (Patriotes Résistants Congolais – Front du Peuple), a splinter of the broader PARECO coalition active since the mid-2000s. Comprised largely of Hutu, Hunde, and Nande militia groups, PARECO-FF has been implicated in illegal taxation, forced labour, and child labour. Minerals from these sites are often moved through Rwanda before entering international markets.

CDMC’s reach meant that minerals from these concessions — despite being sourced in areas under armed group influence — could enter the international market through legitimate-looking export channels. From there, shipments could move to traders such as East Rise Corporation , which in turn supplied smelters, including Ulba Metallurgical Plant JSC in Kazakhstan, which is a major midstream company in the global tantalum supply chain and is ultimately owned by the Kazakh state.

Risks confirmed

On 12 August 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned East Rise, CDMC, and another Hong Kong trader, Star Dragon Corporation, which is also affiliated with Chris Huber and John Crawley. OFAC confirmed that East Rise and Star Dragon purchased minerals from CDMC, whose sourcing from PARECO-FF–controlled areas provided financial benefit to armed actors and contributed to regional instability.

These sanctions are not an isolated compliance action. They fit into a long-standing pattern of activity by a recurring set of actors and companies operating in high-risk tantalum supply chains — a pattern already mapped by Evidencity.

The designation of East Rise confirms that the risk and pre-sanction indicators identified in the research were both accurate and material , underscoring the persistence of networks that enable conflict minerals to reach global markets despite due diligence frameworks and industry audits.

Tantalum is critical for electronics, aerospace, and medical devices, valued for its durability, conductivity, and corrosion resistance. But as both the sanctions and earlier research highlight, when its sourcing runs through conflict-affected regions, this essential material becomes part of the financial lifeline sustaining armed groups and exploitation far from the end market.

For companies relying on tantalum, these links present not only compliance challenges but also serious reputational risks . Even indirect connections to sanctioned entities or conflict-affected supply chains can damage brand trust, invite shareholder scrutiny, and disrupt customer relationships.

Indonesia’s gold mining mafia

Tue, 12 Aug 2025 13:55:12 GMT

In West Lombok’s Sekotong district and West Kalimantan’s Ketapang regency, recent investigations have exposed an industrial-scale, foreign-backed model of illegal gold mining that is infiltrating legitimate markets, exploiting local communities, and undermining governance.

These operations are driven by well-financed transnational syndicates, drawing in political actors, corrupting enforcement, and creating serious risks for companies committed to responsible sourcing.

Sekotong: From “people’s mining” to foreign-controlled enterprise

Sekotong was once known for tambang rakyat—small-scale community mining tolerated by the state. Artisanal miners like Sabuddin sold modest yields to local traders, such as Heru Hairuddin, using basic tools and mercury-based processing methods. That changed in 2022 with the arrival of Chinese investors, including “Mr. Xi,” who struck land deals that locals allege were never fully paid.

The newcomers introduced excavators, bulldozers, and cyanide-leaching tanks—technology far beyond the means of local miners—transforming the hillsides into a sprawling 184 football-field operation.

The site, run by three companies (two Chinese-led, one Indonesian), held no valid permits yet generated an estimated USD 5.5 million worth of gold per month.

Locals accused the operators of displacing artisanal miners, contaminating water, killing crops and livestock, and seizing the richest deposits.

Frustration escalated into direct action in August 2024, when villagers torched the syndicate’s camp, forcing Chinese workers to flee. The site had operated openly for years, with heavy machinery and foreign crews visible, yet authorities intervened only after the unrest.

Ketapang: A USD 67 million theft and judicial misconduct

In West Kalimantan’s Ketapang regency, Chinese national Yu Hao exploited dormant mine licences from PT. BRT and PT. SPM to conceal an unauthorised underground operation. Using over 1.6 km of old tunnels, Yu Hao’s crew—over 80 Chinese nationals plus local labourers—installed crushers, smelting furnaces, and mercury-based processing to extract 774 kg of gold and 938 kg of silver valued at around USD 67 million.

A 2024 joint task force caught Yu Hao in the act, leading to a 3.5-year prison sentence and a Rp 30 billion fine. But in January 2025, the Pontianak High Court acquitted him —a decision so suspicious that the Judicial Commission launched an ethics review. The acquittal allowed most co-defendants to flee abroad.

The Supreme Court later reinstated Yu Hao’s conviction, ordering him to serve three years and pay the fine. However, environmental groups and mining officials called the sentence too lenient given the scale of theft and mercury pollution.

The case revealed systemic weaknesses: regulatory blind spots allowed foreign crews to operate in remote tunnels without scrutiny, while judicial corruption nearly nullified one of Indonesia’s largest illegal mining prosecutions.

The network behind the mines

Indonesian investigators and foreign observers describe these operations as part of a “mining mafia”—Chinese-led syndicates that invest capital, bring technical expertise, and secure corrupt protection to access resource-rich areas.

The UNODC warns that such networks often overlap with other organised crime, money laundering, smuggling, and even links to armed groups. Gold extracted in Indonesia is often funnelled abroad through opaque supply chains, with China a major end market. Indonesian authorities have confirmed similar foreign-backed illegal mining operations in at least four provinces.

These thrive on systemic corruption, from fraudulent visa issuance to illicit fuel supplies, and on the absence of international enforcement cooperation.

Requests to Chinese authorities for extradition or investigative assistance have largely gone unanswered.

Labor exploitation and community impact

Both cases reveal patterns of labour exploitation. In Sekotong, small-scale miners lost access to resource-rich land and were left scavenging low-grade ore from abandoned pits. In Ketapang, Indonesian and foreign workers laboured in mercury-laced, unventilated tunnels without contracts, insurance, or safety equipment. Cyanide and mercury use poisoned waterways, killed livestock, and endangered communities’ food sources. Local miners have since adopted more dangerous methods introduced by foreign operators, worsening health risks.

These impacts erode livelihoods, fracture social cohesion, and leave locals bearing the environmental and health costs while illicit profits flow overseas.

Why this matters for responsible supply chains

These cases illustrate how illicit gold infiltrates legitimate global markets. Once refined, gold from Sekotong or Ketapang is chemically indistinguishable from legally mined material, allowing criminally tainted product to pass through reputable refineries and into jewellery, electronics, and investment bullion.

The risks for businesses are substantial. Compliance breaches under anti-money laundering, anti-bribery, and responsible sourcing laws can result in costly legal exposure. Reputational damage from links to corruption, environmental destruction, or labour abuse can erode consumer trust.

Operational disruptions may occur if contaminated supply chains trigger seizures, audits, or litigation. Downstream buyers—from banks to luxury brands—could be indirectly financing organised crime or environmental crimes if they fail to vet suppliers.

Effective ESG and compliance performance demands deep supply chain intelligence. Mapping individuals, entities, and political connections helps identify overlap between criminal actors and legitimate traders.

Tracking beneficial ownership of suppliers and intermediaries, cross-referencing local-language reporting with customs and corporate records, and scrutinising anomalies in trade flows can reveal illicit activity before it enters legitimate channels.

Monitoring high-risk jurisdictions, such as the Philippines, Myanmar, Cambodia, and Laos, where governance gaps invite illegal mining, can prevent these networks from exploiting new frontiers.

Migrant workers & debt bondage in Malaysia’s EV battery supply chain

Tue, 05 Aug 2025 14:35:15 GMT

Malaysia has emerged as a hub for manufacturing key components of electric vehicle (EV) batteries – such as copper foils, battery separators, and other cell parts – serving major global battery makers.

Yet, a significant share of the workforce in Malaysia’s electronics and battery component factories are migrant workers from countries like Nepal, Bangladesh, Indonesia, and Myanmar.

Industry leaders from South Korea, Japan, and China have set up facilities in Malaysia to produce battery materials.

For example, Lotte Energy Materials (formerly Iljin Materials) operates a large plant in Sarawak producing ultra-thin copper elecfoil for lithium-ion batteries, with Malaysia now accounting for 75% of its foil output .

Likewise, South Korea’s SK Nexilis launched a massive copper foil factory in Sabah in 2023 to supply EV battery manufacturers worldwide .

Chinese company Shenzhen Senior Technology (INV New Material) recently opened Southeast Asia’s first plant for lithium battery separators in Penang .

Migrant labor

Over the past decade, numerous investigations have exposed how these workers often face exploitative recruitment and employment practices . Migrants frequently pay extortionate recruitment fees to labor brokers for the chance to work in Malaysia, leaving them deep in debt before they even start the job.

A landmark study by Verité in 2014 found that, on average, foreign electronics workers paid about 2,985 ringgit ( approximately US D 925) in fees – more than the annual per-capita income in Nepal – usually by taking out loans . Such debts can trap workers in bondage , as they must endure long hours and deductions just to repay what they owe.

Passport confiscation is another common abuse: many migrant workers have their passports withheld by employers or agents (an illegal but widespread practice), rendering them unable to freely leave or change jobs. Some firms even charged workers over USD 1,000 to “borrow” back their passports.

Documented violations

Investigations over the last decade have uncovered serious labor rights violations at Malaysian factories producing components for global electronics and battery supply chains.

A notable early exposé by The Guardian in 2016 revealed that Nepalese migrants making parts for Samsung and Panasonic in Malaysia were deceived, overworked, and trapped by debt.

Workers described paying recruitment fees up to around GBP 1,000 (about 115,000 Nepali rupees) to secure these jobs . Upon arrival, their passports were confiscated, and they were told a hefty fine (three months’ wages) would be imposed if they quit early. In sweatshop-like conditions, these migrants toiled 14-hour shifts on their feet with minimal breaks to earn wages far lower than promised – often just half of what they expected, making it impossible to clear their recruitment debts. Living conditions were equally grim: investigators found overcrowded, moldy dormitories with 14 men packed in one room and inadequate sanitation. This Guardian investigation prompted Samsung and Panasonic to launch probes and acknowledge the need for corrective action.

More recently, a high-profile case in 2024–2025 centered on Kawaguchi Manufacturing Sdn. Bhd. , a factory in Port Klang producing plastic electronic parts for clients including Panasonic, Sony, and Daikin . Over 250 Bangladeshi migrant workers from Kawaguchi came forward alleging forced labor conditions after the factory abruptly shut down .

According to an in-depth Associated Press report, Kawaguchi had withheld wages for up to 8 months , leaving workers penniless and stranded.

Many had paid exorbitant recruitment fees – nearly USD 5,000 each – far above the official rate of approximately USD 650, financing these fees through loans at steep interest . Workers also allege they were forced at times to work 24-hour shifts without breaks or overtime pay , including on public holidays.

Kawaguchi management was said to have confiscated passports , provided filthy, overcrowded housing , and even delayed renewing work visas, exacerbating the migrants’ precarity.

The abuse claims triggered an outcry: Panasonic and Sony cut off orders, and Malaysian authorities opened a probe into “slave labour” allegations at the site .

In the aftermath, Panasonic, Sony, and Daikin jointly agreed to contribute about USD 1.3 million to reimburse the workers’ recruitment fees – an unprecedented step, though it still fell short of covering all the debts and interest accrued .

These labor rights abuses carry significant implications up the EV supply chain . Many of the companies implicated are suppliers to major battery makers or electronics giants that, in turn, serve the world’s top EV brands. For instance, Panasonic – which faced reports of migrant worker exploitation at Malaysian supplier factories, is one of Tesla’s core battery partners . Samsung SDI, another leading EV battery cell producer, likewise had to investigate and address forced labor claims among its Malaysian contractors.

Moreover, the materials produced in Malaysia’s factories (copper foils, separators, etc.) feed directly into batteries assembled by firms like LG Energy Solution, SK On, CATL , and othe rs. SK Nexilis has openly stated its Sabah-made copper foil will be used “exclusively for electric vehicles globally.”

This means any labor violations in Malaysian component plants risk tainting the supply chains of numerous EVs on the market. Advocacy groups warn that the EV battery sector is far from immune to forced labor – one analysis even found that up to 75% of the global lithium-ion battery supply chain may be linked to entities with known human rights abuse allegations.

Hidden links in the global steel supply chain

Tue, 29 Jul 2025 14:32:31 GMT

Steel is the backbone of modern infrastructure, but behind its strength lies a sad truth: the raw materials that feed the global steel industry are often extracted and processed in conditions that exploit the most vulnerable.

From state-imposed forced labor in China’s Xinjiang region to politically connected illegal mining in India and slavery-like conditions in Brazil’s charcoal industry, these abuses are not isolated incidents. They are embedded in supply chains that stretch from remote production sites to some of the world’s largest steel producers.

This investigation examines three recent and documented case studies — in China, India, and Brazil — that show how forced labor persists in the iron ore and steel supply chain, and how opaque commercial relationships allow it to reach global markets.

Case Study 1: China — Xinjiang’s state-organized forced labor

In the Xinjiang Uyghur Autonomous Region, the steel sector has become entwined with the state’s system of forced labor transfers targeting Uyghurs and other Muslim minorities. Xinjiang Bayi Iron & Steel Co., Ltd. was added to the U.S. Uyghur Forced Labor Prevention Act Entity List in October 2024 — the first steelmaker to be sanctioned under the law. U.S. authorities cited credible evidence that Bayi participates in state-run programs relocating Uyghurs to industrial work under coercive conditions.

Bayi operates within a regional network. Xinjiang Jinbao Mining Co., Ltd. , Xinjiang Zijin Zinc Industry Co., Ltd. , and Xinjiang Energy (Group) Real Estate Co., Ltd. have also been tied to labor transfer schemes. Research by the Australian Strategic Policy Institute found that at least 38 companies in Xinjiang’s mining, processing, and manufacturing sectors have engaged in such transfers. Their products move into national and global steel supply chains, often without transparent documentation, making it difficult for downstream buyers to detect their origin.

Case Study 2: India — Illegal iron ore mining and exploitative labor in Bellary

In southern India’s Karnataka state, the Obulapuram Mining Company (OMC) , owned by former minister G. Janardhana Reddy and his brothers, was at the center of a massive illegal iron ore mining scandal. OMC and its affiliates — GJR Holdings , the Associated Mining Company , and others — were found to have encroached on protected land, manipulated mining leases, and exported ore illegally.

The company also promoted Brahmani Industries Limited , a steelmaking venture, and maintained documented business links with JSW Steel , one of India’s largest private producers. While JSW was not accused of labor violations, these connections illustrate how ore from illicit operations can feed into legitimate steelmaking. NGO and labor inspector reports indicate that mining in the region has relied on migrant workers in unsafe, unregulated conditions, with instances of child labor documented in smaller, informal operations.

Case Study 3: Brazil — Charcoal, pig iron, and slavery-like conditions

In northern Brazil, the steel industry’s supply chain often begins in rural charcoal camps. These camps fuel pig iron smelters — pig iron being a crucial intermediate in steelmaking — and have repeatedly been found by labor inspectors to operate under slavery-like conditions. Workers are frequently trapped in debt bondage, forced to live in squalid conditions, and prevented from leaving.

Cosipar (Companhia Siderúrgica do Pará) has been repeatedly named for sourcing charcoal from such camps. Other implicated companies include Viena Siderúrgica , Sidepar , and Usimar . Vale , Brazil’s largest mining company, severed supply relationships with Cosipar and Usimar after these abuses came to light. On the downstream end, Nucor Corporation , the largest steelmaker in the United States, faced shareholder pressure in 2010 over potential exposure to Brazilian forced labor. Nucor subsequently adopted supplier certification measures and began monitoring Brazil’s official “dirty list” of labor violators.

These case studies reveal a pattern: forced labor enters the steel supply chain upstream, in mining and raw material processing, and is then obscured by multiple layers of suppliers and intermediaries. This structure enables global steel markets to consume tainted materials while distancing final producers from direct accountability.

Labor exploitation in EU agriculture: A persistent challenge

Tue, 22 Jul 2025 13:58:26 GMT

In July 2025, a French court in Châlons-en-Champagne delivered a landmark ruling in a case that drew attention far beyond the borders of France. Three employees of a labor-supply firm called Anavim were convicted of human trafficking in connection with the exploitation of dozens of seasonal workers during the 2023 Champagne grape harvest.

The court found that at least 57 mostly undocumented workers —from countries including Mali, Mauritania, Senegal, Ivory Coast, and Ukraine—were housed in deplorable conditions in the village of Aÿ. They slept in overcrowded, dilapidated accommodations with blocked toilets, no running water, and exposed electrical wiring. Some were forced to sleep in vans. They worked up to 13 hours a day with minimal breaks, lacked proper food or hygiene, and were subjected to threats when requesting rest or water.

The convicted included Anavim’s Kyrgyz director, a Georgian national, and a French employee. All received prison sentences—partially suspended—and were ordered to pay €4,000 to each victim , in addition to the dissolution of the company .

One of the wine cooperatives that employed Anavim’s workers was also fined €75,000 for its role in the abuse.

For the first time, the Comité Champagne —the body representing more than 16,000 producers and 370 champagne houses—joined the trial as a civil party, acknowledging the reputational and ethical stakes for the industry.

This case—dubbed the “grape harvest of shame” in French media—is not an isolated incident. It exemplifies systemic problems in the EU’s agricultural labour system, where migrant workers face widespread exploitation , often with little accountability.

Exploitation rooted in structure

Across the EU, agriculture depends heavily on seasonal and migrant workers. Estimates suggest that around 2.4 million migrants are employed in the sector, making up approximately one-quarter of the agricultural labor force. Many of these jobs are informal or precarious, with workers lacking contracts, legal protections, or the ability to change employers.

The ILO estimates that over 60% of EU agricultural workers may be in informal employment. Subcontracting is common, and unscrupulous intermediaries often act with impunity—particularly when employing workers with irregular migration status or limited knowledge of their rights.

Workers may be underpaid, denied proper accommodation, or subjected to threats and coercion. The conditions documented in the Champagne case mirror findings from across Europe: long hours, sub-minimum wages, unsafe housing, withheld identity documents, and isolation.

Repeated patterns across the EU

In Italy , the use of illegal labor intermediaries, known as caporali, remains pervasive despite legal reforms. Trade unions estimate that as many as 420,000 workers —most of them migrants—work in Italian agriculture under exploitative or illegal conditions. In 2024, public outrage followed the death of Satnam Singh , a 31-year-old Indian worker whose arm was severed in a field accident and who was then abandoned by his employer.

Spain has also seen significant exploitation. In 2023 alone, Spanish police dismantled over 100 criminal groups and freed hundreds of workers from abusive farm operations. In Aragón, 43 African migrants were found living in unsanitary conditions, working 10 hours a day without contracts, and receiving as little as €150 per month .

In Portugal , a November 2023 operation freed more than 100 exploited workers and led to the arrest of 28 individuals linked to trafficking and extortion. The victims, from Eastern Europe, South Asia, and Africa, were promised decent jobs but paid between €100 and €250 a month after illegal deductions and were housed in inhumane conditions.

In Greece , the 2013 shooting of Bangladeshi strawberry pickers led to a landmark ruling by the European Court of Human Rights, and while reforms followed, recent cases—including the rescue of Nepali farmworkers in 2024—indicate that such abuse persists.

Even in Northern Europe, such as Sweden and Finland , thousands of seasonal berry pickers from Thailand have reported exploitative recruitment practices, including excessive working hours and debts incurred to secure jobs.

EU policy tools: strong on paper, mixed in practice

At the EU level, several frameworks address labour exploitation. Directive 2011/36/EU requires member states to criminalise trafficking and protect victims. The 2014 Seasonal Workers Directive sets out minimum rights for non-EU seasonal workers.

Most recently, the EU adopted Regulation (EU) 2023/2465 , which will prohibit the sale of products made with forced labour—including goods produced inside the EU. Set to apply in full from December 2027 , the regulation introduces mechanisms for market withdrawal, risk-based investigations, and enforcement by national authorities.

Additionally, the European Labour Authority (ELA) has coordinated cross-border inspections. In a major 2022 operation led by France and involving 16 countries, authorities inspected over 4,000 agricultural sites and identified 874 exploited workers , 353 of whom were likely victims of trafficking.

However, implementation remains inconsistent. Labor inspectorates are often under-resourced, particularly in rural areas. Victims rarely file complaints due to fear of deportation or reprisal. Convictions for trafficking in the agricultural sector remain rare across most member states.

The French case shows that accountability is possible . But in a sector dependent on cheap, flexible labour, systemic change will require consistent enforcement , better migration and labour pathways, and clear responsibility across supply chains. The conditions that led to the “grape harvest of shame” remain present—not only in France, but across the continent.

Tracing the threads: Forced labor in cotton supply chains

Tue, 15 Jul 2025 16:15:23 GMT

Forced labor in the cotton supply chain has emerged as a major compliance and reputational risk for global companies since 2020. Investigations and regulatory actions have exposed serious abuses in cotton cultivation, yarn and textile production, and garment manufacturing. The issue is no longer confined to isolated regions or factories — it is systemic, spanning countries and processes, and has triggered new legal liabilities, customs enforcement, and supplier scrutiny.

High-risk regions

Forced labor risks begin at the very first stage of cotton production. In China’s Xinjiang region, which supplies around 20% of the world’s cotton , evidence shows that Uyghur and other minority citizens have been subjected to coercive state-run labor transfers, including picking cotton and working in ginning and textile facilities.

Entities such as the Xinjiang Production and Construction Corps (XPCC) have been sanctioned by the U.S. for using prison labor in cotton farming and processing.

In India , forced labor risks are most pronounced in the spinning stage. In Tamil Nadu, a 2021 investigation by SOMO and Arisa uncovered that dozens of spinning mills employed young migrant women in coercive conditions, including excessive overtime, wage withholding, and confinement in dormitories.

Brands including Tesco, Next, Gap, IKEA, Carrefour, and Zeeman were linked to these mills. Tesco and Next acknowledged the problem and committed to remediation efforts. Others denied direct sourcing but could not fully rule out indirect connections.

While Uzbekistan has historically been one of the most notorious cases — with hundreds of thousands of citizens forced into annual cotton harvests — systemic forced labor has reportedly ended . Independent monitors confirmed that the government ceased mandatory mobilization of public sector workers by the 2021 harvest. In contrast, Turkmenistan continues to use forced labor in its cotton fields . The U.S. maintains an import ban on all Turkmen cotton products.

Downstream, forced labor has also been documented in textile and garment production. Uyghur workers have been forcibly transferred to factories across China under state-sponsored labor programs.

In one high-profile case, the Chinese textile conglomerate Esquel Group was sanctioned by the U.S. in 2020 and again in 2024 for ties to Xinjiang labor. Clients including Nike and Tommy Hilfiger subsequently dropped the company. In another case, Uniqlo had shipments of cotton shirts blocked by U.S. Customs in 2021 after failing to prove the cotton was not from Xinjiang. French prosecutors have also investigated Inditex (Zara), Uniqlo, and others for concealing crimes against humanity linked to forced labor.

Beyond China and India, migrant garment workers in countries like Malaysia, Jordan, and parts of South Asia face conditions including passport confiscation, debt bondage, and forced overtime. These practices, while often undocumented, meet international definitions of forced labor. Even within developed countries, exploitative garment workshops — such as those exposed in Leicester, UK in 2020 — have shown how vulnerability and opacity enable labor abuses.

The United States has led enforcement through the Uyghur Forced Labor Prevention Act (UFLPA), which came into force in 2022. It bans all goods with inputs from Xinjiang unless importers can prove they are free of forced labor — a standard that is nearly impossible to meet under current conditions. Since the ban’s introduction, thousands of shipments have been detained at U.S. ports, especially in the apparel, cotton yarn, and solar sectors.

Traceability Challenges

The key operational challenge for businesses is traceability. Cotton is often blended, processed in multiple jurisdictions, and traded as bulk commodities, making origin verification complex.

Xinjiang cotton is frequently exported as yarn or fabric to third countries such as Bangladesh or Vietnam, where it enters global apparel supply chains without clear documentation.

Watchdogs have highlighted how forced labor cotton continues to reach international markets under layers of reprocessing and subcontracting.

Forensic cotton testing is becoming more common, but full supply chain transparency remains elusive. Many companies cannot trace their cotton beyond Tier 1 suppliers. As a result, even those with well-meaning sourcing policies are exposed to risk.

With new legislation coming into force and consumer expectations rising, companies face growing pressure to audit deeper, disengage from high-risk regions, and prove compliance with evolving human rights standards.

Announcing a strategic partnership with Southern Pulse

Fri, 11 Jul 2025 00:31:13 GMT

BARCELONA, SPAIN – July 15, 2025

Evidencity Forms Strategic Partnership with Southern Pulse to Accelerate Global Expansion of AI-Powered Research Solutions

Strategic partnership brings two decades of Latin American expertise and Nelson AI research companion to global markets.

BARCELONA, SPAIN – Evidencity, a leading provider of data, research and compliance solutions, today announced a strategic operating partnership with Southern Pulse, a boutique investigations firm with two decades of specialized experience in Latin American markets.

The strategic partnership positions Evidencity to accelerate the global expansion of Southern Pulse's AI research companion, Nelson, while significantly deepening its capabilities across Latin American markets.

The partnership leverages Evidencity's established client relationships, technology team, and global collections network to scale Southern Pulse's innovative AI research technology beyond its current focus on the Americas. Nelson, Southern Pulse's flagship AI research companion, will now benefit from Evidencity's emerging and edge markets reach to serve clients worldwide.

"This partnership represents a pivotal moment in our growth strategy," said Evidencity Partner David Niccolini.

"Southern Pulse brings not only cutting-edge AI research technology but also invaluable on-the-ground expertise that has been refined over twenty years of operations in Latin America. Their deep understanding of the Americas and investigative methodology provides us with a proven blueprint for expansion."

Southern Pulse's two decades of experience conducting in-depth, on-the-ground research throughout Latin America offers Evidencity a strategic framework for identifying and partnering with boutique investigations firms in other key markets. This partnership model allows Evidencity to strengthen its current offerings while maintaining the specialized local expertise that clients value in complex cross-border investigations.

The partnership also brings Evidencity access to an established client portfolio that spans multiple industries and jurisdictions across Latin America. These existing relationships will be expanded to offer Evidencity's full suite of global services, beyond their current regional scope.

“Evidencity was born the moment that we at Southern Pulse realized an opportunity for global reach but didn’t want to dilute the brand,” said Samuel Logan, founder of both Southern Pulse and Evidencity.

“Southern Pulse’s model for ground up research and a deep understanding of how data is locally organized drove the focus of Evidencity’s innovative ‘dirt to consumer’ research methodology,” he added.

This strategic partnership allows Evidencity’s operations team to completely handle Southern Pulse’s back office needs, enabling former Director of Operations for Southern Pulse, Caitlin Klemme, to represent both companies as the Director of Client Relationships.

“This strategic partnership puts our clients at the forefront, offering them unparalleled access to the best research and data for emerging markets whether it be AI-powered, hybrid, or boots on the ground. While existing solutions across compliance, research and investigations focus on methodologies for the post-9/11 world, Southern Pulse and Evidencity have always remained a step ahead. There is a significant gap in the market for high quality research, investigations, and data curation that support the delivery of top-knotch information on emerging and edge markets. Together we fill it.”

The partnership supports Evidencity's broader strategy of combining advanced technology solutions with deep regional expertise to deliver comprehensive investigative and research services to clients operating in increasingly complex global markets.

Financial terms of the partnership were not disclosed. The strategic operating partnership is effective immediately.

China & Indonesia’s forced labor-stricken nickel parks

Tue, 08 Jul 2025 14:23:29 GMT

China is rapidly stockpiling nickel, seizing on low global prices to double its strategic reserves of the metal, which is critical for both stainless steel and electric vehicle batteries. According to a Financial Times investigation published in July 2025, Beijing is estimated to have purchased up to 100,000 tonnes of high-purity “class one” nickel since December 2024.

The move is widely seen as a response to rising geopolitical tensions with the United States and a reflection of China’s push to secure its critical mineral supply chains. Analysts point to a sharp increase in Chinese nickel imports and withdrawals from the London Metal Exchange as further evidence of a concerted national effort to stockpile the metal.

This surge in Chinese purchasing has deep links to Indonesia, which has become the world’s dominant nickel supplier.

Indonesia hosts vast nickel laterite deposits, primarily on the islands of Sulawesi—especially in Morowali, Kolaka, and Konawe districts—and on Halmahera in North Maluku.

Traditionally, Indonesia exported this nickel-rich ore in raw form. However, in January 2020, the government imposed a ban on the export of unprocessed nickel ore , aiming to stimulate domestic value-added production.

The ban forced foreign buyers, chiefly Chinese metallurgical companies, to shift their investments into local processing facilities.

In the years since the ban, dozens of nickel smelters have been constructed across Indonesia, particularly in large industrial parks like the Indonesia Morowali Industrial Park (IMIP) in Central Sulawesi, the Weda Bay Industrial Park (IWIP) in North Maluku, and other zones in Southeast Sulawesi and Obi Island.

These complexes are joint ventures between Indonesian and Chinese companies such as Tsingshan and Delong , which now source nickel ore directly from local mines, many of which they own or operate.

As a result of these developments, Indonesia’s nickel output has expanded dramatically.

By 2022, the country was producing nearly half of the world’s nickel ore —far surpassing other suppliers— and is projected to maintain this lead through 2030.

China is the primary destination, although Indonesian nickel chemicals are also shipped to South Korea and Japan.

A Supply Chain Anchored in Indonesia

Once in China, Indonesian nickel intermediates are refined and processed by companies such as GEM Co. , CNGR , and Zhejiang Huayou .

These materials are used in various industrial applications, including the production of electric vehicle batteries.

China’s largest battery manufacturer, CATL (Contemporary Amperex Technology Ltd.), has also entered joint ventures in Indonesia to secure direct access to nickel feedstock.

Global automakers— Tesla, Volkswagen, BMW, Hyundai, Ford, BYD , and others—rely heavily on nickel-rich batteries for multiple EV models.

Tesla, for instance, signed a USD 5 billion deal in 2022 to secure Indonesian nickel for its supply chain.

Despite the growing emphasis on nickel’s role in the clean energy transition, the bulk of global nickel output—roughly two-thirds—is still used in stainless steel, an essential alloy for construction, infrastructure, and consumer goods.

China produces more than half of the world’s stainless steel, much of it using feedstock sourced from Indonesia.

Nickel also plays a role in electroplating and is a key alloying material in high-end electronics, electrical equipment, and non-ferrous alloys.

Abuses in Indonesia’s Nickel Parks

While Indonesia’s nickel sector has become indispensable to global industry, its growth has come at a steep human cost.

Over the past few years, numerous investigations have documented widespread labor rights abuses and indicators of forced labor in the sector.

In 2024, the U.S. Department of Labor added Indonesian nickel to its List of Goods Produced by Child Labor or Forced Labor , citing consistent reports of coercive and exploitative working conditions.

Workers at nickel facilities in Sulawesi and Maluku have been found to endure excessive and involuntary overtime, unsafe conditions, withheld or unpaid wages, and arbitrary fines. There have also been reports of threats, violence, and debt bondage.

Chinese migrant workers, in particular, face acute vulnerabilities. Often recruited under deceptive terms, they have reported arriving at nickel operations only to have their passports confiscated and their pay drastically reduced.

According to China Labor Watch investigations conducted between 2021 and 2023, workers at facilities such as PT Virtue Dragon Nickel Industry were promised salaries of approximately USD 2,200 per month but ended up receiving as little as USD 150.

When attempting to leave, they were asked to pay fees as high as USD 7,400 to retrieve their passports, effectively trapping them in debt bondage.

Other abuses included contract substitution, denial of rest periods, lack of legal work permits, and physical violence for minor infractions. These conditions meet the international definitions of forced labor and modern slavery.

The abuses are concentrated in the large Chinese-Indonesian joint venture parks that now dominate the nickel processing landscape. An estimated 6,000 Chinese migrant workers are employed in these industrial zones, alongside tens of thousands of Indonesian workers. Both groups face dangerous working environments and limited recourse to justice. For Chinese workers, isolation, language barriers, and lack of legal status amplify their risk of exploitation.

Safety Failures

The scale of industrial accidents in Indonesia’s nickel sector also reflects systemic safety failures. According to Trend Asia, a Jakarta-based environmental and labor rights group, there were 93 industrial accidents in the nickel sector between 2019 and 2023, resulting in 91 fatalities and 158 injuries.

In the first half of 2024 alone, 17 additional accidents led to 8 more deaths and 63 injuries in major hubs like Morowali and Weda Bay. Common incidents include furnace explosions, vehicle crashes, and fires—often attributed to lax regulation, poor maintenance, and inadequate training in a sector rushing to maximize output.

Indonesian workers typically earn between IDR 4 and 5 million per month (USD $300–$330), an amount barely sufficient to cover basic living expenses in remote mining regions where costs are high.

As a result, workers rely heavily on overtime—often far beyond legal limits—to earn a livable income. Reports of wage theft, withheld overtime pay, and unexplained deductions are common, as is intimidation of those who speak out.

In sum, Indonesia’s nickel boom has been a windfall for global industries and a strategic asset for countries like China. But the conditions under which this supply is secured expose serious risks. As the world accelerates its transition to electric mobility and green technologies, the social and ethical costs embedded in critical mineral supply chains are becoming impossible to ignore.

A viral chocolate sensation with unseen costs - Part 2

Tue, 01 Jul 2025 08:40:20 GMT

The Dubai chocolate bar phenomenon inspired an international wave of imitators—brands and retailers alike eager to capitalize on the moment.

But who supplies the cocoa behind these products, and under what conditions is it produced?

High traceability, persistent risks

Certain reputable companies have made conscious efforts to inform consumers about the origin of their chocolate with varying degrees of success.

Lindt & Sprüngli , one of the few large companies selling a "Dubai-style" bar, reports that 100% of its cocoa beans are traceable through its Farming Program, which operates in countries including Ghana, Ecuador, and Madagascar.

Its cocoa is barcoded and linked to mapped farms, with audits conducted by Earthworm Foundation.

Love Cocoa , sourcing Colombian cocoa through Luker Chocolate , uses beans from post-conflict areas where cocoa production is promoted as an alternative to illicit crops.

While traceability is stronger and the supply chain more consolidated, local reports suggest issues with land tenure and precarious seasonal labor.

Luker does not disclose how many farms are externally audited or whether labor inspections occur.

Limited transparency in conventional brands

More commercial brands appear to have a lesser level of transparency.

For example, Bouchard sources cocoa from Ghana and Côte d’Ivoire but does not specify whether it uses segregated or mass balance supply.

Ghana and Côte d’Ivoire together account for over 60% of global cocoa production and are among the countries with the highest prevalence of child labor and hazardous work.

Trader Joe’s Dubai-style bar, produced by Patis Food Group in Turkey , has no cocoa origin declared.

Turkey is not a cocoa-producing country, so the beans are likely imported via European bulk supply from West Africa or Latin America. Given the product’s price and lack of labeling, the cocoa is most likely conventional.

Processors like Barry Callebaut, Cargill, and Olam dominate the global cocoa trade and serve as key suppliers to chocolatiers and food manufacturers.

Each of them operates large grinding facilities and warehousing hubs in Côte d’Ivoire, Ghana, Nigeria, Brazil, and Indonesia.

While they run sustainability programs, investigations have found that traceability is often not guaranteed at the first mile—meaning beans from unregistered farms or illegal plantations may enter the supply.

For example, Barry Callebaut claimed in 2023 that it could trace 70% of its cocoa to cooperative level. Yet a 2022 joint investigation by Lighthouse Reports and The Washington Post revealed that cocoa from protected forest areas in Côte d’Ivoire still enters supply chains , particularly when intermediaries aggregate and mix beans before they reach exporters.

Structural limits to traceability

The problem is compounded by national cocoa marketing boards. In Ghana, for instance, the Ghana Cocoa Board (COCOBOD) controls pricing and export logistics.

While this ensures a baseline farmgate price, it also means that beans from different farms are pooled before export .

This makes true traceability to the individual producer nearly impossible under the current system.

In Ecuador and Colombia, which export smaller volumes of cocoa but have more direct trade structures, traceability is easier to establish.

Still, land disputes, pesticide exposure, and temporary contract work are common issues in farming communities.

In post-conflict Colombia, armed groups have at times coerced farmers into producing cocoa under extortion, though this has diminished in recent years.

Ultimately, the copycat bars capitalizing on the Dubai trend represent different levels of risk.

The cheapest and least labeled offerings are almost certainly using conventional cocoa—mixed, untraceable, and potentially linked to child labor or illegal farming.

Premium brands like Lindt and Love Cocoa offer stronger oversight, but even they depend on certification schemes or internal monitoring systems that can’t always detect labor rights violations, particularly when those occur below the cooperative level.

Tracing Copper’s Human Risks: A Zambia Case Study

Tue, 24 Jun 2025 15:29:38 GMT

The copper wiring and components powering our modern world carry a hidden human cost.

From the mines of Zambia and the DRC to processing plants in China’s Xinjiang region and even the locked-down mining sites of North Korea, vulnerable workers – including children – have been exploited at various stages of copper production.

A Global Metal with a Human Cost

Copper is ubiquitous in electrical infrastructure, electronics, construction, and renewable energy technologies. Global demand for copper is booming, especially with the rise of electric vehicles and clean energy, since copper is crucial for power transmission and batteries. Major producing countries include Chile - the world’s top producer - the DRC, Peru, China, and Zambia.

In the DRC, which sits atop the resource-rich Copperbelt, artisanal mines rely on child labor on a shocking scale.

A 2013 report found that 40% of artisanal miners in southern DRC’s copper and cobalt belt were children, some as young as eight years old working in hand-dug mine shafts.

Firsthand accounts described kids spending their days hauling heavy sacks of copper ore and even suffering serious injuries and illness from the harsh conditions. The U.S. Department of Labor officially recognizes copper mining in the DRC as being tainted by child labor – a grave violation of human rights and international labor standards.

Even in China, the world’s largest copper consumer and a major refiner, concerns have emerged about forced labor. In the Xinjiang region, where the Chinese government has instituted oppressive labor transfer programs targeting Uyghur and other Muslim minorities, a prominent copper mining and processing company was recently implicated.

In 2024, the U.S. government banned imports from Zijin Mining’s Xinjiang subsidiary (Habahe Ashele Copper Co.) over evidence it was profiting from forced Uyghur labor.

This move placed the firm on the U.S. Uyghur Forced Labor Prevention Act entity list, reflecting widening scrutiny of possible forced labor in Chinese mining operations.

At the extreme end of the spectrum lies North Korea, where the state itself compels labor in mines. The secretive regime’s export industry has long been underpinned by prison camp labor.

Investigations by the UN and human rights groups found that political prisoners in North Korea are forced to work in copper mines under brutal conditions. In one case, men imprisoned at Camp 12 (Jonggo-ri) were made to toil in a copper mine, with the “intensity and duration” of this involuntary work described as deadly.

North Korea’s use of forced labor in mining – including copper, coal, and other minerals – is institutionalized slavery, helping the regime earn hard currency.

By contrast, Chile’s large-scale copper mines – which supply over a quarter of the world’s copper – operate in a more regulated environment with established labor unions and oversight.

There are no reports of systemic forced or child labor in Chile’s formal copper sector, illustrating how strong governance can curb egregious abuses.

From Pit to Cathode: How Forced Labor Creeps In

To understand where labor exploitation occurs, it’s important to grasp the copper mining and refining process – and pinpoint its vulnerable points.

Copper typically begins its journey in open-pit or underground mines, where raw ore containing copper is extracted.

In industrialized mines such as the vast Nchanga open-pit mine in Zambia’s Copperbelt, heavy machinery and a formal workforce are the norm.

However, in many African and Asian copper sites, especially artisanal or small-scale mines, the extraction stage is labor-intensive and poorly regulated. While industrial mines are highly mechanized, artisanal and small-scale mining of copper often involves manual labor in unsafe conditions.

After ore is extracted, it must be processed and refined. The ore is crushed and milled to produce a concentrated form of copper minerals, which is then smelted at high temperatures to yield impure copper.

Finally, refined copper cathodes are produced via electrolysis. The smelting and refining stages are typically capital-intensive and thus dominated by larger companies – but they present their own labor risks.

For example, Human Rights Watch documented Zambian smelter and mine workers being pressed into 18-hour shifts with little regard for safety. There is also evidence from Indonesia and China of migrant industrial workers kept in factories under conditions that meet the criteria of forced labor.

Critically, once copper ores from various sources reach a smelter, they are combined and melted together, obliterating separate origin traces. This is why the ore-to-smelter juncture is a major vulnerability for traceability.

In regions like Zambia and DRC, artisanal miners – including children – dig copper ore by hand and sell it to middlemen. These middlemen might be agents of larger smelters or simply traders who aggregate ore.

Where criminal syndicates or corrupt officials are involved, coercion can enter the picture. The U.S. State Department reports that in Zambia some children have been forced by gangs to carry and load copper ore in mining areas. This amounts to forced child labor intertwined with criminal trafficking.

Case Study: Labor Abuses in Zambia’s Copperbelt

Zambia is Africa’s second-largest copper producer and has long been seen as a stable mining jurisdiction.

One major issue has been the conduct of foreign-run mining companies.

In the 2000s, as copper prices boomed, Chinese state-owned firms acquired several Zambian copper mines. By 2011, Human Rights Watch research revealed persistent labor abuses in Zambia’s Chinese-owned mines.

Zambian miners described 12-hour shifts deep underground without proper ventilation, lack of safety equipment, and threats of firing if they refused dangerous tasks.

One miner told investigators, “They just consider production, not safety. If someone dies, he can be replaced tomorrow. And if you report the problem, you’ll lose your job.”

The “jerabos” - gangs of copper thieves and illegal miners - also wield power in Zambia. They commonly invade old waste dumps or closed shafts to dig out copper ore remnants. Their operations are risky, but the economic lure draws in many locals, including youths.

Crucially, these gangs do not operate in isolation: illegal miners often sell to licensed copper buyers and traders, including some who double as influential crime kingpins. In fact, some crime bosses have obtained legitimate mining licenses or partnerships as a front, blurring legal lines. This integration means stolen or informally mined copper finds its way into the formal market with alarming ease.

Reports indicate that children are caught up in this underworld. Some youths scavenge ore from waste piles to earn a pittance. Others are exploited by gang leaders who force them to haul and load copper ore under threat. The U.S. State Department noted cases of children as young as 10 being compelled by jerabo gangs to carry copper ore to trucks in Zambia.

Zambia’s case shows a dual challenge: holding large companies accountable so that mines run by multinationals uphold labor standards and tackling the informal, illegal segment where forced and child labor thrive out of sight. Both require vigilant oversight and transparency in the supply chain.

A viral chocolate sensation with unseen costs - Part 1

Tue, 17 Jun 2025 14:13:48 GMT

What began as a local dessert in Dubai quickly spiraled into a global sensation. The Dubai chocolate bar, a pistachio- and knafeh-filled confection created by FIX Dessert Chocolatier, achieved viral fame across TikTok and Instagram in 2023 and 2024.

However, behind luxury chocolate products, cocoa sourcing concerns and opaque global supply chain practices still lurk.

From small artisan creators in Dubai to multinational chocolate conglomerates, few brands can confidently say their chocolate is free of human rights violations.

Forced labor in cocoa: a persistent crisis

Cocoa farming has long been plagued by labor abuses. In West Africa - home to 60 - 70% of the world's cocoa supply - hundreds of thousands of children work under dangerous and exploitative conditions.

The use of trafficked labor, hazardous tasks (like using machetes), and exposure to agrochemicals are all well documented in countries like Côte d'Ivoire and Ghana.

Many children working on cocoa farms are between the ages of 5 and 17. Tasks include clearing land, spraying pesticides without protective gear, harvesting pods with machetes, and transporting heavy loads.

The work is often unpaid or underpaid, and in many cases, children are trafficked from neighboring countries like Burkina Faso and Mali under false promises of schooling or jobs.

These children frequently live in isolated villages without access to schools, healthcare, or safe drinking water. Many work up to 12 hours a day, often with no protective equipment or adequate nutrition.

Reports by the U.S. Department of Labor, NORC at the University of Chicago, and NGOs like International Rights Advocates have consistently found widespread violations of international labor standards.

Corporate commitments vs. reality

Major chocolate producers, including Nestlé, Mars, Ferrero, Mondelēz (Cadbury), Lindt, and Hershey, have been implicated in lawsuits and reports alleging complicity or negligence regarding child labor in their supply chains.

Despite sustainability programs and pledges, enforcement is weak and abuses persist. Voluntary industry efforts such as the Harkin-Engel Protocol have repeatedly missed deadlines to eliminate child labor.

Recent petitions and lawsuits filed in the U.S. (e.g., International Rights Advocates v. U.S. Customs and Border Protection, 2023) have exposed continued ties between chocolate sold in Western markets and child labor.

A 2020 NORC study estimated that 1.56 million children were engaged in hazardous work in cocoa production in Côte d'Ivoire and Ghana. It found no significant decrease in child labor prevalence despite decades of corporate commitments to eradicate it.

Moreover, women and migrant workers are particularly vulnerable to economic exploitation, working long hours for little or no pay and lacking access to formal labor protections.

The persistence of these abuses is often attributed to extreme poverty, lack of farm-level oversight, opaque supply chains, and the price pressures imposed by major chocolate buyers. While consumers pay a premium for luxury chocolate, those at the bottom of the supply chain remain trapped in cycles of deprivation and exploitation.

Lacking ethical clarity

FIX Dessert Chocolatier, founded in 2021 by Sarah Hamouda in Dubai, is credited with creating the original viral Dubai chocolate bar. The bar's signature flavor, Can’t Get Knafeh of It, features pistachio cream, crispy shredded kataifi (knafeh) pastry, and tahini inside a thick shell of what is marketed as "Belgian chocolate."

The bars are sold exclusively through Deliveroo in Dubai and often sell out within minutes. FIX does not disclose the origins of its cocoa, and no certifications such as Fairtrade or Rainforest Alliance are advertised. Given the company's small scale, it likely uses mass-produced couverture chocolate imported from Europe - typically made from West African cocoa.

This makes FIX emblematic of a broader problem: small-scale or boutique brands relying on opaque supply chains with no traceability to the farm level and facing far less scrutiny.

While the quality of ingredients is emphasized, ethical sourcing is rarely part of the story.

The bar's success triggered a global wave of copycats from major chocolate brands and retailers eager to capitalize on the trend. These include Bouchard, Trader Joe's, Lindt & Sprüngli, and Love Cocoa, among others. They are all putting their own spin on the pistachio-knafeh concept. Some of these companies promote traceable or certified cocoa; others offer no transparency at all.

In Part 2, we will explore the larger companies marketing products under the Dubai chocolate bar label, what cocoa traceability means for them, and how supply chains are monitored - or not.

Child labor and illegal gold mining in Ghana

Tue, 10 Jun 2025 14:57:19 GMT

Ghana is Africa’s largest gold producer and has a substantial artisanal and small-scale mining (ASM) sector alongside large-scale industrial mines.

In Ghana’s ASM sector - locally called galamsey - child labor is a documented problem. Thousands of children, often between the ages of 10 and 17, work in unlicensed gold mines across the country.

In 2023–2024, rising gold prices drove even more people, including youth, into unlicensed mining, despite government crackdowns.

By 2024, about 40% of Ghana’s gold output was attributed to small-scale miners, though an estimated 70–80% of these operations remained unlicensed and operated illegally.

Child labor in Ghana’s gold mines is principally a result of poverty, lack of educational opportunities, and the demand for cheap labor in informal mining.

Children typically migrate or are sent from poorer regions to mining areas in the hope of earning income. Some are trafficked or bonded to labor by intermediaries, qualifying as forced labor or exploitative child labor under international standards.

Hazardous Working Conditions for Children

Child miners in Ghana endure hazardous conditions. They descend into deep, hand-dug shafts or pits that are prone to collapse, carry heavy loads of ore, and process gold with toxic chemicals. Children as young as 9 years old have been found working long hours to pull gold ore out of shafts, crush and pan it, and handle mercury to extract the gold.

Mercury exposure is a grave health hazard. Children inhale mercury fumes when the amalgam is burned and handle mercury with bare hands, risking neurological damage. Many child laborers also suffer from dust inhalation, leading to respiratory issues, injuries from sharp tools or falling rocks, and exhaustion from physically taxing workdays.

Girls who work at or around mining sites, often selling food or water to miners, face dangers as well, including a risk of sexual exploitation by older miners.

Informal Gold Trade and Lack of Traceability

The gold from unlicensed galamsey sites often bypasses official channels. According to Ghana’s Minerals Commission, most galamsey gold is smuggled out of the country, meaning it does not go through Ghana’s formal export processes or incur royalties.

Instead, this gold may be sold clandestinely to local buyers and traders who aggregate it. These traders might then illegally ship gold out through neighboring countries or sell to illicit buyers who export it, for instance, to Dubai—a known destination for informally mined gold from West Africa.

Even within Ghana, traceability is weak in the ASM gold supply chain. Local traders purchasing gold at or near mining sites often take little to no precaution to determine if the gold was produced through child labor. In some cases, traders bought gold directly from children working in the mines.

Ghana and the Gold Supply Chain

Ghana’s own small refineries and buying agents, including a government-owned gold trading company, have insufficient due diligence procedures to filter out gold tainted by child labor.

International refiners and manufacturers, unless they have rigorous sourcing audits, may unwittingly be buying Ghanaian gold that was mined by children or under other abusive conditions. Weak due diligence by international refiners enables child-labor-tainted gold from Ghana to reach global markets.

Several gold producers operating in or sourcing from Ghana have begun acknowledging the risks of modern slavery in their supply chains, though meaningful oversight remains inconsistent—particularly in the informal sector.

Galiano Gold, a Canada-listed company with operations in Ghana, stated in its 2024 report that while the overall risk of modern slavery is considered low, vulnerabilities persist in Tier 2 and Tier 3 suppliers. Similarly, IAMGOLD has conducted risk assessments for forced and child labor, outlining supplier due diligence efforts in its modern slavery statement. AngloGold Ashanti, which operates the Obuasi mine, has also explicitly addressed modern slavery concerns in its 2024 sustainability reporting.

These corporate disclosures indicate growing recognition of systemic risks, yet the depth and effectiveness of these assessments—particularly when it comes to detecting abuses in informal supply chains—remain limited and difficult to verify.

Factories of exploitation: forced labor in global manufacturing

Tue, 03 Jun 2025 18:54:17 GMT

Forced labor in manufacturing has become one of the most pressing human rights issues of the past decade. Around the world, tens of millions of people are trapped in factories, workshops, and worksites.

The International Labour Organization (ILO) estimates that forced labor generates illegal profits of about USD 150 billion per year , with manufacturing being a significant contributor.

Consumer Goods Tainted by Forced Labor

From garment sweatshops in South Asia to electronics assembly plants in East Asia, forced labor in manufacturing taints a wide array of consumer goods.

The U.S. Department of Labor’s monitoring has identified over 200 types of goods from 82 countries at risk, with bricks, garments, textiles, footwear, carpets, and fireworks appearing most frequently among products made with forced labor.

Migrant Workers at Higher Risk

Men comprise the majority of forced labor victims in these sectors, often enduring excessive hours, little or no pay, unsafe conditions, and restriction of movement or documentation. Migrant workers are especially at risk – their odds of being in forced labor are over three times higher than non-migrants, as many unscrupulous employers use debts, passport confiscation, or threats of deportation to bind foreign workers to factory jobs.

Women and children are not exempt either: women make up about 42% of forced labor victims and children about 12%, often in sectors like textiles or footwear where they may be paid nothing or trapped in apprenticeship schemes.

The Xinjiang Crisis: A Case of State-Imposed Forced Labor

Over the past five years, China’s Xinjiang Uyghur Autonomous Region has emerged as the most notorious case of forced labor in manufacturing. Multiple reports by governments and human rights organizations have uncovered a massive state-sponsored program of forced labor targeting Uyghur Muslims and other Turkic minorities in Xinjiang.

Since 2017, Chinese authorities have detained up to one million Uyghurs in “re-education” camps and high-security facilities , many of whom have been forced to work in factories both inside and outside Xinjiang. These individuals do not have the freedom to refuse the work; they labor under constant surveillance and threat of further detention, making this one of the largest instances of state-imposed forced labor in recent history.

Xinjiang's Global Supply Chain Links

Xinjiang is a global manufacturing hub for certain commodities – and that is what makes this forced labor crisis a worldwide concern. The region produces over 20% of the world’s cotton and the vast majority of China’s cotton. It is also a major source of textiles, apparel, footwear, electronics components, and polysilicon used in solar panels.

Beyond agriculture, labor transfer programs also move Uyghurs into industrial factories. Teams of officials have been documented going door-to-door in minority villages to recruit “surplus laborers” for distant factories – a process in which refusal can lead to detention.

Such workers are transported across China and placed into manufacturing jobs under closely monitored conditions. Human Rights Watch reported that Uyghur workers relocated this way “fear detention or other sanctions if they refuse,” meaning they effectively have no choice but to comply.

Corporate Exposure and Global Scandals

As awareness has grown, numerous company scandals and investigative exposés have revealed how forced labor in manufacturing touches global brands. These case studies illustrate both the depth of the problem and the rising pressure on businesses to respond.

China is not the only country that has been targeted. In Malaysia, which is home to many factories that rely on migrant labor, Top Glove Corp, the world’s largest medical glove manufacturer, was found in 2020 to be exploiting its migrant workers from South Asia.

U.S. Customs investigators uncovered multiple forced labor indicators at Top Glove – including debt bondage, excessive overtime, cramped and unsanitary living conditions, and confiscation of passports.

These abuses meant workers had to toil 12+ hours a day, sometimes 7 days a week, to pay off recruitment debts, and they were unable to freely quit. In response, the U.S. government imposed an import ban on Top Glove’s products in July 2020, blocking them at U.S. ports. Top Glove was enjoying record profits during the COVID-19 pandemic, but suddenly 22% of its sales market was cut off.

The Top Glove case became a landmark in enforcing labor standards: it proved that trade action against forced labor can drive corporate change. It also shone light on widespread exploitation in Southeast Asia’s manufacturing – since then, at least half a dozen Malaysian electronics and glove factories have faced U.S. import bans for similar forced labor findings.

Wider Regional Abuses: Bangladesh and India

In Bangladesh, the world’s second-largest garment exporter, an undercover 2019 exposé found factory supervisors locking exit doors and forcing seamstresses (some underage) to work overnight to meet production quotas – a practice that borders on forced labor by confinement.

In India, reports have documented the “Sumangali” scheme in textile mills of Tamil Nadu, where young women are bonded to three-year factory stints in exchange for a lump sum dowry payment, often enduring 12-hour days under strict controls – a form of debt bondage.

Forced labor in manufacturing is a grave injustice that has festered in the dark corners of globalization. But with greater awareness and concerted action, those dark corners are getting smaller. Whether it’s a cotton field in Xinjiang, a brick kiln in India, or a glove factory in Malaysia, the world is starting to send a clear message: no product or profit is worth the price of a person’s freedom.

The Human Impact of Cobalt Sourcing

Tue, 27 May 2025 12:38:42 GMT

Human rights investigations estimate that at least 25,000 children work in cobalt mines across the Democratic Republic of the Congo.

The scale of modern slavery in the Congolese cobalt sector is devastating: in 2024, the U.S. Department of Labor confirmed that over three-fourths of miners may be operating under forced labor conditions, involving coercion, debt bondage, or other involuntary arrangements.

Yet the DRC remains indispensable to the global green transition, producing approximately 70% of the world’s cobalt—an essential component of lithium-ion batteries used in electric vehicles and consumer electronics.

Chinese Dominance and Complicity

In late 2023, a U.S. Congressional commission highlighted the severity of the situation, noting that 80% of cobalt produced in the DRC is controlled by Chinese companies and subsequently refined in China—often under conditions marked by severe labor rights abuses in both mining and processing.

Chinese dominance in the sector is unequivocal: 15 out of the DRC’s 19 cobalt-producing mines are owned or financed by Chinese entities .

Corporate Accountability

Multiple companies have been accused of enabling or directly profiting from child and forced labor in the DRC’s cobalt industry.

A detailed investigation by the Business and Human Rights Resource Centre, published in late 2024, identified key mining operators and corporate structures associated with such abuses.

The report documented forced labor not only in informal artisanal mining sites but also in communities surrounding large industrial operations. It cited several Chinese-led joint ventures and Congolese state-owned firms as being complicit.

Specifically, the companies named included Sicomines, Deziwa Mining (Somidez), Kamoto Copper Company, and Tenke Fungurume Mining . Parent and ultimate parent companies associated with these operations include China Railway Group, Huayou Cobalt, China Nonferrous Metal Mining, China Molybdenum, Metalkol, Eurasian Resources Group, Gécamines, and Glencore .

Role of Traders and Middlemen

Abuse in the cobalt supply chain is not limited to mine operators. Trading firms and intermediaries have also played a key role. For years, Congo Dongfang International (CDM)—a subsidiary of China’s Zhejiang Huayou Cobalt—was the primary buyer of artisanal cobalt.

Amnesty International’s landmark 2016 report linked cobalt from mines known to use child labor directly to CDM, and ultimately into the batteries of major electronics brands. Huayou Cobalt initially deflected criticism but later admitted it “could not rule out” the presence of child-mined ore in its supply chain.

Trading depots around Kolwezi have similarly come under fire for purchasing cobalt with no questions asked, in effect sustaining networks that exploit children.

Some of these depots are reportedly linked to powerful Congolese politicians and military figures, perpetuating impunity within the system.

Profiteers and Political Ties

While specific individuals are seldom publicly named in labor abuse cases—due to legal risks and evidentiary challenges—figures like Dan Gertler exemplify the murky networks operating behind the scenes. The Israeli businessman, long active in the Congolese mining sector, was sanctioned by the United States for corruption.

Although those sanctions did not relate directly to labor abuses, Gertler’s opaque deals with state-owned enterprises diverted public revenues that could have been used to improve miner safety and wages. His role illustrates how entrenched interests have capitalised on the absence of oversight and regulation.

Trade and Market Repercussions

Allegations of modern slavery are now reshaping cobalt trade dynamics and corporate behaviour. Some downstream companies are distancing themselves from high-risk supply chains, while others are investing in ethical sourcing initiatives.

For instance, major automakers like Volkswagen have urged their suppliers to guarantee that no child labor is involved in the production of cobalt. Additionally, concerns over the presence of forced labor in London Metal Exchange (LME) cobalt inventories have prompted some buyers to reject LME-listed contracts altogether .

In response, the LME has introduced responsible sourcing requirements: since 2021–2023, all approved cobalt brands must undergo third-party audits and comply with OECD-aligned standards or risk de-listing.

Toward Ethical Cobalt

What was once a hidden local issue has escalated into a major global concern with broad policy and trade implications. Mounting evidence of forced labor in cobalt mining is prompting structural changes in how global supply chains are governed—from stricter import controls and mandatory due diligence regulations to evolving industry standards on responsible sourcing.

While regulatory progress is gaining ground, the situation on the ground remains dire. The DRC’s cobalt sector is deeply entangled in systemic poverty, weak governance, and geopolitical tension—particularly the growing influence of Chinese interests, which complicates efforts by Western actors to enforce transparency and accountability.

Despite these challenges, momentum for ethical cobalt is building. Consumers, investors, and regulators are demanding greater transparency. Companies—both large and small—are increasingly recognising that ignoring forced labor is not just unethical but also a significant business risk.

Ultimately, whether cobalt becomes a symbol of exploitation or a case study in ethical transformation will depend on sustained action and meaningful reforms.

Forced labor abuses in Indonesia’s tuna fishing sector

Tue, 20 May 2025 13:00:20 GMT

Indonesia is the world’s largest tuna producer, responsible for over 17.5% of global catches. It is also a major exporter of canned and processed tuna, with markets in the US and EU, making labor risks in this sector particularly relevant to international buyers.

Forced labor in the tuna fishing sector is a persistent concern in Indonesia, particularly involving Indonesian fishers employed on foreign-owned vessels operating in international waters.

Investigations by non-governmental organizations, journalists, and legal actors have consistently revealed a pattern of abuse and exploitation tied to global seafood supply chains.

Patterns of Exploitation at Sea

Indonesian workers on distant-water fishing vessels—primarily flagged to countries such as Taiwan and China—have reported being subjected to deceptive recruitment practices.

Many are recruited through third-party agencies using misleading contracts. These agencies have, in some cases, withheld passports and identification documents, making it difficult for fishers to leave their positions. Debt bondage is also common, as workers incur recruitment fees that bind them financially to the job.

Recruitment is often mediated by informal brokers, or calo , particularly in large tuna ports such as Benoa. Some of these intermediaries are connected to organised crime and have been linked to charging excessive fees, which further traps workers in debt cycles.

Once aboard, conditions can be extremely poor. Crew members have reported long workdays that can exceed 18 hours, inadequate rest, poor nutrition, lack of drinking water, and denial of medical care. There are also consistent reports of physical abuse, threats, and coercion. Several Indonesian workers have died under these conditions, with their bodies reportedly discarded at sea.

Oversight Gaps

These abusive practices are facilitated in part by the use of trans-shipment at sea, a method that allows fishing vessels to remain offshore for extended periods without returning to port.

This reduces opportunities for external monitoring or intervention and makes it harder to detect and prevent human rights violations.

Legal frameworks exist in Indonesia to address labour conditions at sea, such as Ministerial Regulation No. 2/2017 on human rights certification for fishing vessels. However, enforcement remains weak, and the country has not ratified key international standards such as ILO Convention No. 181 on private employment agencies.

Documented Incidents

One prominent case involved the Chinese-owned Dalian Ocean Fishing Company . In 2019, 24 Indonesian crew members were assigned to the Long Xing 629, where survivors later reported gruelling conditions and physical abuse. Four of the fishers died during the voyage.

In similar cases involving Chinese vessels such as the Wei Yu 18 and Zhen Fa 7 , Indonesian workers died from beriberi, a disease linked to malnutrition. The case of Daniel Aritonang, a young Indonesian man who died under these conditions aboard the Zhen Fa 7, was widely reported. His body was disposed of at sea.

In a separate case that gained international attention in 2025, four Indonesian fishers filed a lawsuit against the U.S.-based seafood company Bumble Bee Foods . The suit alleges that Bumble Bee knowingly benefitted from forced labour aboard Taiwanese vessels that supplied its tuna.

According to a report by Greenpeace Southeast Asia and the Indonesian Migrant Workers Union (SBMI), at least 12 Taiwanese-flagged vessels were involved in such abuses between 2019 and 2024. Four of these vessels supplied tuna to Bumble Bee.

The report includes testimonies from workers who described long hours, withheld wages, coercive working conditions, and links to illegal fishing practices such as shark finning. One fisher reported fainting from exhaustion but being pressured to continue working. He later saw the tuna he had caught sold under the Bumble Bee brand in a U.S. supermarket. Bumble Bee Foods did not provide a public response to these allegations at the time of the report’s release.

Supply Chain Exposure

The Indonesian tuna fishing sector is structurally dependent on foreign distant-water fleets, particularly those from Taiwan and China. Most reported abuses occur in international waters where jurisdiction is limited and oversight weak.

Informality in contracting and the presence of multiple middlemen in remote supply chains make it difficult for buyers to verify conditions. Tuna is often sold through informal arrangements, with few fishers receiving written contracts. In some reported cases, fishers earned as little as USD 4 per day before deductions .

Similar risks are found in tuna processing, where factory workers have reported deception about employment terms, denial of leave, and reliance on short-term contracts. These factors reduce accountability and increase the risk of abuse.

Initiatives such as seafood traceability systems, third-party certifications, and transparent supplier disclosures can help improve oversight. Businesses involved in tuna sourcing, as well as consumers and regulators, are encouraged to examine supply chain practices more closely.

Due diligence, vessel-level transparency, and worker feedback mechanisms are increasingly recognised as key components in addressing labour exploitation at sea. Greater awareness and scrutiny from downstream actors can help ensure that tuna products are not linked to abusive practices.

Tracing Risk in Silicon Supply Chains

Tue, 13 May 2025 14:54:11 GMT

Silicon is used in semiconductors powering electronics and the solar panels driving the energy transition. Extracted from quartz and refined into high-purity forms, silicon is transformed into wafers used in everything from smartphones to solar farms.

But behind its revolutionizing role lies a troubling supply chain increasingly scrutinized for links to forced labor, particularly in China’s Xinjiang region.

From quartz to wafers: A brief look at the supply chain

The silicon supply chain begins with the mining of silica-rich raw materials—primarily quartz or sand—which are refined into metallurgical-grade silicon through high-temperature smelting with carbon.

From there, the silicon is chemically purified into polysilicon, an ultra-high-purity form essential for manufacturing solar cells and semiconductors.

This stage is both energy-intensive and highly centralised: over the past decade, China—particularly the Xinjiang Uyghur Autonomous Region—has become the world’s dominant producer of solar-grade polysilicon, accounting for nearly half of global supply at its peak.

It is here, in the polysilicon production stage , that the clearest forced labor risks arise.

Multiple investigations have documented the use of state-run labour transfer programs that coerce Uyghur and other ethnic minority workers into employment in polysilicon plants under threat of detention.

Companies operating in Xinjiang benefit from low-cost electricity and state subsidies, making the region attractive for industrial-scale production.

Forced labor risks may also appear earlier in the supply chain—such as in quartz mining—particularly in regions with weak labor protections, though evidence there is more fragmented.

Once produced, polysilicon is cast into ingots and sliced into wafers, then integrated into solar modules or semiconductor components.

Because many downstream manufacturers rely on opaque or multi-tiered supplier relationships, forced labor in one upstream node can contaminate entire supply chains, especially when documentation is inconsistent or intentionally vague.

While China dominates the sector, other key producers of silicon and polysilicon include countries such as Germany, the United States, Norway, Malaysia, and South Korea—regions that generally operate under stronger labor and environmental oversight.

Understanding risks associated with silicon

Solar manufacturing remains the focal point of concern. Xinjiang has supplied as much as 45% of the world’s solar-grade polysilicon in recent years. That material is used by dominant module manufacturers whose panels are widely sold in Europe and the Americas. Even when companies operate outside Xinjiang, they may source wafers or silicon metal from suppliers who do not disclose raw material origins.

Semiconductor firms are generally less exposed. The purity requirements for chips mean that most polysilicon is sourced from countries such as Germany, Japan, or the United States. However, indirect risks—particularly in passive electronics or lower-tier suppliers—still exist, especially when component sourcing is opaque.

Automotive companies, including electric vehicle manufacturers, sit somewhere in the middle. They rely heavily on electronics and alloy materials, yet rarely engage directly with raw material producers. This makes traceability more difficult—and due diligence more important.

Sanctioned entities

Public attention has often centered on high-profile solar firms. But upstream, a wider group of Chinese companies—including Daqo New Energy, Xinjiang GCL, East Hope, and Xinte Energy —have been tied to state labor transfers.

Some are under U.S. sanctions. Downstream, their polysilicon feeds into global supply chains via manufacturers like LONGi, Trina Solar, and JA Solar .

Western firms that source solar modules or electronic components from these companies are now under pressure—not just from the public, but also from regulators—to verify their supply chains.

Traceability or illusion?

To navigate tightening laws—such as the U.S. Uyghur Forced Labor Prevention Act — some firms have begun bifurcating their supply chains: using non-Xinjiang material for products destined for Western markets, while continuing business as usual elsewhere.

While this reduces legal exposure, it does little to address the root problem and creates space for bad actors to infiltrate global supply chains undetected.

Supply chain opacity remains a major hurdle. In Xinjiang, third-party audits are impossible due to government interference.

Many suppliers do not clearly disclose the origin of their raw materials or the identity of upstream facilities. Documentation, when available, is often unverifiable.

This structural opacity makes it difficult for even well-intentioned companies to be confident in their sourcing.

Venezuela’s Prison Gang Turned Transnational Criminal Empire

Tue, 06 May 2025 11:42:04 GMT

Tren de Aragua (TDA) began as a violent extortion racket in Venezuela’s Tocorón prison and has since evolved into a sprawling transnational criminal empire with deep roots in human trafficking, extortion, and organised crime across the Americas.

In February 2025, the United States designated TDA a terrorist organization, highlighting the group’s growing international footprint and the severity of its activities.

TDA emerged between 2013 and 2015 inside the notoriously lawless Tocorón prison in Aragua state. Its name traces back to a railway construction project where early members posed as a labour union while extorting contractors. Under the control of Héctor Rustherford Guerrero Flores, alias Niño Guerrero, the gang consolidated power inside Tocorón, using the facility as a command centre until a high-profile government raid in September 2023.

TDA is structured both hierarchically and through semi-autonomous “franchises” operating across different countries. With over 4,000 members , the group engages in a broad range of criminal activities, including human trafficking and sexual exploitation, drug trafficking and distribution, contract killings and kidnapping, illegal gold mining, cyber-crime, robbery, and extortion.

What distinguishes TDA is not only the diversity of its criminal portfolio,

but its ability to control territory and act as an umbrella group for smaller criminal cells in areas under its influence.

Since 2018, TDA has extended its operations beyond Venezuela into Colombia, Peru, Chile, Ecuador, Bolivia, and Brazil, often following Venezuelan migration routes .

Its reach now includes at least ten U.S. states : Florida, Texas, New York, Colorado, Illinois, Louisiana, Indiana, Georgia, Virginia, and New Jersey.

Each cell functions with relative autonomy but remains linked to the core leadership, often replicating criminal models seen in Venezuela—especially debt-based sex trafficking and extortion.

Among its most lucrative enterprises is human trafficking, particularly of women and girls fleeing Venezuela. TDA's trafficking strategy follows a consistent pattern throughout Latin America and the United States. Recruiters target vulnerable Venezuelan women and girls—often already in precarious conditions—by offering jobs abroad. Victims are moved through informal crossings or smuggler-controlled corridors, with transport facilitators extorted along the way.

Once at their destination, the women are trapped in debt bondage, forced to repay inflated transport and accommodation costs through coerced sex work. Any resistance is suppressed through beatings, threats, or sexual violence. The use of debt as a tool of control mirrors trafficking models used by other major organised crime groups.

Operations in Chile were tightly controlled, with orders allegedly coming directly from Niño Guerrero . One of the highest-ranking figures was Carlos González Vaca, known as Estrella , who oversaw trafficking activities until his arrest in 2022.

Other key individuals included Luisa Moreno Rodriguez, who collected payments from victims; Hernán “Satanás” Landaeta Garlotti, who enforced compliance through violence; and Karialex Gonzalez Marrero, Satanás ’ romantic partner, who was convicted in 2024 for threatening a police officer.

This cell was informally known as La Plaza de las Mujeres (“The Women’s Square”). In addition to those directly involved in managing victims, TDA cells in Chile included individuals who managed the logistical side of smuggling.

These operatives coordinated border crossings, received migrants, and, during the COVID-19 pandemic, were involved in forging PCR tests to enable travel. This infrastructure allowed TDA to move victims discreetly while evading health and border controls, further entrenching their trafficking routes.

TDA trafficking operations have reached multiple U.S. states. In Tennessee, a ring in Nashville included Yilibeth del Carmen Rivero and her son Kleiver Daniel Mota Rivero, who were charged with using force and coercion to compel women into sex work. Kleiver also faced firearm possession charges.

In Louisiana, a group linked to TDA operated across at least five states—Florida, Texas, New Jersey, Virginia, and Louisiana itself—where over 24 women were kept in rotating locations to avoid detection. This network reportedly shared resources, moved victims between states, and used similar methods of debt coercion and migrant concealment.

TDA-linked trafficking also continues within Venezuela. Biesney José Ocanto López was arrested in Aragua after posing as a woman online to lure a teenage girl with false job offers. Authorities say he planned to smuggle her through Colombia into Peru for sexual exploitation. Though Ocanto claimed affiliation with a fictitious group, police confirmed the operation aligned with TDA control in the region.

While Tren de Aragua functions primarily through structured cells, authorities have also encountered individuals acting alone or in loosely affiliated operations. Estefania “Barbie” Primera, arrested in El Paso in 2024, drugged and prostituted a migrant woman in a hotel room, using methods mirroring TDA tactics but without a broader network being clearly identified. In Venezuela, Biesney José Ocanto López lured a minor through a fake online profile, offering work in Peru. He was arrested before he could move her across borders, but authorities believe his operation aligned with the Tren de Aragua's regional control.

These cases suggest that some criminals operate under TDA’s shadow or name to legitimise their actions—or as part of informal extensions of the group’s influence.

Project Tantalus: Mapping Global Tantalum Supply Chains back to the S&P 500

Tue, 29 Apr 2025 11:00:46 GMT

In March 2025, the Rwanda-backed M23 rebel group seized control of Walikale, a key mining town in Eastern Congo, tightening its grip on one of the most strategically important sources of coltan in the world .

In April, following peace talks in Doha the DRC government and the rebels jointly announced a ceasefire, committing to an immediate cessation of hostilities and a rejection of hate speech and intimidation.

Despite this agreement, reports indicate that M23 fighters remain active in parts of Walikale, with ongoing clashes and incidents of looting and extortion. The truce is fragile and the Kivu region remains volatile.

M23’s operations are not just military - they are deeply commercial. The group has embedded itself in the regional mineral economy, imposing illegal taxes on production and trade.

Analysts estimate that M23 now generates approximately USD 300,000 a month from mining activities alone, with much of that revenue coming from areas like the Rubaya mines - the largest coltan mine in the DRC. As their control expands, so does their impact on global supply cha ins.

Forced Labor in DRC's Tantalum Mining Industry

Tantalum, derived from coltan, remains central to global electronics manufacturing and in this part of the world, it is still extracted under the shadow of violence and coercion.

Forced labor is endemic in Congo’s artisanal mining, where more than 280,000 people are believed to work under exploitative conditions. Children reportedly make up nearly 40% of the workforce. In rebel-held areas, the line between labor and extortion blurs — with entire communities caught between survival and subjugation.

Evidencity estimates that at least 16,300 artisanal tantalum miners work under forced labor conditions every day in the DRC . This is the brutal human cost behind the capacitor in our phones or the circuitry in our cars.

Mineral washing practices

A less visible - but equally damaging - element of the illicit trade is the practice known as “mineral washing” - the deliberate misrepresentation of a mineral’s origin to conceal links to conflict zones or illicit extraction.

In Rwanda, this often takes the form of so-called “dummy mines” - non-operational or fictitious sites listed in official export documentation to provide cover for tainted Congolese coltan.

These ghost mines are equipped with falsified records that allow conflict minerals to be tagged as 'clean,' bypassing traceability systems and undermining the credibility of existing due diligence frameworks.

Investigations continue to reveal how high-risk minerals enter global supply chains. Swiss businessman Christopher Huber, for instance, has been repeatedly linked to “washing” conflict minerals.

Huber was accused of buying coltan smuggled from Congo and exporting it under false Rwandan origin via companies such as Rudniki. British national John Crawley has appeared as a recurring figure in related ventures, including Niotan Inc., a U.S.-based tantalum powder producer, which later became part of the KEMET Group.

Mapping issues from the dirt to the consumer

Niotan, previously linked to questionable sourcing practices through its connections with Rudniki, was acquired by KEMET Corporation in 2012. Following the acquisition, Niotan’s operations were rebranded as KEMET Blue Powder, maintaining its production of tantalum powder but operating under KEMET’s vertically integrated structure.

KEMET, now a subsidiary of Taiwanese electronics giant YAGEO, exemplifies vertical integration in the tantalum industry. Through entities like KEMET Blue Powder and KEMET de Mexico, the group controls the processing, manufacturing, and distribution of tantalum. While ownership has shifted, links to historical supply chain risks have not disappeared.

In addition, YAGEO’s involvement in philanthropic projects tied to the DRC only highlights the complexity of its corporate footprint, particularly as some of these initiatives involve partnerships with companies historically affiliated with Crawley.

One of Mr. Crawley’s companies is linked to another important smelter - Ulba Metallurgical Plant in Kazakhstan. Ulba, owned by state-owned entity Kazatomprom, reported 117 high-risk incidents during its most recent audit period. Some of Ulba’s tantalum was sourced through East Rise Corporation, a Hong Kong-based trader with ties to Crawley.

Evidencity’s team investigated these relationships and their links to the S&P 500 supply chains in a privately funded study in partnership with ATIN .

Visit the Project Tantalus public landing page to explore our key findings.

The Future of Conflict Minerals

Project Tantalus has demonstrated that modern slavery is not solely a humanitarian concern; it is deeply ingrained in global commerce. The instability and lack of governance in Eastern Congo allows armed groups to exploit minerals like tantalum to fund their activities.

History has shown that relying solely on government intervention to resolve systemic issues and eradicate modern slavery and forced labor is ineffective. While certification and traceability schemes are valuable, they cannot provide a complete solution on their own.

Looking ahead, corporate actors must play a more proactive role as they will continue relying on the DRC for sourcing. For example, US start-up KoBold Metals, backed by Bill Gates and Jeff Bezos, was recently looking into investing big in the country . Furthermore, the US government was said to be in exploratory talks with the DRC for a possible minerals deal.

The business case is clear: global operations are increasingly exposed to reputational, legal, and operational risks when supply chains intersect with forced labour or armed conflict. In high-risk regions like Eastern Congo, unchecked sourcing can mean not only reputational damage but also supply disruptions, regulatory penalties, and loss of investor confidence

This includes rethinking engagement strategies with upstream partners to prioritise transparency, local benefit-sharing, and more consistent sourcing from verified operators. Strengthening these relationships over time can reduce reliance on volatile markets — where sourcing risks are highest — and instead support formalised, traceable operations that build resilience through sustained commercial commitment

Efforts to eradicate forced labor must move beyond compliance into strategic action. This is why Evidencity’s team created our proprietary exposure scoring tool, which examines S&P 500 companies based on their reliance on tantalum, supply chain reporting, and their exposure to forced and child labor, to support action and informed decision-making.

Companies should also deepen supply chain mapping and enhance third-party verification across all conflict mineral streams — including tantalum, tin, tungsten, and gold. This means investing in due diligence tools designed for fragile contexts, engaging regional partners, and fostering local accountability mechanisms. Done properly, these efforts can help dismantle the systems of exploitation and build ethical sourcing models that promote stability, legitimacy, and long-term shared value.

US Sanctions Gazprombank Financial Network

Wed, 04 Dec 2024 01:22:14 GMT

The US has moved to nearly completely isolate the Russian financial system, forcing the global banking world to make a zero-sum choice.

Doing business with Russia just got a lot more risky. After years of preparation, research, negotiation and some struggle, the United States Government (USG) sanctioned Russia’s Gazprombank, its third largest banking financial institution (FI), and another 117 entities and individuals, which include fifty banking FIs in total.

Executive Order 14024, the authority under which Gazprombank and the others have been sanctioned, hit Turkey gas payments to Russia. Sanctions hit Gazprombank checking account holders abroad, who in Turkey, the UAE and Thailand can no longer use their debit or credit cards — and not access their funds — at points of sale or presumably ATM machines.

Rethinking Gazprombank deal and SFPS

Hand wringing in South Africa over oil and gas major PetroSA has officials rethinking a finance deal signed with Gazprombank to support the renovation of its Mossel Bay refinery project – a deal that had previously been guaranteed as sanctions proof. The ripple effect has spread through Luxembourg, Hong Kong, Switzerland, Cyprus, Armenia, Netherlands, and several other countries where Gazprombank owns and operates subsidiaries.

This is the last major Russian bank to be sanctioned, and represents nearly a complete isolation of the Russia from the global financial system. Observers can clearly see the outlines of two separate methods for inter-bank communication. The first and largest is the Society for Worldwide Interbank Financial Communication – commonly referred to as SWIFT. You’ve probably used a SWIFT code to send a wire from your bank to another bank in another country or currency. The SWIFT code tells your bank where to pay. The receiver’s bank account number is what tells the financial system who to pay. When you combine where and who, you get the IBAN number – another code many are likely accustomed to using.

But in the wake of its invasion of Ukraine and the subsequent sanctions regimes, the Russian Federation developed a new system, the System for Transfer of Financial Messages (SFPS). This alternate system was set up as a way to work around the SWIFT system. And it had largely worked through a complicated web of intermediaries until now, though forcing Russia and its partners to do business in “non-Western” currencies , such as the Dollar or Euro, or barter.

Bank with Putin or not

Meanwhile, sanctions risk has risen significantly for any individual or entity that conducts business with Gazprombank. In effect, you can conduct business on SWIFT or on SFPS, but not on both. Some analysts are already calling this move the coup de grâce for the Russian financial system, though some are discouraged by how long it took the broader international system to target all of Russia’s financial heavyweights. Separately, the approximately 160 banking FIs that operate on Russia’s SFPS will be forced now to make a zero-sum decision. Bank with Putin or not.

The US Treasury department has clearly stated that anyone conducting business through Russia’s parallel system will be considered “red flagged” and thus significantly exposed to future sanctions announcements. Though there is no established list or dataset of which banks or companies might be on this list, the USG has taken an impactful posture. It will challenge many countries and companies in the EU and beyond to comply.

Source of research for this article was conducted on TruthSeeker by running a level 1 data scan on Gazprombank.

Tamaulipas Illicit Network Index

Fri, 08 Nov 2024 15:19:15 GMT

One aspect of the cross-border activity often goes overlooked : the Cartel del Golfo and Cartel del Noreste control human and sex trafficking routes to the United States—often with the complicity of Mexican authorities.

In Northeast Mexico, two prominent criminal organizations— the Cartel del Golfo (CDG) and Cartel del Noreste (CDN)—are notorious for their roles in drug trafficking and gang violence. The latter is a direct offshoot of the infamous Los Zetas, which has fragmented due to internal rivalries.

Operating primarily in Tamaulipas, these cartels have established powerful networks that extend beyond the drug trade, infiltrating politics and business in the region. However, one aspect of their cross-border activity often goes overlooked: the Cartel del Golfo and Cartel del Noreste control human and sex trafficking routes to the United States—often with the complicity of Mexican authorities.

Influence and involvement

Press reports indicate that the Cartel del Golfo, with influence in areas like Reynosa and Matamoros, is deeply involved in human trafficking across Northeast Mexico. In one case, an individual named Mauricio Vega, reportedly affiliated with the CDG, was apprehended in Coahuila on charges related to human trafficking.

Furthermore, research networks have documented both cartels' involvement in human and sex trafficking operations and exploitation within Tamaulipas. Although high-profile leaders have not been directly charged with these crimes, they have overseen these operations, typically carried out by lower-level members of their organizations.

The political context and environment

These groups have exerted influence over local political life. Former governors of Tamaulipas, such as Tomás Yarrington Rubalcaba and Eugenio Hernández Flores, have been accused of maintaining ties with the CDG and engaging in money laundering schemes linked to cartel profits. Yarrington and Hernández allegedly laundered money through investments in construction and real estate, leveraging these industries to conceal illicit funds.

Eugenio Hernández Flores, in particular, remains active in local politics and has received support from the Partido Verde Ecologista. Investigations reveal his longstanding connections with influential businessmen who reportedly helped him launder cartel money through their companies. Business figures like Fernando Alejandro Cano Martínez, involved in construction, and Seyed Mohammed Farough Fatemi Corcuera, active in real estate, are suspected of assisting Hernández by channeling illicit funds through legitimate business fronts. These businesses likely include Materiales y Construcciones Villa de Aguayo, S.A. de C.V., Grupo Inmobiliario Cormon, and Inmobiliaria Santa Dolores. The same businessmen have been associated with Yarrington, who reportedly received assistance from other business figures, such as Gabriel Maldonado Pumarejo and Eduardo Rodríguez Berlanga, the latter of whom was arrested in Monterrey on corruption charges.

In connection with the same political corruption case, a third governor, Manuel Cavazos Lerma, was investigated, along with other local officials such as former Attorney General of Tamaulipas, Jose Guadalupe Herrera Bustamante; politician Ricardo Gamundi Rosas; former governor of Coahuila, Humberto Moreira; and former Secretary of Finance for Tamaulipas, Alfredo González Fernández. Many of these individuals are affiliated with the Institutional Revolutionary Party (PRI), which dominated the region’s political scene for at least two decades.

Human trafficking enablers

Nevertheless, Evidencity has identified cartel links extending to the National Action Party (PAN)—another prominent force in Mexican politics. Francisco Javier García Cabeza de Vaca, who became the first non-PRI governor of Tamaulipas in 86 years in 2016 and was previously the municipal president of Reynosa, has also been accused of connections with the Cartel del Golfo.

This intricate network of criminal actors, politicians, and business leaders has created a concealed infrastructure that enables cartel operations and influence in Tamaulipas. Through these connections, political and business actors have become enablers in the human trafficking activities and extreme violence perpetrated by these two cartels. Discover more in our unique dataset on Tamaulipas.

Leveraging Unique Datasets for Next Generation Compliance Programs

samuel@evidencity.com (Samuel Logan) — Fri, 11 Oct 2024 12:59:00 GMT

There are spaces where some of the world’s largest companies must operate shoulder to shoulder with bad actors, known and not.

Nearly 20,000 sanctions have been levied against Russian assets since Putin and his leadership team decided to invade Ukraine in February of 2022. The reality of economic expansion despite historically unprecedented levels of sanctions paints a clear picture of why sanctions are no longer a reliable, comprehensive tool for identifying and disrupting poor behavior.

Sanctions are showing their age as a leading indicator of poor behavior. Unique datasets that focus on illicit networks, identifying individuals and companies before they are sanctioned, allow compliance and enterprise risk management professionals to lean into the transparency required of next generation compliance programs.

Sanctions origins and the evolution of global economic interdependence.

Sanctions are showing their age as a WWII era weapon of economic warfare. Over 78 years have passed since the foundation of the United Nations – the multilateral body that underscored the necessity for economic interdependence. War is less likely as long as countries are more interconnected through trade, investment, and the mutual benefit of working together to grow. Against this context, sanctions were a powerful tool to coerce compliance. In today’s multipolar world, economic interdependence is no longer driven by a single set of interests and values, much like it was among the 21 countries represented at the signing of the 1945 Paris Peace Conference.

No, today’s economic realities dictate that there are several interdependent economic systems that do not rely on one another. While they do overlap somewhat, the various channels that facilitate the movement of goods and services, and finance, are no longer stymied by what a small group of countries may define as “sanctioned.” This is why traditional compliance programs that rely on sanctions monitoring, and action taken based on who has or has not been sanctioned, are less relevant in 2024 than they ever have been since 1945.

Economic realities and the limitations of
traditional sanctions

In the West, we think of extra-systemic patterns and the groups of relationships that dictate them as non-compliant. Or perhaps rogue. Indeed they are when evading United Nations defined controls. But so-called “rogue” states such as China and Russia are members of the United Nations Security Council. Yet they have their own world view. They look back at the West with a pointed finger and say “imperial.” This tit-for-tat exchange affects markets, products, goods, and services; more importantly, it creates spaces where some of the world’s largest companies must operate shoulder to shoulder with bad actors, known and not.

These illicit networks are almost always tied to sanctioned individuals and their companies. Afterall, companies don’t commit crimes. People do. But to see that someone has been sanctioned is little more than a warning light. You know something is wrong, but further diagnosis is required to figure out where the problem lies and how to fix it. This is why unique datasets that focus on illicit networks and the relationships that exist between known bad actors – those sanctioned or convicted of a crime – and their broader networks are an important addition to any forward-leaning compliance program, especially for those companies operating in emerging and edge markets.

International legislative responses and their impact on global compliance strategies

Naturally, governments in the West are aware of the geopolitical reality that we now operate in a multi-polar world – a reality that drives regulation to which all general counsels must adhere. In the United States, the Uyghur Forced Labor Prevention Act (UFPLA) has received much attention for both the focal point on forced labor reduction in China and the teeth that it applies to goods at US ports that have any suspicion of forced labor attached to them. And many businesses have suffered from fines and delayed delivery of just-in-time products. The UFPLA has spread from its initial focus on textiles to include polysilicon, plastics, chemicals, batteries, household appliances, industrial and manufacturing materials, and more.

In Canada, this style of “transparency” legislation has also taken hold with the May 2024 implementation of the Fighting Against Forced Labour and Child Labour in Supply Chains Act (formerly known as S-211). The EU has recently passed its own version of transparency legislation, the Corporate Sustainability Due Diligence Directive. Australia and the UK both have their own forms of transparency legislation, the Modern Slavery Act 2018 and the Modern Slavery Act 2015, respectively.

Regulatory and enforcement regimes that follow these legislative packages will only strengthen over time as governments continue to respond to geopolitical realities. At the same time, the compliance technology provider space has been slow to respond to an increased need for transparency. The advent of artificial intelligence (AI) and the drive to leverage AI tools into product development cycles to take advantage of the hype has been more of a distraction than a great leap forward. In the wake of this nearly two-year hype cycle, AI-driven big data models remain designed for companies that check a box – that need a minimal amount of information to meet requirements and move on.

Quick answers to short but important questions, like, “should we work with this person,” or “should we work with this company?” are still not readily available across multiple jurisdictions outside of mature markets like Canada or the United Kingdom. Transparency legislation demands that we take these questions a step further to more complex questions about the nature of relationships and second and third degree, or indirect, relationships between individuals and companies. True transparency has yet to be achieved. And when there is truly a need for transparency, general counsels and their teams that run global compliance or enterprise risk management (ERM) programs have come to realize that big data is not enough.

Leveraging unique data sets for a next
generation compliance

Unique datasets, specifically indices of illicit networks, begin to offer a way forward. First, they bring unstructured data into structured datasets that may be scanned against a large number of customers or suppliers. Next, while they do take into account who has been sanctioned or convicted of a crime, they treat these data as a starting point and dig from there. Individuals and companies related to sanctioned entities provide a landscape of possibilities for who has taken up the mantle for their sanctioned counterpart. These are the individuals who are likely to be sanctioned next, but only after several months, or more, of illicit behavior. Illicit network datasets also consider organized crime, and the relationships these individuals and companies may have with people who have been, or who will be sanctioned, and the politicians who provide cover and support, for a fee.

Unique datasets of illicit networks are powerful and have proven results. They allow you to see what you cannot see about relationships, especially in emerging and edge markets. Yet there is a limitation because they are man-made. The trade off for granularity and true transparency is speed and scale.

The ERM program manager who oversees 75,000 suppliers across 85 jurisdictions could build a program that leverages unique datasets for her entire program. This would be a powerful program, but getting there would be slow – measured in months to get set up rather than the weeks required for an enterprise-level ERM platform. The additional teams needed to conduct and manage the research required to keep these datasets reasonably updated is too heavy a lift for most vendors in this space. So she is more likely to leverage unique datasets for illicit networks where her supply chain is both critical and overlaps with those jurisdictions that are known to be troublesome due to the shifting sands of global geopolitics, and roll the dice on how much she understands about what’s happening across her global operations.

Yet transparency legislation dictates that she already needs the additional granularity, today in 2024. ERM and other compliance teams need details and confidence in their work to support, for example, the electronic vehicle (EV) company executive who might be called in front of the U.S. Congressional Select Committee on China to answer questions under oath about the source of chemicals used in his batteries. Or the mining equipment supplier who only after the fact discovered that he sold millions of dollars worth of equipment to a company in the Democratic Republic of the Congo that is partially owned by an – as yet – unsanctioned political power broker. Or the financial services compliance VP in Guatemala who has recently learned that his service has been used to launder money between the United States and a Venezuelan criminal organization.

The International Monetary Fund (IMF) expects the Russian economy to expand by 3.2% in 2024, while it assesses that the German economy will grow at a modest 0.2%. There are many variables that define this remarkable difference in economic performance, not the least of which are sanctions. According to one sanctions dashboard , nearly 20,000 sanctions have been levied against Russian assets since Putin and his leadership team decided to invade Ukraine in February of 2022. The reality of economic expansion despite historically unprecedented levels of sanctions paints a clear picture of why sanctions are no longer a reliable, comprehensive tool for identifying and disrupting poor behavior.

Sanctions monitoring and coverage should remain a central component of every compliance program. Yet only the programs that go beyond sanctions into illicit networks, leveraging unique datasets, will find themselves future proof as global leading economies continue to legislate transparency while unwinding the geopolitical order established nearly 80 years ago in France.

Evidencity Announces Launch of TruthSeeker, a Revolutionary Open Source Research Platform

Tue, 01 Oct 2024 12:55:41 GMT

Annapolis, MARYLAND -- (October 1, 2024) – Evidencity , a tech-enabled service that helps you see what you cannot see about people and companies in emerging markets, announced the launch of TruthSeeker , a new SaaS platform designed to streamline and enhance open source research for professionals in risk, compliance and investigative sectors. Free to join, and with a pay-as-you-go model,TruthSeeker offers an affordable, flexible and transparent approach for discovering reputation and relationship risk, and confirming identity for individuals and companies, worldwide.

TruthSeeker is poised to revolutionize how investigators, researchers, journalists and compliance professionals gather, analyze and confirm vital information, particularly in emerging markets such as Brazil, Turkey, Vietnam and Mexico.This tool provides accurate data on sanctions, criminal watch lists, political exposure, adverse and related media, reputation, relationships and identity, filling a significant gap for industries ranging from business consulting and software development to enterprise risk management, travel security and international trade.

The “complete the profile” feature leverages the Evidencity Research Operations team, composed of a global network of local professionals, who can conduct in-language, desktop research to verify identity and dig deeper into subject reputation and relationships.

"Professionals conducting investigations on tight budgets or within time constraints often struggle to find accurate, comprehensive information in emerging markets," said Samuel Logan, CEO of Evidencity. "TruthSeeker provides a robust solution that combines big data access with unique local insights to help confirm identities, map relationships and assess reputational risks—all within a transparent
pricing model."

Key features of TruthSeeker include:

Data Scans : Access to global sanctions, criminal watchlists, adverse media, local to federal political exposure, and illicit networks.
Natural Language Processing (NLP) : Leveraged to improve accuracy and reduce false positives for adverse and related media coverage.
Unique Local Data : Evidencity's network of local researchers around the globe, collecting insights on political exposure, pre-sanctions and organized crime at a local level.
Risk Signals : Every subject profile includes an actionable signal for risk assessment.
Deeper Reporting Options : When automated data scans fall short, in-language research from Evidencity’s global network of local experts can complete the profile.
Flexible, No Commitment Access : The platform is cost-effective, flexible and transparent research, delivered through a free-to-join, pay-as-you-go model.

One early beta tester, the Director of Research at a boutique strategic advisory firm, remarked: "TruthSeeker should have been my starting point for the search, not Google. Within minutes, it identified connections that traditional search engines overlooked—helping me uncover a potential corruption case in South America."

Evidencity invites investigators, journalists, researchers and compliance professionals to be among the first to test TruthSeeker and experience the future of open source research.

For more information about Evidencity or to schedule an interview, please contact press@evidencity.com.

The fragmented political landscape of the DRC

Tue, 16 Jul 2024 14:50:38 GMT

The DRC has a deeply fragmented political landscape characterized by numerous political parties and armed groups - a legacy of decades of conflict and colonization. This fragmentation is rooted in the country's ethnic diversity and the lack of a strong central authority and institutions.

While the political scene is dominated by a few major parties, these parties often struggle to maintain control beyond urban centers. In rural areas, local chieftains and militias wield significant power, often forming alliances with politicians for mutual benefit. Analysts estimate that this multipartyism has not had a positive impact on the security situation and peace in the country. The decentralization of power is compounded by the state's limited capacity to enforce laws across its large and often inaccessible territory.

DRC political parties

There are over 910 officially registered political parties in the DRC, a record number since the introduction of multipartyism. Among these 910 parties, more than 500 belong to the Union sacrée pour la nation (Sacred Union for the Nation, USN), the electoral platform of president Félix Tshisekedi.

Many of those political formations are small and their agenda often is built in support of the ruling UDPS party. At the moment, there are at least 31 such micro-parties in the DRC that can be categorized as "Tshisekedi-affiliated".

Such a party is the Alternative Action for the Love of Congo (4AC), which according to its manifesto aims to support prime minister Judith Suminwa, a member of UDPS and an ally of Tshisekedi’s, in forming an effective and responsive government that meets the expectations of the Congolese. Interestingly, 4AC was the only party to elect representatives in the Lubumbashi commune of Kenya.

Parties and platforms

In the DRC, it is common for parties to gather under numerous platforms and coalitions. For example, the Pact for a Restored Congo (Pacte pour un Congo Retrouvé - PCR) is a relatively new political platform created on January 23, 2024. The PCR brings together several political parties that are members of Tshisekedi’s Sacred Union: the Alliance of Allies of the UNC of Vital Kamerhe, the AAAP of Tony Kanku, the Bloc 50 Alliance of Julien Paluku and the Coalition of Democrats (CODE) of Jean-Lucien Busa. In total, the PCR has more than 230 national and provincial deputies . PCR aims to strengthen cohesion within the political family of Félix Tshisekedi and his ruling coalition.

In December 2021, another platform had been created under the name Horizon 2023 to rally for Tshisekedi’s re-election, bringing together 26 political parties, 67 associations and many public figures . It never joined the Sacred Union and claimed to serve the purpose of a more ‘homogenous’ political majority.

During the 2023 election, the opposition also gathered under the anti-Tshisekedi front. Four opposition leaders - Martin Fayulu, Moïse Katumbi, Augustin Matata Ponyo and Delly Sesanga - met in Lubumbashi to "unite their ideas and forces" and campaign for a transparent and peaceful election.

Local conflicts and political movements

Also, historically, some of the armed groups that participated in local conflicts transitioned into political movements, adding another layer of complexity to the national political landscape.

The Congolese Rally for Democracy (CRD), for example, active mainly in the North Kivu and South Kivu provinces, was formed by Congolese Tutsi refugees and Rwandan political exiles. After the signing of the 2003 peace agreement, the RCD was integrated into the DRC's transitional government, but factions of the group continued to fight under the M23. Another similar group that participated in the transitional government in 2009 was the National Congress for the Defense of the People (CNDP). These are political elements that still influence regional politics in the DRC.

For deeper insights on the current elected politicians in the DRC as of December 2023, you can follow Evidencity's work on our Lubumbashi-focused Local PEP check unique dataset here.

Evidencity conducts in-house research on TruthSeeker , researching companies and individuals of global economic interest.

Evidencity Welcomes Charles White as Senior Advisor

Fri, 12 Jul 2024 01:10:12 GMT

ANNAPOLIS, MARYLAND, UNITED STATES, July 11, 2024 Evidencity, a tech-enabled service that helps you see what you cannot see about people and companies in emerging markets, announces the appointment of Charles White as a new senior advisor to the company.

With a career spanning nearly four decades in the fields of security and risk management, White brings a wealth of experience and insight to the Evidencity team as they continue their expansion into the Eastern European market.

White boasts nearly 40 years of experience as a leader in designing, building and implementing comprehensive security solutions for leading organizations across the globe, including Airbnb and PwC. He has also held various leadership positions with the U.S. Secret Service, a law enforcement and security agency that protects the U.S. financial infrastructure and monetary obligations, as well as provides security for the President of the United States, foreign heads of state visiting the United States and events of national significance.

“It is an honor to join Evidencity, a company whose mission to facilitate ethical international business aligns perfectly with my values,” said Charles White, senior advisor for Evidencity. “I look forward to leveraging my experience to help expand our footprint in Eastern Europe. This region is becoming increasingly important due to significant legislation like the EU’s Corporate Sustainability Due Diligence Directive, which sets a new standard for responsible business practices across the EU.”

Charles’ extensive experience and deep understanding of the Eastern European market make him an invaluable asset to Evidencity. His role will be pivotal in supporting the company's business development efforts and enhancing its footprint in the region.

"I have known Charlie for years, and we have worked together well on important and sensitive projects before,” said David Niccolini, co-founder at Evidencity. “At the 2019 Africa Cup of Nations in North Africa, Charlie did an incredible job handling logistics and security, and I’m looking forward to utilizing his extensive expertise at Evidencity as we continue to expand into Eastern Europe.”

Evidencity is a tech-enabled consulting service that facilitates access to information and on-the-ground knowledge in challenging jurisdictions for investigators, compliance officers, researchers, journalists, and others. The company exists to combat modern slavery through investigative due diligence, supply chain transparency, and financial inclusion.

For more information about Evidencity or to schedule an interview with Charles White, please contact press@evidencity.com.

Evidencity launches TruthExplorer

Wed, 24 Apr 2024 00:16:05 GMT

New service uses unique data and proprietary methodology to support ethical business conduct through customer and supplier transparency.

“We support responsible business conduct through customer and supplier transparency and exist to combat modern slavery through helping global businesses operate ethically and avoid bad actors.”— Samuel Logan, CEO of Evidencity

ANNAPOLIS, MARYLAND, UNITED STATES, April 23, 2024 / EINPresswire.com / -- Regulatory and consumer pressure is increasing in major markets across the US, UK, EU and Australia, and thousands of multinational companies are now required to prove transparency in their supply chains. Meanwhile, consumers want companies to prove that modern slavery, or other illicit networks, were not involved in the production of their clothes or daily use products.

Evidencity, a tech-enabled solutions company that unearths hard truths required to conduct business ethically in emerging markets, announced the launch of TruthExplorer to help solve this growing problem.

This new service combines unique data for illicit networks and local political exposure to a proprietary methodology for relationship analysis and risk scoring to help clients develop a deeper understanding of the most challenging elements of their customer-supplier relationships. TruthExplorer is designed for security, compliance, legal and supply chain decision makers who need to understand the most challenging elements of their customer and supplier relationships.

Evidencity’s recent case study on forced labor in Ecuador , is the culmination of a five-month effort to test the in-house methodology and analysis framework on a challenging global supply chain. The TruthExplorer team meticulously mapped the global supply chain of an abaca plantation in Ecuador, from the dirt to the consumer, unveiling the dark reality of modern slavery embedded within international trade flows for dozens of products, including tea bags. This investigation shed light on the forced labor practices of Furukawa Plantaciones and connected these unethical practices to global companies unknowingly complicit through their purchasing of materials made with compromised abaca.

“The Ecuador case study proves that our proprietary methodology works, and that our team truly delivers insight to a market that needs to move beyond box checking and surface-level solutions into transparency for ethical and responsible business practice,” said Samuel Logan, CEO of Evidencity. “We support responsible business conduct through customer and supplier transparency and exist to combat modern slavery through helping global businesses operate ethically and avoid bad actors. We want to help our clients become and remain compliant, ahead of the forthcoming flood of transparency legislation.“

TruthExplorer’s process begins with understanding clients’ most pressing concerns, and defining the scope of the dataset. This data is then scanned and researched, subject by subject, which facilitates relationship analysis. Evidencity’s unique datasets are then analyzed against the data to discover hidden relationships. The new dataset is then risk scored and visualized, where the team gives additional attention to the highest risk subjects. Final deliverables include a structured dataset, the visualization of that data and a report that focuses on the highest risk elements of the customer’s data.

After 100 Days: Javier Milei's Closest Associates in Argentina's Government

Sat, 06 Apr 2024 00:01:12 GMT

Javier Milei is one of the most controversial politicians of the moment in Latin America. He is unapologetically decided on his policies and equally blunt in his diplomacy. After 100 days in government, it has become clear that those connected to Milei are as controversial. He and his cabinet have incited a boycott of taxes and overturned anti-nepotism decrees. Milei and other prominent figures maintain close links to human rights violators.

Born in 1970 in Buenos Aires, Milei had a tumultuous childhood and was subject to regular abuse by his parents, which he openly speaks about. As an adult, Milei became an economist by profession, having studied economics at the Universidad de Belgrano and receiving postgraduate degrees in economics and economic theory from the Universidad Torcuato Di Tella and the Instituto de Desarrollo Económico y Social, respectively. He later worked in banks, pension funds, and investment funds, as well as authored at least eleven books about economics.

In the meantime, he accumulated some modest wealth, declaring a net worth of approximately USD119,413 (estimated in April 2024), including real estate, vehicles and cash wealth in December 2022. More specifically, Milei owns real estate in Buenos Aires estimated at ARS6,657,569 (USD7,716.82) and two vehicles worth ARS6,121,400 in total (USD7,095.34). He entered the political sphere in 2021 when he was elected as a deputy.

Although he has spent little time as an active politician, Milei quickly built a support base and allies within Argentina’s political chambers. However, those who surround him are as radical and unabashed as the president is characteristically known to be.

Since 2023, Milei's government’s bold stance struggles
to change
Argentina’s fate.

Milei as president

One of Milei’s first acts as president was to nominate his sister, Karina Milei, as Secretary General of the Presidency. To achieve this, Milei altered a pre-existing decree designed to prevent nepotism within Argentina’s civil service – the decree prevented civil servants, including the president, from appointing close relatives to public positions. Ms. Milei lacked any prior political experience before becoming involved in her brother’s presidential campaign and subsequent nomination. Despite her role, she has stayed largely out of the media spotlight.

The former’s arrest was in response to his refusal to swear on the national constitution. The latter was arrested for crimes against humanity committed in a clandestine detention center during that period. However, he never faced trial after being declared unfit. Villarruel herself publicly announced on the 42nd anniversary of the Falklands invasion that she would seek to continue her father’s legacy without respect for the islanders’ right to self-determination, sparking renewed debate on the islands' sovereignty.

She is also reported to have visited Jorge Rafael Videla, former Commander-in-Chief of the Argentinian army and member of the military junta, although Villarruel attests that her visits were for research purposes for her books. At the same time, she also came to know Miguel Etchecolatz, the head of the investigative police during the dictatorship. Both Etchecolatz and Videla were sentenced for crimes against humanity.

Human rights risks in the global gold mining industry

Fri, 15 Mar 2024 14:12:09 GMT

As the world is moving towards more awareness and desire for cleaner, fairer, and more transparent practices, global mining giants have been under increasing scrutiny in all industries – gold is no exception.

The profitability and prominence of the global gold industry has been long based on practices which disregard with ease local community impacts, environmental degradation, and political controversies.

Gold extraction mostly occurs in regions marked by weak governance structures, corruption, and armed conflict, creating fertile ground for exploitation and human rights violations. Gold is tainted directly or indirectly with the actions of bad actors and the reputational risks of being associated with them.

Alleged association with Russian paramilitary

Recently, several gold mining companies active in Mali were targeted because of the association of the Malian junta with Russian paramilitary group, Wagner. It has been estimated that the country’s military junta regime pays approximately USD 10.8 million per month to Wagner Group . Wagner was declared a terrorist organization by the UK in September 2023.

Despite the lack of direct links between Resolute Mining, Barrick Gold, Allied Gold, and the Russian paramilitaries, the three companies were accused of indirectly supporting them.

How? The Malian state not only makes profit from taxing the activities of the three gold mining companies, which corresponds to millions of dollars, but also owns part of their mines.

Two out of the three companies named are linked to human rights abuses.

Three gold mining companies

Resolute Mining Limited , headquartered in Perth, Australia, maintains two subsidiaries in Mali to facilitate its mining activities – namely, SOMISY and SOMIFI. The junta owns 20% and 10% of those mines.

Barrick Gold , a corporation originating in Vancouver, Canada, controls the Loulo-Gounkoto mining complex in collaboration with the Malian junta, which owns 20%. Through taxing this venture, Mali reportedly makes 10% of it’s state income.

The also Canadian company Allied Gold co-owns the Sadiola gold mine with the junta-led Malian government, with ownership shares of 80% and 20%, respectively. While Allied Gold has made similar investments with government involvement in Senegal and Côte d’Ivoire, no other state holds a larger stake in their mines than Mali.

Two of the three companies named have gained notoriety for their links to human rights abuses and fatal crackdowns in Mali and elsewhere. In most cases, local security forces were guilty or complicit in the alleged violations.

Abuses and accusations

In 2015, Resolute Mining was accused of concealing a deadly protest in Mali’s Fourou commune with the complicity of the state. The mining company had reportedly contacted local law enforcement to remove protesters against its employment practices and presence in the area. The intervention resulted in fatal police shootings, but Resolute Mining was not required to report the incident.

Moreover, Barrick Gold was sued in 2015 for complicity in a case of serious human rights abuses against women and girls at its Papua New Guinea Porgera mine , which included rape, assault, and killings committed by private security staff and police officers. While over a hundred women were affected, 11 survivors moved legally against the company, claiming that the compensation initially offered to the abused was not enough to alleviate the damage by the abuse.

Barrick Gold was sued twice in the UK for incidents of excessive force against mine workers between 2008 and 2019 in North Mara, Tanzania. Barrick was sued again in November 2022 in the Superior Court of Justice, Ontario, Canada for alleged complicity in extrajudicial killings committed by the police guarding the mine. Barrick Gold denied responsibility, direction, or control over police officers assigned to the mine.

Barrick has been accused of significant environmental violations of OECD guidelines in Argentina and was fined USD 11.5 million by Chile's Environmental Superintendent for the irregular construction of the Pascua-Lama mine, which was suspended with a decision from the Environmental Court of Chile in 2013.

Evidencity conducts in-house research on TruthSeeker , researching companies and individuals of global economic interest.

The Democratic Republic of the Congo's electoral controversies

Fri, 16 Feb 2024 15:28:07 GMT

On January 20, Félix Tshisekedi was sworn in as president of the Democratic Republic of the Congo (DRC) for a second term. Tshisekedi was re-elected with more than 70% of the vote, amid questions about the validity of the results and logistical problems during the electoral process. His win has left the DRC in a spot of uncertainty.

Opposition candidates and their supporters questioned the credibility of the results and filed a petition to annul the vote. However, the constitutional court of the DRC upheld the results and declared Tshisekedi the winner. International observers have been concerned about the transparency of the December’s election.

Félix Tshisekedi: A controversial figure

Félix Tshisekedi's initial rise to power in 2019 was eventful, with some groups alleging he struck a deal with then outgoing president Joseph Kabila. The opposition had also then contested the results, claiming a rigged election.

Tshisekedi's presidency has been characterized by economic and political upheaval, including the COVID-19 pandemic, Ebola outbreaks, resurgent rebel groups, and escalating tensions with neighboring Rwanda.

Human rights issues, including allegations of arbitrary arrests, suppression of dissent, and crackdowns on protests, have been reported during Tshisekedi's presidency, undermining democratic principles and freedom of expression.

Corruption allegations and reports

Tshisekedi’s government has faced allegations of corruption, reports of embezzlement and misappropriation of public funds, and high-profile scandals. These cases often involved government officials accused of diverting public resources for personal gain as well as bribery and nepotism. Critics have often pointed to a perceived lack of accountability for Tshisekedi’s government. Furthermore, the lacking investigations and legal actions against those accused of corrupt practices cause concern.

Namely, during his first term, president Tshisekedi had announced a 100-day emergency program, prioritizing the construction of roads and the construction or refurbishment of facilities for drinking water, electricity, education, and health services. The budget for this program was channeled through the presidential office but was not successfully implemented. Tshisekedi's chief of staff was arrested in April 2020 for allegedly embezzling funds earmarked for this program.

Tshisekedi was re-elected with more than 70% of the vote, amid questions about the validity of the results and logistical problems during the electoral process.

Corruption allegations and reports

Targeting the opposition

The opposition in the DRC has been often targeted by state authorities, leading to incidents of frequent political violence.

Former presidential candidate and 2019 runner-up Martin Fayulu and his supporters, for example, were arrested and beaten by members of the national Armed Forces and the National Intelligence Agency for distributing leaflets advocating a day of protest on February 16, 2016. This was not a one time incident.

In December 2018, during the 2019 presidential elections campaigning period, Fayulu was accused of "inciting tribal hatred, massacres of Balubas, and looting" by a member of the Luba community, the ethnic group of Tshisekedi. The public prosecutor ordered an investigation. Fayulu appeared before the judicial police, facing up to five years of imprisonment. However, his was postponed hearing with no rescheduled date.

Finally, in December 2023, Martin Fayulu organized a political meeting in the town of Kikwit, in the Kwilu province, which evolved into a stone-throwing incident. According to media reports, participants were attacked with rocks by political opponents from Tshisekedi’s Union Sacrée political party. Several people were injured during the clashes and some activists were arrested.

Anti-Rwanda rhetoric

Another aspect that has caused doubts about Tshisekedi’s commitment to peace in the DRC, is his rhetoric against neighboring Rwanda. At his final campaign meeting in Kinshasa on 19 December, Tshisekedi promised, if re-elected, to declare war on Rwanda and march to Kigali. Informal observations by Crisis Group staff, journalists and Congolese analysts indicate that this nationalist positioning likely helped him win re-election. However, these provocations could cause regional instability.

Electoral irregularities will cast doubt on many voters despite the clear mandate. Over a million eligible voters were unable to register beforehand due to insecurity and organizational flaws. Many of the printed voted cards issued earlier in the year were unreadable, despite being a legal requirement for citizens to cast a ballot. Participation, officially at 43 per cent, was the lowest in the country’s democratic history. Finally, results were cancelled in two constituencies and 82 candidates were disqualified from national and local races for alleged fraud.

Evidencity conducts in-house research on TruthSeeker , researching companies and individuals of global economic interest.

Part two: The corporation behind Ecuador's new president

Mon, 11 Dec 2023 15:54:17 GMT

Daniel Noboa, the new president of Ecuador, whose profile was outlined in our previous article, is destined to inherit a controversial legacy from his father - a vast corporation with regulatory hurdles, legal battles and allegations of modern slavery.

Grupo Noboa is an expansive conglomerate with over 150 subsidiaries - a complex network which leads to offshore companies in tax havens such as Panama and the Bahamas. Exportadora Bananera Noboa S.A. – one of the major banana exporters in the world – stands in the heart of Ecuador’s business landscape. Established in 1946, the company’s story is one of intricate business dealings, political influence, and legal entanglements.

At the helm of this corporate empire is the father of Ecuador’s new president, Álvaro Noboa. Known for his vocal criticism of President Rafael Correa's government, Noboa senior faced scrutiny during his tenure as an assembly member in the Constituent Assembly of Ecuador. His removal from office stemmed from a failure to disclose personal wealth details, a requirement for his eligibility. In addition to the tax evasion accusations, Álvaro Noboa has been sued multiple times over civil disputes, including sexual harassment allegations filed in New York, US.

Noboa dept cases

In April 2009, the Internal Revenue Service of Ecuador (IRS) indicated that Grupo Noboa had a tax debt of USD 49,206,895.28 for the fiscal year of 2005. The company filed a complaint to clarify the calculation. The IRS refused to consider the complaint. Certain media reported that the tax debt was up to USD 100 million. As of November 2023, the total value owed to the IRS was USD 88,766,075.43. It is unclear how much of the debt has the company paid back.

In August 2020, another debt case plagued Group Noboa. Exportadora Bananera Noboa S.A. found itself entangled in a labour lawsuit initiated by Levis Disney Rivas Cevallos. The dispute concerned an outstanding debt of USD 9,363.95. The court ruled in favour of Cevallos, determining the debt to be valid. Despite the court's decision, Exportadora Bananera Noboa failed to fulfil its financial obligation or provide assets for seizure. The failure to comply led the court to sufficient cause for insolvency.

Exportadora Bananera Noboa faced additional challenges from the Ministry of Labor, culminating in a substantial settlement of USD 3,944,420.93 with former employees of Hacienda La Clementina. This payment followed a regulatory effort to suspend the scheduled auction of Grupo Noboa's assets, emphasizing justice and workers' rights recognition. Furthermore, Xavier San Martín Cuenca, Undersecretary of Agriculture of the Southern Coast and Galapagos fined the company USD 210,927 for a non-payment related to the purchase of bananas.

Accusations of unlawful labour practices

In addition, the group has been accused of unlawful labour practices throughout the years. The accusations have not led to an official investigation, but the local communities have reported incidents of child slavery and debt bondage.

For example, the YouTube video of a news report from 2023 depicts the owner of a banana plantation, who took out a loan with Banco del Litoral, a Grupo Noboa bank. The loan was to be repaid in banana production, valued at 340 cents per box. However, the group paid only 90 cents per box, rendering the loan much more expensive than agreed. In 2019, the group flattened the plantation and physically attacked the debtors Carmen Peláez Luna and Luis Anchundia.

Also, the Noboa Group was named as a child slavery perpetrator in an NGO investigation carried out in 2002. More specifically, the Human Rights Watch investigation into working conditions on Ecuadorian banana plantations, including those supplying Exportadora Bananera Noboa, revealed that workers, including children, were paid below the legal minimum wage. On average, children were paid less than half the legal minimum wage. The report also detailed child workers' exposure to toxic chemicals. The company denied responsibility for the working conditions stating it did not own the plantations but was rather buying and exporting the produce.

President Noboa’s destiny is to inherit a corporation with issues of transparency and corporate responsibility as well as at least some indirect exposure to modern slavery practices. The above facts might not have affected his presidential bid, but will certainly influence his role and presence in the Ecuadorian political scene.

Evidencity conducts in-house research on TruthSeeker , researching companies and individuals of global economic interest.

Part one: The corporation behind Ecuador's new president

Sat, 11 Nov 2023 15:58:24 GMT

In Ecuador, a new political force has emerged in the form of president-elect Daniel Noboa. Although a recent entry to the country’s political arena, Noboa is no stranger to power or politics.

Behind the man poised to lead the nation until 2025 stands an empire of corporations linked to the country’s largest banana exporter - Bonita - led by his father and founded by his grandfather, as well as a dynasty of influential family members and their spouses.

Born in 1987 in Miami as Daniel Roy-Gilchrist Noboa Azín, Ecuador’s new president is a dual US-Ecuadorian citizen.

His billionaire father, Noboa Corporation CEO Álvaro Noboa, controls over one hundred companies in real estate, shipping, automotive, and agriculture. Noboa Sr. has run for president of Ecuador five times without success. His mother, Anabella Azín, is also part of Ecuador’s political elite. A medical doctor and surgeon, she was also a congresswoman with the National Action Party . Daniel Noboa has two siblings, Juan Sebastián, 33, and Santiago, 22. His cousin, Carla Noboa Azín, was also raised by his family following the death of her mother. She is married to one of the richest men in Barbados, Giles Carmichael.

Daniel Noboa's background

Young Daniel Noboa was educated in reputable American universities. He studied business administration at New York University (2011) and Northwestern University (2019). Moreover, he is an alumnus of Harvard’s Kennedy School, obtaining a second master’s in public administration in 2020. He graduated with his third master’s in political communication and strategic governance in 2022 from George Washington University.

His impressive accolades were accompanied by entrepreneurial ventures. At age 18, he founded DNA Entertainment Group, an events and concert promotions company which expanded to Spain and Panama and into other industries such as food, beverages, and hospitality. His business makes 5 million USD in sales annually. From 2010 to 2018, Daniel Noboa became Commercial Director at the Noboa Corporation, overseeing maritime logistics.

In August 2023, Daniel Noboa told journalists that his net worth was 2 million USD. According to the latest sworn statement filed by the subject to the Comptroller's Office in 2023, his assets total 1,502,889 USD, and his net worth is 643,848 USD. According to official records from the Superintendency of Companies, Noboa owns shares in Pesquera Marintan, Predios Cutiriba, Fantastisol, Cordenesa, Pozuelo de oro (Pozoro), Logic Choice (Logch), and Nobexport. Furthermore, Noboa is set to inherit a holding of the Noboa family worth 300 USD million.

Ecuador’s new president resides in Olón, Santa Elena. A father of two, he has been married twice. His second wife is Ángela Lavinia Valbonesi, a popular Ecuadorian social media influencer. She is expecting his third child.

Noboa's controversies

Daniel Nobao's personal life has not always been one of bliss. His ex-wife, Gabriela Goldbaum Smith, with whom he shares a daughter, Luisa, has publicly accused him of cheating on her and mistreating his daughter. Noboa sued Goldbaum for 20 million USD because of her allegations.

Daniel Noboa has faced other controversies related to political choices and non-transparent business activities.

In 2022, Ecuador’s Congress opened an investigation into a trip of the country’s Delegation of Ecuadorian Legislators to Russia financed entirely by Daniel Noboa.

Over 20 NGOs have accused the new president of tax evasion between 2009 and 2013. In addition, a recent investigation by the Brazilian daily Folha de Sao Paulo revealed that Noboa was the direct beneficiary of at least three off-shore companies registered in Panama - a notorious tax haven – which he inherited from his father. Supported by data from the Ecuadorian government, the article states that the firms had transferred hundreds of thousands of US dollars to Ecuadorian companies in the Noboa Group.

Had it been proven true, Daniel Noboa would have been disqualified from the presidential race for violating the electoral law. In a 2017 referendum, the Ecuadorian people voted in favour of a law prohibiting elected officials and public servants from holding assets or capital in tax havens. Despite the allegations, the electoral authorities opened no investigation.

This article’s second part will examine the vast Noboa Corporation and its labour practices, which link back to Ecuador’s first man.

Evidencity conducts in-house research on TruthSeeker , researching companies and individuals of global economic interest.

Cambodia's new Hun clan heir

Sat, 07 Oct 2023 18:22:49 GMT

In recent years, Cambodia has grappled with significant concerns surrounding its political landscape, particularly in the areas of press freedom, civil society, and human rights. Independent media outlets faced challenges, and there were allegations of harassment and intimidation of journalists, activists, and opposition figures. Human rights organizations and the United Nations expressed concerns about the state of human rights in Cambodia, including issues related to political repression, freedom of expression, and the treatment of activists and political prisoners.

Cambodia's political situation also had international implications. The European Union and the United States took actions such as imposing sanctions and trade restrictions in response to the crackdown on democracy and human rights.

The Cambodian People's Party

The Cambodian People's Party (CPP), until recently led by Hun Sen, has maintained a firm grip on power, having won multiple elections over the years. The 2018 general election saw the CPP win all 125 seats in the National Assembly after the main opposition party, the Cambodia National Rescue Party (CNRP), was dissolved by the government in 2017. The dissolution of the CNRP and the arrest of its leader, Kem Sokha, the same year were significant events that further consolidated the CPP's power. This move was widely criticized by the international community as a setback for democracy in Cambodia.

Hun Sen is known for his authoritarian style of governance and has been criticized for cracking down on political opposition and limiting political freedoms in Cambodia. Born on August 5, 1952, in Kampong Cham Province, he joined the Khmer Rouge insurgency in the 1970s and later defected to the Vietnamese-backed forces, which eventually led to the overthrow of the Khmer Rouge regime. Hun Sen is married to Bun Rany who is the President of the Cambodian Red Cross and is involved in various charitable and humanitarian activities, which are however said to be aligned with CPP’s political positions.

Controversies and accusations follow Cambodia's new prime minister, Hun Manet.

The Hun family

Hun Manet is Hun Sen's eldest son and was considered the natural heir to his father’s position. He assumed office as the prime minister of Cambodia on August 22, 2023, after his father decided to step down after a victorious general election. Hun Manet was born on October 20, 1977. His educational background includes attending Preah Sisovath High School, a renowned institution historically associated with the country's elite. In 1995, he pursued his higher education in the United States, enrolling at the United States Military Academy at West Point and successfully graduating on May 29, 1999.

In 2002, Hun Manet furthered his studies by completing a Master of Arts in Economics at New York University, USA. In 2008, he earned his PhD in Economics from the University of Bristol in the United Kingdom. Following his academic pursuits, he returned to Cambodia and continued to serve in the Royal Cambodian Armed Forces until 2018 when he was promoted to the rank of General, assuming the role of Commander of the Army within the RCAF. Hun Manet began his political career in 2000 when the Standing Committee of the Central Committee of CPP promoted him from the post of Vice President of the Central Youth Wing of the CPP.

Hun Manet is married to Pich Chanmony, the daughter of Pich Sophoan, a former Secretary of State at the Ministry of Labour. She reportedly has links to eight companies, including the chairmanship of Legend Cinema and G Gear, which has the exclusive licence to sell LG products. They share three children. Hun Manet has four siblings – two sisters, Hun Mana and Hun Maly, and two brothers, Hun Manith and Hun Many – all involved in influential business, political and military positions and high-profile marriages to individuals holding power. His paternal aunt, cousins and other in-laws boast similarly impressive business portfolios, including law firms and casinos.

The Hun family has been reported to have vast holdings across 18 sectors. More specifically, 27 relatives of Hun Manet are linked to companies whose official share capital value is more than $200 million . The family is involved in 17 trading companies, 10 financial institutions, 10 enterprises in the hospitality and entertainment sectors, eight interests in tourism and retail, and seven in construction and real estate. Furthermore, their holdings extend to energy, mining, agriculture, and forestry, with six companies in each sector. However, it remains uncertain how much of this wealth is specifically attributed to Hun Manet. Remarkably, at the age of 23, Hun Manet was already a co-owner of a four-bedroom house in Long Island, New York, valued at USD 500,000, which he shared with his siblings.

In the media industry, particularly led by the new premier's sister Hun Mana, who oversees Bayon Radio and TV, there are connections to five companies. The extensive influence of the Hun family across both Cambodia's public and private sectors effectively granted the now-former prime minister Hun Sen nearly absolute control over the nation. Multinational giants Apple, Canon, LG Electronics, Lenovo-IBM Nokia, Electrolux and Pioneer distribute via companies linked to the family. It would be difficult to imagine Hun Manet will not leverage, continue and expand if possible the power tradition of the Hun clan

Controversy and accusations

The new prime minister of Cambodia has already some controversy under his belt, raising questions about how different his leadership style will be from that of his father. Namely, in 2017, Hun Manet, his father, and other prominent CPP members were accused, after a hacker leaked confidential emails, of carrying out a “cyber war” on CNRP by spreading propaganda on social media against its leaders.

His experience in clashing with political opponents does not end there. Meach Sovannara, spokesperson of the CNPR – a Cambodian and US citizenship holder - and 10 other opposition figures from his party were imprisoned on insurrection charges after a demonstration in July 2014 that resulted in violent clashes between protesters and security forces. In 2016, Sovannara’s attorney, Morton Sklar filed a lawsuit in the US District Court in Los Angeles against Hun Manet and other members of the Hun clan for emotional and financial damage to his client’s family. Hun Manet was said to have hired an attorney to fight the lawsuit. The Cambodian government said that US law does not affect Cambodia which is a sovereign state.

The new prime minister of Cambodia was accused in August 2022 of being allegedly involved in a controversial land deal with a real estate company, Leng Navatra, for the deforestation of the Phnom Tamao forest . Alejandro Gonzalez-Davidson and other environmental activists, mainly members of the NGO “Mother Nature Cambodia”, claimed that the real estate company had acted on behalf of Hun Manet. The government agreed in April 2022 to sell more than 500 hectares of the protected forest to Leng Navatra and two other companies close to the Hun family. The real estate company cleared 400 hectares of trees within one week despite widespread protests. Hun Manet denied he was involved in the project, although he admitted he knew the owner of Leng Navatra from his CPP youth network days. Hun Sen, in a rare move, ended the project after multiple appeals from environmental groups and citizens.

In August 2023, one day after officially assuming office, a female garment worker named Phi Ouk was arrested in Phnom Penh for allegedly insulting Hun Manet on TikTok. The woman published a video stating that the new premier of Cambodia was her “son” and that he was responsible for many wrongdoings for which he should be killed unless he changed his behaviour. Authorities claimed that the woman’s sayings insulted the reputation and dignity of Hun Manet and undermined social security. If found guilty, Phi Ouk could face up to three years in prison. Earlier this year, Hun Manet had also ordered the arrest of two individuals who allegedly took photos with him and used his name to illegally acquire land by posing as his assistants.

The ascension of Hun Manet to the position of Prime Minister brings with it questions about the future direction of the country, given his family's extensive influence and the controversies that have surrounded him in the past. The international community will closely monitor whether Cambodia can move towards a different direction.

Evidencity conducts in-house research on TruthSeeker , researching companies and individuals of global economic interest.

Haiti's financial inclusion journey

Fri, 15 Sep 2023 18:09:13 GMT

Financial inclusion in Haiti has historically been limited, with a significant portion of the population lacking access to basic financial services. The devastating earthquake that struck Haiti in January 2010 further exacerbated this issue, causing a profound negative impact on the country's financial landscape.

Destruction of infrastructure was widespread, including banks, ATMs, and financial institutions. More than a third of bank branches disappeared overnight.

This disruption created substantial barriers for people to access their bank accounts and carry out financial transactions. Many individuals also lost critical identification documents and financial records, making it challenging to prove their identities and regain access to financial services.

Faced with the formal banking sector's collapse, many turned to informal financial mechanisms like rotating savings and credit associations (ROSCAs) or sought loans from informal lenders, often bearing higher risks and costs.

Microfinance in Haiti

According to recent data, 58.5% of Haiti’s population is living below poverty level. The annual per capita income amounts to only USD 1,819. Financial exclusion impacts 67% of Haitians. Even before the earthquake, only 16% of the population had access to bank accounts.

Furthermore, small and medium-sized enterprises (SMEs), which account for 80% of employment in Haiti, struggled to secure resources for capital improvements due to lenders' reluctance to finance businesses with limited credit histories and collateral.

While some microfinance institutions in Haiti were also affected by the earthquake, they played a pivotal role in providing financial support to vulnerable populations during the recovery period. Various organizations and institutions stepped in to address these financial inclusion challenges.

Microfinance institutions such as Fonkoze and SOGESOL aimed to provide microloans and financial services to low-income individuals and small entrepreneurs. Non-governmental organizations like CARE and Oxfam collaborated with local partners to implement financial inclusion programs, including savings groups and financial education.

The World Bank Group, through the International Development Association and International Finance Corporation, administered trust fund grants to support the project, including grants from the Spanish Fund for Latin America (approximately USD150,000), the Netherlands-IFC Partnership Program (USD 18,000), and USAID (approximately USD 240,000).

Even before the earthquake in 2010, only 16% of Haiti's population had access to bank accounts.

MonCash: FinTech in Haiti

The indisputable winner of FinTech innovation efforts in Haiti is MonCash, previously known as Tcho Tcho Mobile. The company emerged in 2011, as a partnership between financial services companies YellowPepper, Digicel, and Scotiabank, supported by a fund from USAID and the Bill and Melinda Gates Foundation.

This innovative solution required nothing more than an SMS-capable cell phone, making it accessible to the majority of Haitian households. Users could sign up easily, accessing a digital wallet managed by local Tcho Tcho agents located across the country. These mobile wallets effectively functioned as digital bank accounts, allowing Haitians to make deposits, transfer funds, pay bills, and receive government aid or NGO grants through simple text messages.

In 2015, Digicel rebranded its service as "Mon Cash," expanding its reach and vendor network, aiming to address the issue of financial exclusion in Haiti.

MonCash’s success lies on its readiness to deploy agents to educate people in Port-au-Prince and other cities about electronic currency, distributing educational materials written in the local Creole language. While French is an official language, an overwhelming number of Haitians are monolingual Haitian Creole speakers.

Fast forward to 2023, MonCash evolved further by adopting a new, user-friendly platform designed to cater to global mobile wallet services while ensuring security and expanding its reach.

Local innovators

However, the domination of MonCash, which was backed by big international players, affected initiatives from local actors.

Such is the story of Pascale Elie, a Haitian professional with a background in Actuarial Mathematics and Economics, who embarked on a mission to create a fintech company called HaitiPay in the aftermath of the earthquake.

Her innovative product, Lajan Cash, allowed anyone with a cell phone to send and receive money, make purchases, and receive funds from abroad via a simple shortcode, even without an internet connection. HaitiPay focused on ensuring the traceability of payments and their availability to all financial institutions in the country.

However, HaitiPay faced competition from telecom giants and legal obstacles . According to Haitian law, electronic money services had to be backed by a banking partner, forcing HaitiPay to navigate complex negotiations with competitors. After two years of perseverance, HaitiPay finally received the partner's approval.

In 2014, Elie received a USD 500,000 grant from USAID to expand her fintech activities. The growing fintech sector in Haiti has seen the emergence of new giants valued at $10 billion, revolutionizing services from microcredit to digital banking.

One of HaitiPay's unique strategies is tapping into the diaspora of 1.2 million Haitians living in Florida and New York. This often overlooked market segment generates nearly USD 3 billion in remittances, accounting for nearly a third of the country's GDP.

In this endeavor, HaitiPay is up against foreign giants like Western Union, which has traditionally dominated the Caribbean money transfer market.

While challenges persist, these initiatives offer hope and tangible progress towards ensuring that all Haitians have access to the financial services they need to improve their lives and their nation's economic prospects.

Evidencity conducts in-house research on TruthSeeker , researching companies and individuals of global economic interest.

Nickel industry expansion in Indonesia

Fri, 01 Sep 2023 17:55:31 GMT

The increasing need for electric vehicle batteries in the US and Europe has spiked nickel demand internationally. Evidencity previously tried to shed light on China’s influence in the EV sector and battery production and explain the involvement of international car manufacturers.

As a key player in the battery supply chain, the nickel industry has attracted Chinese foreign direct investment through the Belt and Road Initiative to secure supply, impacting populations and habitats in nickel-rich countries.

Namely, Indonesia has seen a boom in industrial development related to nickel refining activities. From 2020 to 2022, the country’s nickel production doubled up to 1.6 million tonnes – representing at least 48% of global supply.

Business deals worth more than USD 15 billion have been signed with the likes of Tesla, Hyundai Motor, and other international companies.

Indonesian nickel industry expansion

Indonesian President Joko Widodo, also known as Jokowi, is the evident champion behind the Indonesian nickel industry’s expansion. In 2022, he issued a regulation encouraging the growth of “National Strategic Industries” to “increase the added value of natural resources."

Under his memorandum, new coal plants can be categorized as “national strategic projects” when they contribute to job creation and national economic growth. This is despite the country’s commitment to transitioning away from coal in powering its grid.

At the end of 2022, Indonesia had 13,000 MW of captive coal power projects under construction, according to the Global Energy Monitor (GEM).

From 2020 to 2022, Indonesia’s nickel production represented at least 48% of global supply.

Lives lost in the Morowali Industrial Park

The Morowali regency in Sulawesi Island is the area most encroached by nickel-related projects, which are linked mainly with Chinese interests.

More specifically, Morowali houses the Indonesia Morowali Industrial Park - a vast USD 10 billion-worth joint venture between the Indonesian government and the Chinese Tsingshan Holding Group.

In its 4,000 hectares, 18 companies operate, employing more than 70,000 Indonesian and 11,000 foreign workers.

However, the nickel industry boom in Indonesia has a dark side of environmental destruction, land grabbing and precarious working conditions.

Between 2015 and 2022, at least 47 workers lost their lives in nickel-mining sites and 76 more were injured. In addition, 10 Chinese workers allegedly committed suicide. Most of these incidents took place at the Morowali Industrial Park.

Evidencity investigates PT Gunbuster Nickel Industry

Evidencity examined one of the Chinese companies operating in the Morowali Industrial Park that has been linked with deadly incidents, unlawful practices, and environmental destruction.

PT Gunbuster Nickel Industry (GNI) was incorporated in Jakarta, Indonesia, in 2019 under registration number 0215151665 and a capital of USD 2.7 billion. Its smelter has an annual output capacity of 1.8 million tonnes. GNI is not publicly traded.

The firm is owned by the Chinese company Jiangsu Delong Nickel Industry Co. Ltd , founded by Dai Guofang – a Chinese entrepreneur who was reportedly jailed in Jiangsu in 2004 on tax evasion charges and illegal land procurement in his former capacity as chief executive of Tieben Steel.

GNI’s CEO is Chinese national Tony Zhou Yuan who also serves as a director of Jiangsu Delong subsidiaries PT Virtue Dragon Nickel Industry (VDNI) and PT Obsidian Stainless Steel (OSS).

Mr Yuan is said to have a close relationship with Ali Mazi, the governor of Southeast Sulawesi. Mr Mazi is known to be on the supervisory board of Tony Zhou Yuan’s Foundation, the Andrew & Tony Foundation.

Interestingly, Mr Yuan’s foundation partner, Mingdong “Andrew” Zhu, is Dai Guofang’s son-in-law and had been entrusted with setting up PT Virtue Dragon Nickel Industry in Indonesia.

GNI, which receives Indonesian government support under the national strategic project list, gained notoriety in January 2023 after a deadly riot occurred at its Morowali plant, leaving three dead, several injured, and 71 arrested.

The workers, protesting against poor working conditions and payment delays, clashed with security officers and attempted to set equipment on fire.

Multiple workers have died at the GNI plant throughout its operation. In June 2023, a deadly fire broke out, killing one and injuring six.

In December 2022, it was reported that Nirwana Selle, a young crane operator known in Indonesia through her TikTok account, and another employee had burned to death when the smelter furnace caught fire.

Local community

Moreover, the local community has been vocal about GNI’s unlawful practices in Morowali since 2018 , when the plant construction began. Locals reported that the Lampi River was dammed and blocked by the company without previous warning, consultation, or land acquisition process, causing two incidents of serious flooding. According to residents, GNI grabbed 300 hectares of land.

Locals have also pointed out that GNI’s operations pollute the Tokonanaka Bay , where large ships and coal barges dump leftovers and dust into the sea.

On August 23, 2021, a resident of Bunta Village sued GNI for illegally occupying local people’s land to access a mining haul road . The resident won the lawsuit filed at the Poso District Court. GNI had to pay land owners INR 55 thousand (USD3,612.88) as compensation.

GNI has denied the allegations, saying all its activities and operations comply with prevailing laws.

Evidencity conducts in-house research on TruthSeeker , researching companies and individuals of global economic interest.

EV batteries and China

Fri, 18 Aug 2023 14:07:01 GMT

In July 2023, US lawmakers sought to review a licensing deal between Ford Motor and Chinese battery supplier Contemporary Amperex Technology Co., Limited (CATL).

The House Ways and Means Committee demanded a copy of the licensing agreement and any communication between the two companies as well as between Ford and the Biden administration regarding potential tax credits. Also, the letter raised doubts about CATL's potential links with forced labor practices and the need to reduce dependency on China.

Ford and CATL

The deal between Ford and CATL foresees the production of battery cells in a planned USD3.5 billion plant in Michigan which is expected to open in 2026 and employ about 2,500 people. The factory will produce new lithium iron phosphate batteries (LFP).

CATL was incorporated on December 16, 2011, in Ningde, Fujian Province, China. Its shareholders include Xiamen Ruiting Investment Co., Ltd. (23.32%), Shilin Wang (10.60%), and Hong Kong Securities Clearing Company Limited (9.31%).

The company’s leadership is connected with the Chinese Communist Party. CATL’s chairman, Yuqun Zeng, is a 13th CPPCC National Committee member. Shareholder Shilin Wang is the Counsellor of the Fujian Provincial People’s Government.

CATL produces around a third of EV batteries supplied to the global market (37%) and is the biggest lithium battery manufacturer.

CATL's leadership in the EV battery sector

CATL's leadership in the EV battery sector has raised concern among US officials, but also at home, as the company keeps expanding and deepening its ties with US manufacturers.

The reason lies with the increased competition between Washington and Beijing for dominance in strategic industries as well as with American fears about national security.

CATL produces around a third of EV batteries supplied to the global market (37%) and is the biggest lithium battery manufacturer.

The majority of international car manufacturers have crossed business paths with CATL in the last decade. For example, Tesla, BMW and Mercedes all have agreements with the company. In addition, Honda Motor Co. struck a deal with CATL, hoping to stabilize its battery supply.

Moreover, the company has already established operations in Europe. Namely, it maintains a plant in Munich, Germany and, in the summer of 2022, it launched the opening of a new factory in Hungary in collaboration with Mercedes-Benz.

CATL's legal troubles

According to Chinese court databases, CATL has been involved in at least 10 civil litigation cases which mostly concern contract, labor, and patent infringement disputes.

Furthermore, CATL's supply chain is heavily exposed to modern slavery practices by sourcing raw materials necessary for the construction of EV batteries.

More specifically, the firm has connections with mining companies operating in the notorious Xinjiang region, which has received backlash for human rights abuses against the Muslim Uyghur majority. Uyghurs are forced to work in different industries all over the region, under inhumane conditions.

For example, CATL was linked to lithium mining company, Zhite New Materials, which paid USD885 million for mining rights in Xijiang, but later abandoned the purchase.

Indirect exposure to human rights violations

The EV batteries CATL produces are a staple in the car manufacturing sector. Therefore, international car manufacturers striking deals with CATL could be indirectly exposed to human rights violations.

At the beginning of 2022, it was rumored that CATL could be included under the US sanctions list which also targets Chinese subjects among others. However, the company denied this in an official statement.

Last year, CATL announced it had joined the United Nations Global Compact, an initiative that sees CEOs make non-binding commitments for sustainability and social responsibility, including human and labor rights.

Evidencity conducts in-house research on TruthSeeker , researching companies and individuals of global economic interest.

Child labor in Ecuador

Thu, 03 Aug 2023 13:55:46 GMT

Modern slavery, including child labor and human trafficking, is a significant issue in Latin America. According to the International Labour Organization (ILO), more than 8 million children between the ages of 5 and 17 are engaged in child labor in the region. Children work on plantations, in mines, or in factories without proper safety measures and are unable to escape the cycle of modern slavery due to a lack of legal protection, education, and opportunities to break free. Because of their often isolated and marginalized status, indigenous populations and marginalized communities are also vulnerable to forced labor.

In Ecuador, there are over 270,000 child laborers between 5 and 14 years old, according to Ecuador’s Institute of Statistics and Census (INEC). The figure represents 7.1% of Ecuador’s child population.

Furukawa Plantaciones C.A.

For the first time in the country’s history, a company is facing criminal proceedings for the trafficking of adult and child workers. Furukawa Plantaciones C.A. was incorporated in Santo Domingo de los Tsachila in 1963, but belongs to Japanese interests – more specifically, Tokyo TFPC Marketing Co. Ltd. During its 60 years of operation in Ecuador, Furukawa has amassed assets worth 18 million dollars for its abaca fiber production. Abaca fiber is widely used in tea bags, filters for machines, banknotes, and high-quality paper, in the automotive and textile industry, as well as in the manufacturing of surgical masks.

Furukawa has been accused of subjugating entire families and their children by forcing them to live and work in its plantations under inhumane conditions with little pay, no contractual agreements and no freedom to change their situation.

Furukawa exposed

In 2018, the company attracted attention when the office of the Ecuadorian Ombudsman published a report exposing Furukawa’s modern slavery practices. The report unveiled that 1,244 workers, among them children and adolescents, lived in dehumanizing housing conditions with no labor rights. The publication led to investigations from multiple Ecuadorian ministries. The Ministry of Labor confirmed child labor practices.

Furukawa was found to violate child labor legislation and fined repeatedly since at least 2019, with children as young as 8 years old working at the plantations. Additionally, testimonies revealed that employees' children were born into modern-slavery conditions. Ecuadorian authorities enforced fines, but according to the ruling, the company took no measures to prevent child labor.

Tshisekedi was re-elected with more than 70% of the vote, amid questions about the validity of the results and logistical problems during the electoral process.

Corruption allegations and reports

Violations found, little has changed

In 2021, the company was ordered by a Santo Domingo court to pay a one-time fine of USD 42.880, close the affected plantation for 90 days, and transfer 5 hectares of land to each victim for violations of Ecuadorian anti-slavery legislation. The company contested and appealed all the rulings. No indication was found that the company established anti-slavery measures.

Simultaneously, the Prosecutor's Office started investigating Furukawa for more than three years. In January 2023, 106 workers and the public prosecutor sued the firm for trafficking with the purpose of labor exploitation and forced labor in a landmark criminal litigation where five managers of the company stand accused along with the legal entity itself. Namely, Marcelo Almeida – linked to Furukawa for two decades – is considered a key perpetrator. The other individuals accused are Iván Segarra, former field administrator, Adrián Herrera, manager at Furukawa since 2019, Hugo Chalen, commercial manager since 2001, and Paúl Bolaños, administrative head from 2005 to 2006 and head of human resources from 2018.

Furukawa’s manager Adrián Herrera admitted in a 2022 interview that plantation workers were given loans to stop protesting against the company, which they then had to repay with labor under duress.

The criminal litigation against the company is currently ongoing.

Evidencity conducts in-house research on TruthSeeker , researching companies and individuals of global economic interest.

Environmental violations in Indonesia

Fri, 21 Jul 2023 02:19:47 GMT

The palm oil and timber industries are often entangled in environmental violation cases. Due to the widespread use of palm oil and timber in global supply chains, companies can be directly or indirectly exposed to unlawful and environmentally hostile practices.

Environmental violations can infiltrate the supply chain through various stages of production, sourcing, and distribution. For example, companies may source raw materials from suppliers known for engaging in illegal logging, deforestation, or polluting practices. In addition, the lack of supply chain transparency can obscure this information, with environmental violations going in many cases unnoticed. Extensive supply chains involve multiple layers of suppliers, making it challenging for companies to monitor each one of them thoroughly. Finally, the demand for high-volume production at low costs often pushes suppliers to take shortcuts and show poor compliance with environmental regulations.

In some regions, weak or ineffective environmental regulations and enforcement can allow companies to get away with violating environmental standards without significant consequences. Namely, Indonesia has been criticized for having in place insufficient punishing measures, specifically low penalties, which fail to deter companies from committing environmental violations.

Korindo Group PT

A company that has caused controversy is South Korean-founded, Indonesia-based conglomerate Korindo Group PT. Korindo is a producer, processor, and manufacturer of various products, including wind towers, battery separators, specialized container vehicles, and cast iron products. It has plantations of palm oil and timber.

Korindo controls more land in the Papua region than any other conglomerate and is said to have cleared nearly 60,000 hectares of forests inside its government-granted concessions — an area the size of Chicago. According to reports from investigative journalists, the company used circular shareholdings during its rapid expansion in Papua and North Maluku provinces. It would obtain permits to several plots of land, directly from the government, through three companies it set up in Indonesia. All three were owned by a maze of other companies registered in Indonesia, Singapore and the British Virgin Islands.

Korindo controls is said to have cleared nearly 60,000 hectares of forests inside its

government-granted concessions.

Community farms and forests destroyed

Reportedly, the Korindo conglomerate, and its financiers, which include Bank Negara Indonesia (BNI), have obtained permits for logging and palm oil operations in North Maluku in violation of Indonesian laws through subsidiary PT Gelora Mandiri Membangun. This has led to the destruction of community farms and forests without the consent of landowners. In many cases, Korindo’s land-grabbing practices were not accompanied by fair compensation.

Furthermore, local communities have reported incidents of harassment and mistreatment from policemen who “work” for the conglomerate. These incidents include forced evictions, intimidation, and violent tactics to suppress opposition to the company's operations.

The Responsible Cobalt Initiative

After two years of investigation, the International Board of Directors of the Forest Stewardship Council (FSC) – a global certification body on responsible forest management – exposed Korindo’s massive-scale deforestation in Papua and North Maluku , after NGO Mighty Earth filed a complaint. Also, Korindo had been using FSC’s eco-forestry label to greenwash its practices. The investigation found that the company had been deliberately setting the forests on fire in violation of the FSC’s rules. Korindo was also found responsible for the destruction of critical wildlife habitats and the violation of the local population’s human rights. According to BBC, the company sent threats to the FSC in 2018. As a result, the final report was never published officially. Unsurprisingly, the company has received a score of 38% on the Forest 500 index based on its poor commitment strength, reporting and implementation, and social considerations.

Consequently, companies that use palm oil sourced from Korindo could be indirectly supporting unsustainable practices. The company is known to sell its timber, plywood, pulpwood, biomass, and newsprint to Asia Pulp & Paper, APRIL, Sumitomo Forestry, Oji Corporation, and News Corps Australia.

Many consumer goods companies have faced pressure from consumers and activists to address their supply chains' environmental and social impacts, and this includes evaluating their connections to companies like Korindo.

Evidencity conducts in-house research on TruthSeeker , researching companies and individuals of global economic interest.

Financial inclusion in Egypt

Thu, 06 Jul 2023 15:14:14 GMT

Financial inclusion is crucial for sustainable economic growth and poverty reduction. When people have access to financial services, they can save money, make payments, access credit for business or personal needs, manage risk through insurance, and participate in the formal economy.

Financial inclusion also promotes entrepreneurship, job creation, and investment opportunities. Financial exclusion is affecting many societies globally, creating barriers for individuals, and limiting their prospects and quality of life.

Egypt is one of the many economies in the African continent that suffer from widespread financial exclusion . Many individuals in Egypt, particularly those in rural areas, have limited physical access to traditional banking services. The lack of bank branches and ATMs in remote areas makes it difficult for people to open accounts, make transactions, or access other financial services.

In addition, Egypt has a significant informal economy, where a large portion of economic activity operates outside the formal banking system. People engaged in informal sectors may rely on cash transactions and informal financial mechanisms, leading to their exclusion from formal financial services. Finally, in some cases, individuals may lack the necessary identification documents or documentation required to open bank accounts or access financial services. This can be particularly challenging for marginalized groups or those without proper legal identification.

FinTech is offering answers to these problems through tailored financial products and services to meet the needs of underserved populations.

Khazna advancing financial inclusion

Technology, particularly mobile phones and digital platforms, play a significant role in advancing financial inclusion. Mobile banking and digital payment systems have expanded access to financial services, especially in regions where physical infrastructure is limited. By leveraging technology, individuals can conduct financial transactions, access credit, and save money more conveniently and affordably.

In Egypt, Khazna — a company that provides affordable general purpose credit products through a mobile app and secure ATM card — has stepped up to fill in this space by creating an app accessible to anyone with a phone.

Khazna helps ensure that more Egyptians gain access to critical financial tools and safely manage their money while building financial security. The company is partnering with other businesses to reach workers across the country with essential financial services they otherwise would not be able to use. In May 2022, Khazna had reached a total investment of $47 million since its inception in 2020. As of April 2022, it had raised $38 million in a Series A equity and debt round.

Khazna’s app caters to 50% of Egyptians who are active smartphone users and lack access to formal financial services. Egypt is a ripe market for a fintech company because many citizens lack access to the banking system, but are mobile phone users. Khazna leveraged technology to help Egyptians manage their short and long-term financial needs.

In the three years of its existence, Khazna has achieved successful collaboration agreements. For example, the company signed a cooperation agreement with Egypt Post to serve pensioners through Khazna's mobile application, in collaboration with Prime Business Consulting which provided the project’s theoretical and methodological frameworks. Under the agreement, pensioners can receive three times the value of their pension through the Khazna App and repay it in installments.

Khazna also obtained the approval from the Central Bank of Egypt to launch the ‘Khazna Card’ in partnership with ADIB Egypt, one of the leading banks in digital transformation. Since 2020, the app directly enables users to order the Khazna prepaid card at no added costs.

In October 2022, Khazna signed an agreement with Careem Egypt, a ride-hailing technology platform in the Middle East, allowing Careem's Egypt customers to issue “Khazna Meeza” prepaid cards in cooperation with the Abu Dhabi Islamic Bank and to link these cards to Khazna’s App.

These collaborations allow the company to further penetrate Egyptian society and promote financial inclusion.

Evidencity conducts in-house research on TruthSeeker , researching companies and individuals of global economic interest.

Cobalt mining and modern slavery in Congo

Thu, 22 Jun 2023 14:55:07 GMT

As the world shifts towards cleaner and more sustainable energy solutions, cobalt has become a key component in supporting this transition. Cobalt is a critical raw material in the production of rechargeable lithium-ion batteries, which power electric vehicles (EVs), portable electronics, and energy storage systems. Furthermore, it is utilized in aerospace alloys, high-speed cutting tools, and industrial catalysts, making it indispensable in manufacturing processes across multiple sectors.

It is estimated that the Democratic Republic of the Congo (DRC) accounts for approximately 60% to 70% of the world's cobalt production, making it an important global supplier. Despite the resource abundance, the country has faced challenges in managing its mineral wealth and ensuring that the benefits reach the local population.

At the same time, cobalt mining in the DRC has been associated with concerns about modern slavery and human rights abuses. According to the 2023 Global Slavery Index, almost half a million people were living in conditions of modern slavery, including workers in the mining industry. The index grades the local government’s response with 36 points out of 100 - recognising recent efforts by authorities to address the issue but deeming them not far-reaching enough.

Severe incidents of abuse reported

Several reports and investigations have highlighted severe incidents of exploitation and abuse. Workers are exposed to hazardous working conditions, health risks, long hours, and low wages, while child labor is common. In some cases, workers have to mine without proper protective equipment and tools.

Artisanal and Small-Scale Mining (ASM), which takes place mostly in the eastern part of the country, is frequently associated with higher risks of labor rights violations and modern slavery due to informal and unregulated practices. In a 2016 report, Amnesty International highlighted the use of child labor and dangerous working conditions in artisanal cobalt mines.

However, some major mining and trading companies, including Glencore, have faced allegations and criticism regarding their cobalt sourcing practices and the potential links to modern slavery. In 2019, Amnesty International published a report accusing Glencore and other major mining companies of failing to adequately address child labor in the cobalt supply chain in the DRC. The report claimed that children as young as seven were working in dangerous conditions, with direct links to Glencore's supply chain.

DRC accounts for approximately 60% to 70% of the world's cobalt production, making it an important global supplier

Glencore operations in the DRC

Glencore is a multinational commodity trading and mining company incorporated in Switzerland. It is one of the world's largest suppliers of commodities such as metals, minerals, oil, and agricultural products. It operates across the entire commodity value chain, from mining and production to processing, refining, and marketing. In the DRC, Glencore has significant operations, particularly in the mining sector, extracting and exporting minerals such as copper and cobalt.

In recent years, Glencore has made efforts to increase transparency and strengthen its commitment to responsible sourcing through the Responsible Sourcing of Minerals program. This program aims to address social and environmental issues.

The presence of intermediaries and multiple layers in the cobalt supply chain can make it difficult to track labor rights abuses and modern slavery. Forced labor in cobalt mining can take different forms - such as debt bondage, coercion, threats, trafficking and smuggling. Miners may be trapped in a cycle of debt, often due to advances or loans provided by intermediaries or "bosses" who control their access to work and basic necessities. These debts can be exploitative, making it difficult for miners to escape their situation. Some individuals may be forced to work through coercion, threats, or physical violence. This can involve intimidation, exploitation of vulnerabilities, or the use of armed groups to control and exploit workers. Finally, the lack of transparency and regulation in the cobalt supply chain can enable human trafficking and smuggling, where individuals are transported across borders and subjected to forced labor in mining operations.

The Responsible Cobalt Initiative

These concerns have led to increased pressure on companies, governments, and international organizations to address the issue. Efforts are being made to improve supply chain transparency, strengthen responsible sourcing practices, and ensure the protection of human rights in the cobalt industry. Initiatives such as the Responsible Cobalt Initiative (RCI) and the Responsible Minerals Initiative (RMI) have been established to promote responsible sourcing and tackle human rights issues in the cobalt supply chain.

Evidencity conducts in-house research on TruthSeeker , researching companies and individuals of global economic interest.

Forced labor and the solar panel industry

Thu, 08 Jun 2023 14:37:57 GMT

Reports of forced labor against the Uyghur minority residing in China’s Xinjiang region have been emerging in international media raising concerns about the involvement of Western businesses in the perpetuation of human rights violations.

Over the past few years, the Chinese government has been accused of systematic persecution of the Uyghur population. Uyghurs have been subjected to mass surveillance, arbitrary detentions, cultural repression, and forced assimilation in an extensive and highly controversial "re-education" campaign.

Mounting evidence has indicated the involvement of Uyghur forced labor in various industries, including manufacturing, agriculture, and textiles. Several testimonies and leaked documents have exposed the existence of forced labor camps, euphemistically referred to as "re-education centers" or "vocational training centers," where Uyghurs are coerced into labor under exploitative conditions.

Western companies and the Uyghur workers

Western companies, including prominent global brands, have faced scrutiny and allegations of complicity in benefiting from the forced labor of Uyghur workers. Supply chains have become increasingly complex, making it difficult to trace the origins of raw materials and products. However, investigations by human rights organizations, investigative journalists, and think tanks have revealed instances of Western firms sourcing goods from factories and suppliers implicated in the use of forced Uyghur labor.

These allegations have implicated companies across various sectors, including fashion, technology, automotive, and retail. Some companies have been accused of directly sourcing from Xinjiang, while others have indirectly benefited from the forced labor by using suppliers implicated in such practices.

Companies operating in the renewable energy sector have faced scrutiny over their potential connections to the Xinjiang region, where a significant portion of the world's solar panel production takes place.

Raw materials in the solar panel industry

The solar panel industry, hailed as a beacon of sustainable energy, is no exception. Companies operating in the renewable energy sector have faced scrutiny over their potential connections to the Xinjiang region, where a significant portion of the world's solar panel production takes place. The production of solar panels requires minerals and metals such as silicon, aluminum, and copper. In some cases, the mining and extraction of these raw materials can involve forced labor. Workers may be subjected to dangerous working conditions, low wages, long hours, and restricted freedom of movement.

Once the raw materials are extracted, they go through manufacturing processes to produce solar panels. Forced labor can occur within these manufacturing facilities. Workers may be subjected to exploitative practices, such as excessive working hours, inadequate safety measures, poor living conditions, and restrictions on their freedom.

Exposure for JinkoSolar

JinkoSolar Company is one of the world’s largest photovoltaic materials manufacturers. It is an international, vertically-integrated company concentrating on research and development, manufacturing, and sales of photovoltaic products, including wafers, cells, and modules. According to media reports, 54% of JinkoSolar’s employees at its Kunas plant are ethnic minorities from the local area, including former farmers and herdsmen. It is unclear how many of the workers are recruited through state-sponsored labour programmes, but it is clear from the above that at least some of its workers are. This is also interesting in light of claims that only highly skilled and highly educated workers are capable of working in polysilicon plants.

JinkoSolar is also exposed to forced labour in its supply chain through Daqo New Energy , a Chinese company engaged in the manufacture of monocrystalline silicon and polysilicon, primarily for use in solar photovoltaic systems. JinkoSolar appears to be Daqo’s second largest customer. Because 100% of Daqo’s polysilicon is produced in the Uyghur Region, and its direct suppliers are implicated in labour transfers, this is a significant exposure for JinkoSolar.

Because of JinkoSolar’s connections with Xinjiang, many Western supply chains have been affected. JinkoSolar has clients all around Europe and in the Americas. According to its most recent customer records, the following companies are exposed to forced labor violations in China, among others: Elecnor SA (ES), Enel SpA (IT), Engie SA (FR), Consolidated Edison (US), and Consolidated Electrical Distributors (US).

The revelations surrounding Western firms' involvement in forced Uyghur labor raise significant ethical questions and demand urgent action. Companies must prioritize human rights and take responsibility for ensuring ethical practices throughout their supply chains. This requires rigorous due diligence, transparency, and proactive measures to eliminate any association with forced labor, regardless of the complexity of supply chains.

Evidencity conducts in-house research on TruthSeeker , researching companies and individuals of global economic interest.