Uganda returns seized gold consignment to African Gold Refinery

KAMPALA, March 28 (Reuters) - Ugandan police have returned a gold consignment worth $149 million to the country’s biggest gold refinery after the attorney general dismissed allegations that it had smuggled the metal from sanctions-hit Venezuela.

The gold was part of a 7.4-tonne shipment valued at around $300 million that African Gold Refinery (AGR) imported in two batches - 3.8 and 3.6 tonnes - from South America on March 2 and March 4 respectively.

While AGR declined to confirm the exact provenance of the gold, the Ugandan government said it had been shipped from Venezuela.

Ugandan police raided the firm’s premises in the lakeside town of Entebbe, about 50 kilometres south of the capital Kampala, on March 7 and seized the smaller consignment.

AGR said earlier this month the gold shipments were done legally and denied accusations of bypassing customs or breaking any international laws.

In a letter written on March 26 and seen by Reuters, Uganda’s attorney general William Byaruhanga said AGR had lawfully imported the gold. He ordered police to hand back the seized consignment and recall officers deployed to the firm.

He said an existing tax exemption law covered the AGR gold shipment and that “dispels the suspicion of smuggling”.

“You are directed to withdraw your officers deployed at the premises of AGR and release any gold that may have been seized or impounded,” Byaruhanga wrote in the letter.

Byaruhanga cited in his letter a security investigation report which he said showed the gold had been imported from Venezuela.

Jessica Kaigombe, the police commandant of the Minerals Protection Unit that oversees security in the mining sector and to whom Byaruhanga wrote the letter, said police had already withdrawn from AGR’s premises and returned the gold to the firm.

In an email, the firm confirmed police had left their premises. In the letter Byaruhanga also ordered AGR “to cease and desist from any further importation of gold from Venezuela” in light of the U.S sanctions imposed on the country, but said this month’s shipment should be treated as an exception.

“AGR will definitely comply,” the firm said in the email to Reuters.

Uganda has over the years evolved as a regional gold smuggling and trading hub, with dealers exploiting its proximity to Democratic Republic of Congo.

Congo produces tonnes of gold, but has been plagued by decades of conflict and mismanagement. (Reporting by Elias Biryabarema; Editing by Jan Harvey)