By Ricardo Brito and Lisandra Paraguassu
BRASILIA, April 5 (Reuters) - A Supreme Court judge
backed a government move to crack down on illegal gold mining in
Brazil, suspending a legal practice of buyers accepting the
origin of the precious metal with paper receipts based on the
"good faith" of the seller.
The injunction by Justice Gilmar Mendes gave the government
90 days to adopt a new regulatory framework for the gold trade
to stop the sale of gold mined illegally from indigenous lands
and other environmentally protected areas.
"This spurious consortium formed by illegal miners and
criminal organizations must be stopped as soon as possible,"
Mendes said in his ruling late on Tuesday.
The decision, which goes into effect immediately but needs
approval by the full court, gives support to leftist President
Luiz Inacio Lula da Silva, who is facing pressure from
right-wing politicians to drop a crackdown on wildcat gold
miners.
The presumption of "good faith" in the gold supply chain
since 2013 helped to obscure the true origins of Brazilian gold
exports, roughly half of which are now estimated to be mined
illegally.
The previous government of President Jair Bolsonaro eased
environmental protections and encouraged wildcat mining in the
Amazon rainforest. A surge in illegal mining on the Yanomami
indigenous reservation caused disease and malnutrition that led
the Lula government to declare a humanitarian crisis.
The government has moved to establish stricter rules for the
gold trade, proposing to end the "good faith" practice and new
legislation that would require electronic tax receipts for the
buying and selling of the metal.
Justice Minister Flavio Dino told Reuters on Wednesday that
the text for the government's new regulations of the gold
industry should be ready next week for Lula's final review.
Last week, Brazil's tax authority mandated electronic tax
invoices for the trading in gold that is declared a financial
asset or a foreign exchange instrument, helping to curb the
trade in illegally mined gold when it takes effect on July 3.
In 2021, 54% of Brazil's gold production, or 52.8 tonnes,
had clear signs of having illegal origins, according to
Instituto Escolhas.
The Brazilian Institute of Mining (Ibram), which represents
gold mining companies such as AngloGold Ashanti Ltd and
Yamana Gold Inc , as well as multinational giants such
as Vale , Rio Tinto Ltd and BHP Group Ltd , said 20% of Brazilian gold had no declared origin in
2021, citing data from the National Mining Agency.
(Reporting by Ricardo Brito and Lisandra Paraguassu; Writing by
Anthony Boadle; Editing by Brad Haynes and Jonathan Oatis)
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