VW, Amazon and others name blacklisted groups among potential suppliers

{"text":[[{"start":9.12,"text":"Global groups from Volkswagen and Tesla to Nokia and Amazon have named businesses blacklisted by western authorities as potentially present in their supply chains, exposing a clash between sanctions rules and companies’ ability to establish the origin of every input."}],[{"start":24.4,"text":"More than 160 US companies and at least 10 based elsewhere included one or more of four gold refiners subject to US, EU or UK sanctions in their latest conflict minerals or supply chain disclosures, according to FT analysis of regulatory filings."}],[{"start":40.64,"text":"The findings highlight the possible legal risks posed by companies’ complex global supply chains, as well as the limitations of international systems designed to monitor and prevent the use of conflict minerals."}],[{"start":51.94,"text":"Under US sanctions rules, companies can in principle be held liable for indirect dealings with blacklisted entities even if they are unaware of the link, according to lawyers."}],[{"start":61.88,"text":"But inclusion of the four refiners in corporate disclosures does not necessarily indicate use of their materials. Companies warn that their inability to establish every link in their supply chains with certainty means the filings may overstate exposure."}],[{"start":null,"text":"

"}],[{"start":75.8,"text":"One former US Treasury official said companies could be “held legally culpable” for sourcing from entities blacklisted by the department’s Office of Foreign Assets Control “even if there are five intermediaries” between them."}],[{"start":87.28,"text":"A senior international sanctions lawyer said Ofac’s “starting point is strict liability, whether you’re engaging directly or indirectly with a sanctioned entity. Ofac is aware. Companies that do nothing do so at their peril.”"}],[{"start":100.84,"text":"However, they said de minimis indirect dealings were not currently an enforcement priority, underlining the gap between the breadth of the rules and companies’ practical capacity to exhaustively monitor their supply chains."}],[{"start":113.04,"text":"Conflict minerals reports, which some US public companies are obliged to file annually, are designed to provide transparency about whether metals including gold and tin may have originated in conflict zones or helped fund armed groups. Public reports on minerals sourcing are also published by large European and Japanese corporations."}],[{"start":131.56,"text":"To compile the information, reporting companies survey their direct suppliers about the facilities they use and ask them to survey their own suppliers in turn."}],[{"start":null,"text":""}],[{"start":140.64,"text":"The resulting disclosures include smelters and refiners that companies say may be present in their supply chains but whose involvement they can neither confirm nor deny."}],[{"start":149.2,"text":"None of the companies identified by the FT said they had a direct relationship with the blacklisted entities."}],[{"start":155,"text":"Two of the refiners, Russia’s Uralelectromed and Krastsvetmet, were respectively hit with US and UK sanctions in 2023 in response to the full-scale invasion of Ukraine."}],[{"start":166.24,"text":"Uganda’s African Gold Refinery was added to the US list in 2022 for allegedly handling illicitly mined gold from the Democratic Republic of Congo. The EU imposed sanctions last year on Rwanda’s Gasabo Gold Refinery over its alleged links to the M23 rebel group that has destabilised the Democratic Republic of Congo-Rwanda border region, and the US followed suit this June — after some companies had filed their annual disclosures."}],[{"start":192.68,"text":"Amazon included Krastsvetmet on its list of smelters and refiners that “may have processed gold” in its products covered by the disclosure but said it was “unable to validate the accuracy of the list”."}],[{"start":null,"text":""}],[{"start":203.36,"text":"VW included all four sanctioned entities in its disclosure, saying its list of refiners “include[s] potential suppliers, and we cannot definitively confirm or rule out their involvement”. It added that it had identified and engaged with about 1,500 suppliers in 2025 and continuously monitored “for red flags . . . excluding smelters that are not willing to strive for improvement”."}],[{"start":225.96,"text":"Tesla disclosed that all four sanctioned refiners were “potentially present” in its supply chain. However, it cited the “inherent over-reporting nature” of industry filings and said it was “unable to confirm” whether the entities were in its supply chain. It did not respond to a request to comment."}],[{"start":242,"text":"Nokia also included the sanctioned refiners in its filing, and said it had been asking its suppliers to remove African Gold Refinery from its supply chain since 2020, and to remove Uralelectromed and Krastsvetmet since 2024."}],[{"start":254.96,"text":"VW told the FT it did not have “a direct business relationship with any of the companies mentioned”."}],[{"start":261.64,"text":"Nokia said it “complies with applicable sanctions requirements and maintains a responsible minerals due diligence programme aligned with internationally recognised standards”."}],[{"start":271.08,"text":"Amazon declined to comment. Tesla did not respond to a request for comment."}],[{"start":272.84,"text":"US conflict minerals reporting rules were introduced under the Dodd-Frank Act passed in the wake of the 2008 financial crisis, but have long been criticised over the quality of the information they produce."}],[{"start":284.72,"text":"“The data that they get has limited accuracy,” said Michael Littenberg, global head of human rights compliance at US law firm Ropes & Gray. “The SEC is not spending any enforcement resources on the rule. They never have.”"}],[{"start":298.08,"text":"Reporting companies’ suppliers do not always provide comprehensive information about who they source from or respond to requests, while metal from numerous sources is likely to be blended by downstream producers before progressing up supply chains."}],[{"start":312,"text":"Willis Thomas, a consultant at CRU Group, said that “to prove you’re not buying something is pretty difficult”."}],[{"start":318.44,"text":"The sanctions lawyer said that while Ofac had “kind of looked the other way” on indirect dealings with sanctioned entities, “what might be passable now in the relevant agencies’ eyes may not be in the future”."}],[{"start":329.56,"text":"The US Treasury, the UK Treasury and the SEC declined to comment. The European Commission said it could not comment on individual cases but that “tackling circumvention of sanctions is a key priority for the EU”."}],[{"start":341.8,"text":"Additional reporting by Rafe Rosner-Uddin, Kana Inagaki and Kieran Smith"}],[{"start":351.28,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1788418855_6480.mp3"}