Gold traders in Brazil must now prove that they get their metal from legal sources, following a recent Supreme Court ruling that closes a significant legal loophole exploited by organized crime.
On March 21, the Supreme Federal Court (Supremo Tribunal Federal – STF) struck down a law that established the principle of presumption of legality and good faith when trading gold. Justice Gilmar Mendes said the previous law over-simplified the process of buying the metal and allowed the expansion of a black market, strengthening illegal mining.
The court also ordered the executive branch to establish a new regulatory framework to prevent the illegal trading of gold that is extracted from protected areas and Indigenous lands.
The STF’s decision aligns with the government’s efforts to stop illegal mining. The administration of President Luiz Inácio Lula da Silva has managed to reduce the practice in some territories, though the environmental advocacy group Greenpeace reported recently that illegal miners have been moving their operations to other Indigenous lands rather than stopping their activities.
SEE ALSO: Illegal Gold Mining Continues Threatening Yanomami Land in Brazil
Criminals seem to be moving away from Brazil’s north towards the central-west region. Illegal mining decreased by 7% in Indigenous Yanomami lands in the northern states of Amazonas and Roraima, by 57% in the Munduruku region and 31% in the Kayapó region, both in the northern state of Pará. But it grew by nearly 100% in Sararé lands, located in the central state of Mato Grosso, the report found.
“Mining activities might have gone towards the Sararé now because there aren’t enforcement operations there, but at some stage the illegal miners are bound to come back,” Fiona Watson, campaign manager at the Indigenous advocacy group Survival International, told InSight Crime.
InSight Crime Analysis
The new ruling hinders illegal gold mining in the short term by adding new regulatory obstacles to the gold trade, but it is unlikely to stop the activity in the long term.
Criminal groups can easily forge legal certificates and smuggle gold across the border into less strictly regulated countries, for example.
Authorities have already reported movements to bordering countries as a result of previous enforcement actions. In December 2024, Brazil’s Federal Police dismantled an operation against a criminal organization that used Venezuelan migrants to transport illegal gold into Venezuela, Guyana, and Suriname.
Despite improvements in the regulatory framework, flaws in enforcement occur due to corrupt politicians who profit from the activity and enable mining.
“Even with laws there must be deterrence, and corruption has to be stamped out, which means investigating powerful people and holding them into account. And that is much more difficult. It is like ensuring that crime doesn’t pay,” Watson said.
Police conducted several operations to dismantle illegal gold mining networks linked to authorities last year. In October 2024, for example, an investigation by Brazil’s Federal Police targeted a deputy and a military police commander allegedly involved in a scheme of illegal arms trade linked to illegal mining in Roraima.
In November of the same year, police arrested two officials and two entrepreneurs in Pará for illegal gold mining. Authorities suspected they were part of an illegal gold network, receiving bribes from companies and other people involved in the activity.
The reliance of local economies on illegal gold extraction adds to the problem. In 2022, nearly 80% of the mining areas in the country showed signs of illegal activity, according to the Federal University of Pará (Universidade Federal do Pará). Since the activity provides income for residents and there are few other industries that provide employment, stopping it will prove difficult.