The UAE is accused of receiving tens and tens billions of dollars in gold that’s smuggled from Africa each year. This reflects the growing concern about the illicit trade of precious metals.
Swissaid, in a comprehensive report, estimated that in 2022, about 435 tonnes worth $31bn of gold were illegally exported out of Africa. This represents a doubled illicit volume in 10 years, equivalent to approximately 40 per cent or 12 per cent, of Africa’s total production.
The NGO’s report stated that the UAE, whose dominant trading hub Dubai is famous for its gold markets, accounted 93 percent of undeclared African imports. Switzerland and India were the next two largest importers.
The figures, which were released after gold prices reached record highs in the first half of this year will increase scrutiny of illegal mining and the precious metals industries of the UAE.
Marc Ummel, an author of the report, stated that the Financial Action Task Force (the international organization that combats money laundering) should reconsider removing the UAE in February from its “greylist” of countries.
He said: “You shouldn’t be removed from the lists when 400 tonnes of gold are illegally entering your country.” “This is an enormous amount of money that has left Africa, and it’s connected with money laundering, conflicts and human rights issues. It doesn’t benefit the people who are extracting the gold or trying to support their family.”
Last year, Emirates Gold, one the nation’s biggest refineries, , was banned from Dubai and London gold markets that require anti-money laundering standards and responsible sourcing. The refiner claimed at the time the suspension was not related to its compliance process and that it had always adhered to responsible sourcing practices and anti-money laundering standards.
An official in the UAE acknowledged that there were “concerns about gold smuggling to Dubai”, but added that “detailed new regulations” had been implemented for precious metals and gold “to mitigate these risks effectively”.
Gold extraction by “artisanal miners” has been an issue in the gold industry for a long time, but it has become even more acute since the price of the metal has risen. Gold reached a record of $2,400 an ounce in April after emerging market central bankers led by China bought up gold to diversify away from the US Dollar.
The report stated that Mali, Zimbabwe, and Ivory Coast were the African nations with the highest volumes of unreported gold production.
In 2023, the UAE will introduce new regulations for gold refineries to ensure that they are doing their due diligence in sourcing gold. This includes screening and visiting artisanal mining sites. The Gulf state has denied that its acceptance of artisanal mining and small-scale panning is harmful to those digging and panning on the ground.
Primera, a gold trader based in Abu Dhabi, was granted by the Democratic Republic of Congo a 25-year-monopoly for the export and trade of “artisanal” small-scale gold supplies. This move was made to combat the smuggling business. The country in central Africa is fighting rebels along its eastern border, where an extensive gold mining belt can be found.
Analysts and Congolese officials claim that armed groups, including the M23 militia, control strategic supply routes into Rwanda and Uganda. US Treasury said that most of the DRC gold had been smuggled to neighbouring Rwanda and Uganda where it was refined, and then exported primarily to UAE.
Kigali denied Rwanda’s claim that it benefits from the $1bn Congo says it loses each year from unauthorised mineral exports, adding its mining sector was “fully regulated and supervised” and “traceability was mandatory”.
“The Congolese say that we steal. . . “Their gold,” said Rwandan president Paul Kagame in November 2022. He added that most of the “gold” that passes through Rwanda does not remain in Rwanda. “It’s going to Dubai, Brussels, Tel Aviv, and Tel Aviv,” he said. . . “They accuse us that we are stealing minerals from the Congo — but what about their destination?”
Report added that the UAE was the primary destination of the vast majority artisanal gold mined in 18 African nations on the EU list of conflict-affected countries and high-risk nation.
The official from the UAE added that all refineries were required to comply with the due diligence guidelines for the responsible supply chain for minerals from conflict-affected areas and high-risk zones.
In early this year, US imposed sanctions on Al-Fakher Advanced Works. The Treasury Department claimed that the company exports gold to the paramilitary Rapid Support Forces, which have been fighting against the Sudanese Army in a brutal war.
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