The United Arab Emirates has been a major destination for tens of billions of dollars of gold smuggling each year for the past decade, according to a new study published May 30 by Al-monitor.
A report by the non-governmental organization Swissaid said that 435 metric tons of gold worth more than $30 billion were smuggled out of Africa in 2022, mostly mined by artisanal or small-scale miners. Around 405 tons of this gold were sent to the United Arab Emirates, as confirmed by the study.
A United Arab Emirates official said the country had taken important steps to combat gold smuggling, Reuters reported. In an effort to combat money laundering and terrorist financing, the Emirates introduced regulations in January 2023 requiring UAE gold refiners to exercise due diligence when procuring supplies.
Some UAE gold refiners, such as Emirates Gold DMCC, have been removed from the country’s “trusted supplier list”, a responsible sourcing certification that gives them access to the Emirates gold market.
However, Marc Ummel, head of commodities at Swissaid and one of the authors of the report, criticized the UAE’s regulatory framework.
“If we continue to see more than 400 tonnes of illegal gold entering the UAE every year, it is a clear sign that compliance in the UAE is seriously behind.”he told Reuters.
According to him, large volumes of smuggled gold are laundered in transit through the United Arab Emirates.
India and Switzerland were the other two major foreign importers of African gold. In 2022, almost 80% of African gold imported abroad was destined for India, Switzerland and the United Arab Emirates. On the African continent, most of the industrial gold produced is exported to South Africa.
Ummel called some refiners in Switzerland hypocritical because they do not directly buy African gold, but instead import significant quantities from the United Arab Emirates.
“This situation is problematic because for many years smuggled gold, potentially linked to conflicts or human rights violations, has been entering Switzerland legally.”– he said.
Since 2009, the price of gold has doubled, leading to a boom in artisanal mining, much of it illegal. The organization estimates that African miners produced between 443 and 596 metric tons of gold in 2022, 70% of which was undeclared. The continent’s industrial mining companies are estimated to produce around 500 metric tons of oil annually.
Gold smuggling from Africa more than doubled between 2012 and 2022, according to the report.
According to Swissaid, the global gold trade is largely opaque and much of the data is not publicly available. Because many small-scale mining companies in Africa do not declare their gold, this costs participating countries significant increases in tax revenue. Gold is often undeclared because miners can get a better price on the black market than on official sites.
Source: Rossa Primavera
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