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The UAE has been accused of being a leading recipient of tens of billions of dollars worth of gold smuggled out of Africa every year, reflecting growing concern over the illicit trade in the region’s precious metals.
In a comprehensive study, Swissaid estimated that about 435 tonnes of gold worth about $31bn were exported undeclared out of Africa in 2022 — a doubling of illicit volumes in a decade to about 40 per cent of the continent’s production, or 12 per cent of global mined supply.
The UAE, whose dominant regional trading hub Dubai is known for its gold market, accounted for 93 per cent of undeclared African exports, the NGO’s report said. The next two biggest importers were Switzerland and India.
After gold prices hit record highs earlier this year, the figures will intensify scrutiny of illegal mining in conflict zones such as the eastern Democratic Republic of Congo and Sudan as well as the role of the UAE’s precious metals industry.
Marc Ummel, one of the report’s authors, said the Financial Action Task Force, the international body that tackles money laundering, should reconsider the removal in February of the UAE from its “grey list” of countries.
“You should not be removed from the list when you have 400 tonnes that come to your country illegally,” he said. “This is a big quantity of money leaving Africa connected to money laundering, conflict and human rights issues that does not benefit the people who extract the gold and are trying to support their families.”
Emirates Gold, one of the nation’s largest refineries, was suspended last year from accessing Dubai and London’s gold markets, which require anti-money laundering and responsible sourcing standards. The refiner said at the time that the suspension had nothing to do with its compliance processes and it has always abided by responsible sourcing and anti-money laundering practices.
A UAE official acknowledged there have been “concerns around gold smuggling into Dubai”, but said the country had “implemented detailed new regulations for gold and precious metals to mitigate these risks effectively”.
The extraction of gold by “artisanal” miners has been a long-standing issue for the gold sector but has become more acute after a surge in prices for the metal. Gold hit a record $2,400 per troy ounce in April as emerging market central banks led by China snapped up bullion to diversify their reserves away from the US dollar.
Among African nations, Mali, Zimbabwe and Ivory Coast had the largest volumes of undeclared gold production, the report said.
The UAE introduced new regulations on gold refineries in 2023 to improve due diligence when sourcing gold, including screening and conducting site visits of artisanal mines. But the Gulf state has disputed whether its approach to accepting artisanal and small-scale mining is harmful to the individuals digging and panning on the ground.
A gold mine in the eastern province of South Kivu in the Democratic Republic of Congo. The country is fighting rebels in its eastern border regions, where a mining belt holds vast amounts of gold © Alexis Huguet/AFP/Getty Images
Last year Primera, an Abu Dhabi-based gold trader, was granted a 25-year monopoly by the Democratic Republic of Congo for the trade and export of small-scale “artisanal” gold supplies, in a move aimed at combating the smuggling trade. The central African country is fighting rebels in its eastern border regions, where a mining belt holds vast amounts of gold.
Armed groups including the M23 militia control strategic supply chains into Rwanda and Uganda, analysts and Congolese officials say. The US Treasury has said most DRC gold was smuggled into neighbouring Rwanda and Uganda, where it was refined and exported mainly to the UAE.
Kigali has repeatedly denied Rwanda benefits from what Congo claims is the $1bn a year it loses from the unauthorised export of minerals, adding that its mining sector is “fully regulated and monitored” and “traceability is compulsory”.
“The Congolese are saying that we steal . . . their gold,” Rwandan President Paul Kagame said in November 2022. Most of what “goes through here does not stay here”, he added. “It goes to Dubai, to Brussels, to Tel Aviv . . . and they accuse us of stealing Congolese minerals — how about the destination?”
The UAE was the main destination for the vast majority of artisanal gold extracted in the 18 African countries on the EU’s list of conflict-affected and high-risk nations, the report added.
However, the UAE official added that the country required all gold refineries “to comply with due diligence regulations for responsible sourcing of gold, which is aligned to the OECD due diligence guidance for responsible supply chain of minerals from conflict-affected and high-risk areas”.
Earlier this year, the US sanctioned Al-Fakher Advanced Works, a holding company that the Treasury department said exports gold for the paramilitary Rapid Support Forces that have been fighting the Sudanese army in a brutal civil war.