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Worldwide Investigation Finds Gold Facilitates Illegal Transactions in the UAE

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An international investigation has revealed that the gold trade underpins the illicit transactions for which the UAE is notorious, including crimes related to money laundering and terrorist financing.

The investigation, featured on the Swiss website Swissinfo, emphasized that gold is ubiquitous in Dubai. In the Old City, the traditional Gold Souq shops showcase its gleam through their windows, while the modern city’s skyline is decorated with glittering skyscrapers that reflect the opulence of gold and other precious metals.

The investigation stated that, unlike Switzerland, which pursues a conservative policy, the UAE boasts of its new status as a major center for gold and its use in the suspicious deal, as well as its illegal import.

According to the investigation, not long ago, the star of the United Arab Emirates, specifically the Emirate of Dubai, began to shine as a global center for gold.

Since 2012, the UAE has been investing in modern infrastructure and business-friendly policies to attract global players.

While Switzerland allows doing business in an environment equipped with a well-established financial system and a regulated market, the UAE offers a dynamic and innovative environment. The sanctions recently imposed on Russia due to its war on Ukraine played a role in the shift of gold trade to Dubai.

While companies in Switzerland source gold from industrial mines around the world, UAE companies buy gold from small-scale mining mines in sub-Saharan Africa, Latin America, and South Asia.

Switzerland indeed maintains its position as the largest importer and exporter of gold in the world in terms of value, but the UAE has succeeded in reaching a position in the top five list.

The country of mountains and snow remains the preferred destination for those seeking accuracy and reliability in gold deals. Swiss banks and gold refiners pride themselves on complying with strict standards and are increasingly focusing on sourcing gold from ethical sources.

Even the Swiss Association of Manufacturers and Traders of Precious Metals members have ceased obtaining gold from Dubai. Last year, Valcambi, the country’s largest refinery, chose to leave the association due to “irreconcilable differences.”

The association coordinates communications and lobbying on behalf of the Swiss gold sector and is proud of the code of conduct it has drafted.

In June 2022, the Financial Action Task Force, an international body that monitors money laundering and terrorist financing activities, officially included the UAE on the list of countries that will be subject to close monitoring.

The international body based this measure on the fact that the measures taken by the UAE were not sufficient to address money laundering and terrorist financing practices. The authority specifically pointed to the role of the gold sector in enabling illicit transactions.

Christoph Feld, the former CEO of a Swiss refining company and current president of the Swiss Association for the Industry and Trade of Precious Metals, states: “Dubai is a significant market and a key hub for the international precious metals trade, but we are not yet at the point where we can blindly accept everything from Dubai.”

“It has been proven that a large portion of the gold passing through Dubai comes from Africa and from areas where illegal and criminal activities and conflicts occur,” adds Christoph Feld.

There is an argument that the UAE, although still a destination for unlicensed gold mines, has taken steps to strengthen its regulatory framework.

According to analyses conducted by expert bodies, gold shipments of questionable origin may arrive in Switzerland, via the UAE, whether from conflict zones in Africa or from parties trying to evade the sanctions imposed by Western countries on Russia.