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African Gold Worth Tens of Billions Smuggled to UAE Annually: Report

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(CTN News) – Over the past decade, there has been a significant increase in gold smuggling out of Africa, particularly to the United Arab Emirates (UAE), according to a report published on Thursday.

The report, by Swissaid, an organization focusing on development aid and advocacy, reveals that hundreds of tonnes of gold, worth tens of billions of dollars, are illegally leaving the continent annually.

In 2022 alone, the report found that 435 tonnes of gold, primarily mined by small-scale miners, were smuggled out of Africa, valued at more than US$30 billion. The UAE emerged as the primary destination for this illicitly obtained gold, receiving 405 tonnes in 2022 alone.

Over the preceding decade, the UAE accepted more than 2,500 tonnes of smuggled gold, with a cumulative value exceeding US$115 billion, according to Swissaid.

The report specifically highlighted Dubai as a key international hub for the trade in African gold, which often finds its way to countries such as Switzerland.

African Gold Smuggling through Dubai: A Conduit for Illicit Trade

Gold arrives in Dubai by various means, including commercial flights and private jets, either in hand luggage or cargo holds, according to a report. The UAE has responded to concerns about gold smuggling, implementing new regulations on gold and other precious metals.

The extent of this trade highlights how artisanal mining has evolved into a substantial industry, involving millions of people and producing quantities of gold comparable to or exceeding industrial mining.

In 2019, a Reuters investigation revealed that billions of dollars’ worth of gold was being smuggled annually out of Africa through the UAE, acting as a conduit to markets in Europe, the United States, and beyond.

Concerns Over Gold Smuggling and Regulatory Deficiencies in the UAE

Aside from the loss in tax revenues, experts and governments have raised serious concerns about the vast scale of gold smuggling, warning that it supports a significant illicit economy that is susceptible to money laundering, terrorist finance, and sanctions evasion.

Marc Ummel, the commodities lead at Swissaid and one of the authors of the report, highlighted the UAE’s role in gold laundering, stating that large quantities of illegally smuggled gold gain a legal foothold by passing through the UAE.

“If we continue to observe more than 400 tonnes of illegal gold entering the UAE annually, this clearly indicates a serious deficiency in the implementation of regulations in the UAE,” Ummel said.

Swissaid conducted its analysis by comparing total gold exports from all African countries with gold imports into non-African countries.

They supplemented gaps in UN COMTRADE data with individual country statistics, identified errors by cross-checking data with trade associations, and consulted with governments and refineries.

According to the report, these discrepancies are not found in Switzerland and India, the other major gold importing countries for African gold. The report identified 12 African countries involved in smuggling 20 tonnes or more of gold per year.

Responding to accusations of inadequate enforcement of regulations, a spokesperson for the UAE Ministry of Economy stated that the UAE cannot be held accountable for other governments’ export records.

“Our own records, where we utilize sophisticated technologies and systems to track and verify data, are the only ones for which we can be held accountable,” the spokesperson said.

Impact of Rising Gold Prices on Artisanal Mining and UAE Imports

The price of gold has doubled since 2009, leading to a surge in artisanal mining. Swissaid estimates that artisanal and small-scale gold mining in African countries produced between 443 and 596 tonnes of gold in 2022, with more than 70% of it going undeclared.

In comparison, industrial miners produced around 500 tonnes of gold annually.

The majority of African gold imported into the UAE each year originates from informal artisanal and small-scale mining, which provides livelihoods to millions but often at a high cost to local communities and the environment.

Marc Ummel pointed out a certain hypocrisy among Swiss refineries, noting, “They don’t want to source African artisanal gold directly but at the same time import very high quantities of gold from the UAE, which is the main hub for African artisanal gold.”

According to the researchers, between 80% and 85% of Africa’s artisanal gold in 2022 was exported to the UAE.

A UAE official acknowledged the importance of artisanal and small-scale gold mining to the sector and emphasized the country’s “inclusive approach” which, they claimed, allows artisanal miners to gain more value for their extracted gold.

Arsi Mughal is a staff writer at CTN News, delivering insightful and engaging content on a wide range of topics. With a knack for clear and concise writing, he crafts articles that resonate with readers. Arsi's pieces are well-researched, informative, and presented in a straightforward manner, making complex subjects accessible to a broad audience. His writing style strikes the perfect balance between professionalism and casual approachability, ensuring an enjoyable reading experience.

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