UAE main destination for smuggled African gold, report claims
Swissaid estimates that 405 metric tons of gold, mostly mined by small-scale or artisanal miners, were smuggled out of Africa in 2022 and ended up in the UAE.
The United Arab Emirates has been the main destination for tens of billions of dollars worth of gold smuggled out of Africa each year for the last decade, a new study published Thursday claims.
The report by NGO Swissaid found that 435 metric tons of gold, worth more than $30 billion and mostly mined by small-scale or artisanal miners, was smuggled out of Africa in 2022. Some 405 metric tons of that gold went to the UAE, the study found.
A UAE official said the Gulf country had taken significant steps to address gold smuggling with new regulations on gold and other precious metals, Reuters reported Thursday. In a bid to crack down on money laundering and terror financing, in January 2023 the Emirates implemented regulations requiring UAE gold refiners to perform due diligence in their sourcing.
Some UAE gold refiners such as Emirates Gold DMCC have been suspended from the country's "good delivery list," a certification of responsible sourcing that grants them access to the Emirati gold market.
However, Marc Ummel, Swissaid commodities lead and one of the report’s authors, criticized the UAE’s regulatory landscape.
"If we keep on seeing more than 400 tons of illegal gold entering the UAE every year, this is a clear sign that the implementation of the regulations in the UAE is seriously lacking,” he told Reuters.
He said that large quantities of gold smuggled are laundered by transiting through the UAE.
India and Switzerland were found to be the two other major foreign importers of African gold. In 2022, almost 80% of African gold imported abroad went to India, Switzerland and the UAE. On the African continent, much of the mined industrial gold is exported to South Africa.
Ummel called some refiners in Switzerland hypocritical because they won’t source African gold directly but import significant quantities from the UAE.
“This situation is problematic because for many years smuggled gold potentially linked to conflicts or human rights violations has been legally landing in Switzerland,” 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 Africa’s artisanal miners produced between 443 and 596 metric tons of gold in 2022, 70% of it undeclared. Industrial miners on the continent are estimated to produce around 500 metric tons a year.
Gold smuggling out of Africa has more than doubled between 2012 and 2022, the report found.
The world's gold trade is largely opaque and Swissaid cautioned that much of the data is not publicly available. As many small-scale miners in Africa do not declare their gold, it costs the countries involved significant tax revenues. Gold is often undeclared because miners can get a better rate for it on the black market than in official venues.
