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Gold worth billions smuggled to UAE each year: Report

Gold smuggling from Africa, primarily to the United Arab Emirates (UAE), has surged dramatically over the last decade, with hundreds of tonnes of gold worth tens of billions of dollars illegally leaving the continent each year, according to a report released on Thursday.

Swissaid, an organization focused on development aid and advocacy, reported that 435 tonnes of gold, mostly mined by small-scale miners and valued at over $30 billion, were smuggled out of Africa in 2022. The UAE was identified as the primary destination, receiving 405 tonnes of smuggled gold in that year alone. Over the past decade, the UAE has accepted more than 2,500 tonnes of smuggled gold, worth over $115 billion, according to Swissaid.

A UAE official, in response to these findings, claimed that the country has made significant strides in addressing gold smuggling concerns by implementing new regulations on gold and other precious metals.

The scale of this smuggling highlights the rapid expansion of small-scale, or artisanal, mining, which now involves millions of people and produces gold volumes comparable to, or even exceeding, those of industrial mining.

A Reuters investigation in 2019 revealed that billions of dollars’ worth of gold was being smuggled out of Africa annually through the UAE, which acts as a gateway to markets in Europe, the United States, and beyond. Experts and governments have warned that this level of smuggling not only results in lost tax revenues but also fuels a vast illicit economy susceptible to money laundering, terrorist financing, and sanctions evasion.

Marc Ummel, the commodities lead at Swissaid and co-author of the report, stated that the UAE contributes to gold laundering, as large quantities of smuggled gold gain legal status by passing through the UAE. Ummel remarked, “If we continue to see more than 400 tonnes of illegal gold entering the UAE every year, it clearly indicates serious shortcomings in the implementation of regulations in the UAE.”

For its analysis, Swissaid compared total gold exports from African countries with gold imports into non-African countries, filling gaps in UN Comtrade data with individual country statistics and identifying discrepancies by comparing these data with trade association figures and consultations with governments and refineries. Such discrepancies between declared exports and imports do not exist for Switzerland and India, two other major gold importers.

The Swissaid report identified 12 African countries involved in smuggling 20 tonnes or more per year. A spokesperson from the UAE Ministry of Economy responded to accusations of insufficient regulatory enforcement by asserting that the UAE cannot be held responsible for the export records of other governments, only its own, where sophisticated technologies and systems are used to track and verify data.

The rise in gold prices since 2009 has led 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 percent of this gold not declared. In comparison, industrial miners produced around 500 tonnes of gold annually.

The report indicated that most African gold imported into the UAE each year originates from informal artisanal and small-scale mining. While these methods provide livelihoods to millions of Africans, they often come with significant costs to local communities and the environment.

Ummel criticized the “hypocrisy” of some Swiss refineries, which avoid sourcing African artisanal gold directly but import large quantities of gold from the UAE, a major hub for African artisanal gold. Researchers found that between 80% and 85% of Africa’s artisanal gold in 2022 was exported to the UAE.

A UAE official emphasized that the country acknowledges the importance of artisanal and small-scale gold mining and that its “inclusive approach” has enabled artisanal miners to realize more value for their gold.

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