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In the wake of increased scrutiny as a hub for money laundering, one of the United Arab Emirates’ biggest gold refineries has been blocked from delivering into Dubai’s bullion market.
Emirates Gold DMCC, a prominent gold refining and manufacturing company in the Gulf commercial hub for over three decades, has been suspended from the UAE Good Delivery list of approved refineries. This information can be found on the UAEGD website.
In order to be listed, refiners must adhere to anti-money laundering and responsible sourcing standards which grant them the right to deliver gold into the country’s market.
Following suit, the London Bullion Market Association, responsible for regulations in the world’s largest gold trading hub, has also suspended Emirates Gold’s affiliate membership due to the outcome of a recent due diligence review.
This suspension of Emirates Gold from two major gold markets underscores the increasing focus on the UAE to address money laundering and illicit activities.
Concerns surrounding Dubai’s facilitation of gold smuggling have been amplified by fears that it serves as a market for Russian gold targeted by sanctions from the EU, Switzerland, and the US.
In an effort to continue trading Russian commodities legally, some Swiss trading houses have established subsidiaries in the UAE.
A government review of the gold trade is expected at the end of the year, with a final decision on whether to revoke Emirates Gold’s accreditation.
Emirates Gold, established by Swiss citizen Mohamad Shakarchi, changed ownership in 2022 following the founder’s death and subsequent due diligence performed by gold market agencies.
This suspension follows al-Jazeera’s investigation into the smuggling of gold from Zimbabwe, known as the “Gold Mafia,” which implicated high-ranking politicians and alleged the UAE as a channel for the illicit activity.
The gold industry is particularly susceptible to money laundering due to its high value and ability to be melted down and re-casted, thereby concealing its origin. It also serves as an alternative method of payment outside of the US dollar financial system.
Last year, the Financial Action Task Force, a global financial crimes watchdog, placed the UAE on its grey list, negatively impacting its reputation.
DMCC, a government entity in Dubai, declined to comment. Emirates Gold did not respond to multiple requests for comment.
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