In the past months, international reports and journalistic investigations on the dark side of the gold trade in the Emirates, especially in the Emirate of Dubai, which is among the largest global centers for this trade, rolled in, as the yellow metal trade represented about one fifth of the country's gross domestic product.
The following is a review of the most important international reports, investigative investigations and court cases regarding gold smuggling to Dubai.
UN report A UN
report released by the World News Agency on June 13, 2020 revealed that tons of gold produced in the Democratic Republic of the Congo are being smuggled to its neighbors, some of which reach the Emirate of Dubai.
The annual report of the Committee of Experts of the Security Council indicated that through the eastern borders of the Republic of the Congo, smuggling amounts of gold valued at billions of dollars are smuggled. The precious metal is mined in heavy mines or so-called private or non-formal mining.
The UN experts' report estimated that 1.1 tonnes of gold was smuggled from Ituri, in the northeast of the DRC, last year.
The report emphasized that the profits of gold smuggling operations to Dubai and other African countries such as Tanzania, Rwanda and Burundi, are used to prolong the open conflict in the Congo, in addition to financing armed militias in the east of the country.
FATF Report The FATF
Financial Working Group has warned that the UAE is not doing enough to prevent money laundering and terrorist financing, due to the persistence of loopholes in sectors - including gold and real estate trade - that money laundering professionals can exploit.
The report of the "FATF" group - a global organization to combat money laundering and terrorist financing affiliated to the Group of Seven countries - added in late April that the mineral and precious stones sector in the UAE is among the highest sectors subject to money laundering practices, yet the country's authorities have not Al Khaleeji between 2013 and 2018, except with two investigations regarding suspicious transfers in that sector.
According to the report, Dubai - one of the global centers for gold trading - witnessed only 17 trials related to money laundering in the period.
The #UAE faces major illicit finance risks and must act to effectively combat money laundering. This includes pursuing professional launderers, closing loopholes in gold and property markets, and making company structures more transparent. FATF report: https://t.co/xCMQ0RFx2i 1/5 pic.twitter.com/Jxtm8x69lr
- FATF (@FATFNews) April 30, 2020
The report notes that the number of expropriations of precious metals and stones in the UAE is few, compared to the country being a global center for gold trading. In 2018, the number of expropriations was only 88, compared to 150 in 2017, and 86 in the year before.
He pointed out that the trade of precious metals - especially gold and precious stones - is one of the most popular sectors in the UAE, whether for personal use (jewelery), for investment, or for re-export.
The authors of the report, which took 14 months to complete, considered that the risks of money laundering are moderate in free financial centers where a number of gold companies are active, but the risks are high in the Dubai Gold Market, which includes a large number of traders.
According to the report, there are 7089 companies licensed in the UAE to trade in gold. In 2016, the Gulf state ranked third globally in the field of gold export, at a value of approximately $ 25.4 billion, or 7.8% of global exports.
Financial Confidentiality
The annual report of the Financial Confidentiality Index for 2020 put the United Arab Emirates among the first ten countries in this index, which was issued last March by the tax justice network, and he spoke in some of his paragraphs about the relationship of the gold sector to this secrecy.
The report adds that the adoption of the UAE authorities' policy of non-accountability regarding the origin of the financial flows received on them made it attract a number of major financial criminals in the world, who poured huge amounts of money into the emirate’s economy, whether in cash or in the form of gold holdings.
The UAE’s financial confidentiality report indicated that Dubai’s name was mentioned in a number of major money laundering operations in the world, including the smuggling of gold smuggled from conflict areas in Africa such as the Congo, and referred to a report by “Global Witness”, a global organization specialized in fighting corruption, issued in 2014. With a remarkable title, "The City of Gold ... When Does Light See the First Review Report in Dubai on Gold in Conflict Areas?"
The State Department
stated in its annual report for the year 2020 related to controlling drug trafficking and money laundering, that the money laundering that takes place in the UAE is mainly through banks, remittance companies, minerals, precious stones, and real estate.
The report issued last March added that the financial and commercial sector in the UAE involves "systemic fragility aspects regarding the fight against money laundering, which may be exploited by parties for criminal purposes."
Report of the Security Council Experts Committee: # Money and gold were smuggled to the UAE # through a shipping port by Yemeni smugglers and Emirati citizens pic.twitter.com/1wDaM4ANKZ
- Bilqis Satellite Channel (@BelqeesTV) February 15, 2018
Gold refineries The
names of gold refineries in the UAE are absent from the lists of gold refineries accredited by the London Bullion Market Association (LBMA) in the field of respecting the good standards in the gold supply chain, which are lists published on the website of the association.
The London Bullion Market Association is the global reference for gold and silver trades across the precious metal markets, whether in terms of pricing or setting standards for the gold industry. Reuters previously quoted the association's technical director as saying that she "does not feel comfortable in dealing with the region, due to concerns about weaknesses in customs, cash transactions and handcrafted gold."
British Judiciary
A court in London in the middle of last April paid $ 11 million to Amjad Rayhan, who was forced to resign from the "Ernst & Young" accounting institution, after he revealed money laundering and serious abuse in the largest refinery in Dubai.
The judicial ruling stated that the company "Ernst & Young" colluded with the authorities in Dubai to cover up information confirming that the "Al Kalouti International Company for Jewelry", which operates a gold refinery, was involved in money laundering billions of dollars.
Al-Jazeera Network's investigation unit obtained evidence that revealed that executives of "Ernst & Young" attempted to force Rayhan to return to his work in Dubai, knowing that he feared for his safety. The company had warned him not to declare the results of its audit.
Rehan believed that if he returned, he would risk exposing himself to arrest by the UAE authorities on charges of harming the country's reputation, because his audit of the accounts placed him in a clash with the DMCC, the government entity responsible for organizing and promoting the gold market that generates billions of dollars annually.
The story dates back to 2013, when Rayhan headed an audit commissioned by the Dubai Multi Commodities Center as part of a move to bring the city’s gold market in line with global standards of compliance with conflict minerals and money laundering.
The audit, led by Rayhan, concluded that the largest gold refinery in Dubai committed irregularities, based on the same guidelines issued by the DMCC, but the audit report was rewritten before publication to avoid revealing its negative results.
The violations recorded were the import of "Al Kalouti" company, gold bars from Morocco, silver-plated, as a means of evading export controls. The audit added that the company bought $ 5.2 billion of gold in cash, including "conflict" gold from Sudan. Subsequent investigations linked these business operations to money laundering and organized crime financing.
TV investigation
The French channel 2 assigned its famous investigation program "Cache Investigation" for the month of October 2019 to track money-laundering networks related to the gold trade in Dubai. The channel’s journalists tracked drug money on its journey from France to Belgium, where it bought gold bars and jewelry before it was shipped to Dubai.
The investigative investigation revealed that the Emirati company, "Kalouti", which owns the largest gold refinery in the country, bought gold bars from one of the ovaries of drug money with more than five billion euros in 2012. The French channel investigation concluded that the money is laundered in Dubai through a complex criminal network, and is returned Pumping it into the global banking system as source money with the complicity of Emirati exchange companies.
And documents broadcast by the French channel confirmed that "Ronald International" had laundered 259 million euros of drug money in one year.