The United Arab Emirates (UAE) Cracks Down on Money Laundering by Suspending 32 Gold Refineries
Bloomberg reports that the UAE has taken a bold step in combating money laundering and related financial crimes by temporarily halting operations at 32 gold refineries.
Known as one of the world’s largest gold-trading hubs, the UAE houses 7,000 traders of precious metals and stones. However, concerns about illicit activities, such as gold smuggling and unregulated flows, have prompted this crackdown.
These suspended refineries, comprising around 5 percent of the UAE’s gold sector, will remain closed until October 24. The move follows international criticism of the country’s financial system for not effectively preventing money laundering and illicit gold trade.
The Ministry of Economy in the UAE revealed that the suspended refineries violated anti-money laundering regulations, with 256 breaches identified. These breaches include inadequate customer vetting, insufficient risk assessment procedures, and a failure to screen transactions against terrorism watchlists.
Furthermore, a study by SWISSAID indicated that the UAE serves as the primary destination for gold smuggled out of Africa, amounting to billions annually. The number of suspicious activity reports related to the gold sector spiked from 223 in 2021 to 6,432 last year.
Notably, the UAE may have been involved in the disposal of gold stolen in Canada’s largest heist in April 2023. Investigations suggest that a significant portion of the stolen gold, valued at over US$20 million, was smuggled overseas, potentially to the UAE and India.
The Ministry of Economy emphasizes that these suspensions are part of continuous efforts to strengthen regulatory oversight and align with international standards in combating financial crime.
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Securities Disclosure: I, Giann Liguid, have no direct investment interest in any company mentioned in this article.