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The UAE has blocked one of the country’s biggest gold refineries from delivering into Dubai’s bullion market, as the Middle Eastern nation comes under greater scrutiny as a hub for money laundering.
Emirates Gold DMCC, which has refined and manufactured gold in the Gulf commercial hub for more than three decades, has been suspended from the UAE Good Delivery list of approved refineries, according to an official document available on the UAEGD website.
Membership on the list is conditional on refiners meeting anti-money laundering and responsible sourcing standards that grant them the right to deliver into the nation’s gold market.
The London Bullion Market Association, which sets the rules for the world’s largest gold trading hub, followed suit on Friday by suspending the company’s affiliate membership “due to the outcome of the recent LBMA due diligence review”.
Emirates Gold’s suspension from two of the world’s largest gold markets highlights the growing scrutiny that the UAE is coming under to clean up its role in facilitating money laundering and illicit activity.
Focus on Dubai’s role in facilitating gold smuggling has also been stoked by heightened concerns that it provides a route to market for Russian gold, which has been targeted in sanctions by the EU, Switzerland and the US.
Some Swiss trading houses have set up subsidiaries in the UAE to continue trading Russian commodities in a manner that they consider to be legal.
A person familiar with the matter said the UAE federal government, which took oversight of the gold trade in 2021, would review the situation at the end of the year and make a final decision on whether to strip Emirates Gold of its accreditation.
Emirates Gold, which was established by Swiss citizen Mohamad Shakarchi, changed ownership in 2022, a year after the death of its founder led gold market agencies to undertake due diligence, according to a person familiar with the matter.
The suspension comes months after al-Jazeera’s “Gold Mafia” investigation on the smuggling of gold from Zimbabwe, allegedly channelled through the UAE, that implicated some of the African nation’s most senior politicians.
The gold industry is susceptible to money laundering because its key commodity is valuable, can be melted down and re-casted to mask its origin. It is also accepted as a method of payment outside the US dollar financial system.
Last year, the Financial Action Task Force, the global financial crimes watchdog, placed the UAE on its grey list in a blow to its reputation.
DMCC, a Dubai government entity, declined to comment. Emirates Gold did not respond to multiple requests for comment.
