Dubai can’t shake off the stain of smuggled African gold
BNN Bloomberg
The UAE rejects any involvement in illegal practices. African exporters say tons of their gold goes missing in Dubai every year.
In the moon-like landscape of northern Sudan, informal gold miners toil with spades and pickaxes to extract their prize from shallow pits that pockmark the terrain.
Mining ore in the sweltering heat of the Nubian desert is the first stage of an illicit network that has exploded in the past 18 months following a pandemic-induced spike in the gold price. African governments desperate to recoup lost revenue are looking to Dubai to help stop the trade.
Interviews with government officials across Africa reveal smuggling operations that span at least nine countries and involve tons of gold spirited over borders. That’s a cause for international concern because the funds from contraband minerals dealing in Africa fuel conflict, finance criminal and terrorist networks, undermine democracy and facilitate money laundering, according to the Organisation for Economic Cooperation and Development.
While it’s impossible to say precisely how much is lost to smugglers each year, United Nations trade data for 2020 show a discrepancy of at least US$4 billion between the United Arab Emirates’ declared gold imports from Africa and what African countries say they exported to the UAE.
The UN and NGOs have long questioned the apparent role of one of the Emirates — Dubai — in facilitating the trade by closing its eyes to imports from dubious sources. The UAE strenuously denies any involvement in illegal practices. But as global scrutiny over corporate governance intensifies, the extent of the smuggling now under way poses increasingly uncomfortable questions for Dubai and its reputation as a gold trading hub.
Allegations that it’s not doing enough to stamp out questionable flows of the precious metal have led to public slanging matches with London, home to the world’s largest gold market, and with Switzerland, the top refiner. Deputy U.S. Treasury Secretary Wally Adeyemo discussed concerns about gold smuggling with Emirati officials during a visit to Dubai and Abu Dhabi in mid-November, according to two people with direct knowledge of the matter who asked not to be identified because they’re not permitted to speak publicly about it.
