The United Arab Emirates (UAE) announced the temporary suspension of operations at 32 gold refineries as part of a sweeping effort to combat money laundering and related financial crimes.
The UAE is one of the world’s largest gold-trading hubs, with 7,000 traders of precious metals and stones.
The suspended refineries, which account for roughly 5 percent of the UAE’s gold sector, will be closed until October 24.
In recent years, the country’s financial system has faced growing international criticism for allegedly failing to enforce adequate safeguards against money laundering and the smuggling of conflict gold. Global organizations and UAE partner countries, such as Switzerland, want to see it address concerns about the origins of the gold traded within its borders.
According to the UAE’s Ministry of Economy, the suspended refineries were found to be in violation of anti-money laundering regulations. The 256 breaches identified include failures to properly vet customers, inadequate risk assessment procedures and neglecting to screen transactions against terrorism watchlists.
In April 2023, 400 kilograms of gold valued at over US$20 million were stolen from Toronto’s Pearson International Airport. Investigations by Canadian authorities suggest that a significant portion of the stolen gold was smuggled overseas, potentially bound for UAE and India, although the suspended refineries have not specifically been implicated.
The UAE’s Ministry of Economy has stated that the suspensions are part of ongoing efforts to enhance regulatory oversight and align with international standards in the fight against financial crime.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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