The United Arab Emirates has blocked one of the country’s largest gold refiners from supplying the Dubai bullion market, as the Middle Eastern nation comes under increased scrutiny as a money-laundering hub.
Emirates Gold DMCC, which has refined and manufactured gold in the Gulf trading hub for more than three decades, has been suspended from the UAE Good Delivery list of approved refineries, according to an official document posted on the UAEGD website.
Membership of the list requires refiners to meet anti-money laundering and responsible sourcing standards, giving them the right to deliver into the country’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 LBMA’s recent due diligence review”.
The suspension of Emirates Gold from two of the world’s largest gold markets highlights the growing scrutiny the UAE is coming under as it seeks to clean up its role in facilitating money laundering and illicit activity.
The focus on Dubai’s role in facilitating gold smuggling has also been fuelled by heightened concerns that it provides a route to market for Russian gold, which has been targeted by sanctions from the EU, Switzerland and the US.
Some Swiss trading houses have set up subsidiaries in the United Arab Emirates to continue trading Russian commodities in a way they believe is legal.
A person familiar with the matter said the UAE federal government, which took over 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 revoke Emirates Gold’s accreditation.
Emirates Gold, founded by Swiss national Mohamad Shakarchi, changed ownership in 2022, a year after the death of its founder prompted gold market agencies to conduct due diligence, according to a person familiar with the matter.
The suspension comes months after al-Jazeera’s “Gold Mafia” investigation into gold smuggling from Zimbabwe, allegedly through the UAE, implicated some of the African country’s most senior politicians.
The gold industry is susceptible to money laundering because its key commodity is valuable and can be melted down and recast to disguise its origin. It is also accepted as a means of payment outside the US dollar financial system.
Last year, in a blow to its reputation, the Financial Action Task Force, the global financial crimes watchdog, placed the UAE on its grey list.
DMCC, a Dubai government body, declined to comment. Emirates Gold did not respond to several requests for comment.
