Editor’s Note
The UAE’s move to mandate annual audits for gold refineries aims to curb illegal trade and improve standards in a major global hub. However, experts caution it may inadvertently divert illicit gold flows to less regulated markets, highlighting the ongoing challenges in policing the global bullion trade.
LONDON, Nov 8 (Reuters) – The United Arab Emirates will require all gold refineries to undergo annual audits to ensure their suppliers are responsible, it told Reuters, in an effort to combat illegal trade.
Industry figures said this should raise standards in the UAE, one of the world’s largest bullion trading hubs, but it could also shift gold flows linked to crime or human rights abuses to other countries, for example in Africa, where the number of gold refineries is growing rapidly.
A 2019 Reuters investigation found that the UAE was receiving billions of dollars worth of smuggled gold from Africa, partly mined under deplorable and polluting conditions and in conflict countries.
Organizations such as the Financial Action Task Force (FATF), an intergovernmental money laundering monitor, are pressuring the country to tighten rules and enforcement. The UAE has said this is a national priority.
The UAE Ministry of Economy told Reuters that a UAE Good Delivery Standard would require refineries to properly vet suppliers and demonstrate to external auditors that they have done so.
The ministry said its goal was for the entire industry to conform to responsible sourcing standards. It declined to comment further ahead of an announcement at a precious metals industry conference in Dubai later this month.
But the illegal trade will not disappear, he said.
Most countries do not require sourcing audits. In sub-Saharan Africa, there are dozens of refineries operating or under construction, and in India, a major importer of gold from small-scale mines, there are many refineries not subject to scrutiny.
(Reporting by Peter Hobson; editing by Veronica Brown and Emelia Sithole-Matarise)