UAE Suspends 32 Gold Refineries to Combat Money Laundering

The United Arab Emirates Ministry of Economy has temporarily ceased operations in 32 gold refineries for three months for not complying with money laundering laws.

This initiative was taken due to growing concerns that the gold market has possibly been exploited for financial crimes such as money laundering.

According to a statement from the Ministry of Economy, the government is “intensifying inspection campaigns” at facilities for financial crimes, particularly money laundering.

“32 halted refineries contribute to 5% of the UAE’s gold sector,” the ministry declared.

This suspension started on 24 July and will continue until 24 October.

256 Violations charged against refiners

After extensive inspections, the ministry has charged refineries with a total of 256 violations  (8 each).

The reasons behind these violations have been discussed below:

• Improper AML measures to identify risks associated with money-laundering.
• Failure to notify the financial information unit (FIU) about suspicious transactions.
• Lack of proper examination techniques for customer and transaction records against terrorism watchlists..

The root cause of suspension

Accusations speculating that UAE’s gold sector, due to its high value and easy trading, is vulnerable to financial crimes, mainly money laundering, have made the Ministry of UAE to strengthen its efforts by purging the gold market to restore its financial credibility and image worldwide.

Gold smuggling is a persistent issue due to its lucrative way of moving funds, bypassing the stringent detection processes.

By the year 2024, it has become more profitable due to the exceptional price. In mid-July, prices hit $2,483.73 per ounce due to:

• Demands have increased in China
• Central banks buying more gold
• Political tension is arising around the global
• Expectation that the U.S might lower the interests

Insights From Swissaid’s Report

In May, the development organization Swissaid analyzed in a report that:

“Approximately two-thirds of all gold had been illegally imported from America to the UAE in 2022”.

According to a report,  Switzerland has already highlighted concerns about the illicit shipment of billions from the United Arab Emirates.

What’s the Response by UAE Authorities?

The Financial Action Task Force (FATF), recently removed the United Arab Emirates (UAE) from its “greylist” by monitoring its efforts in combating money laundering and introduced certain “keyforms” in their legal system.

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