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(Kitco News) - The UAE is looking to clean up its growing gold market by cracking down on potential money laundering within the sector.
Last week, Emirates Gold DMCC was suspended from the UAE Good Delivery (UAEGD) list of approved refineries, according to media reports quoting the UAEGD website. According to the reports, the UAE government is investigating Emirates Gold for links to alleged money launderers.
Friday, the London Bullion Market Association followed suit, suspending Emirates Gold from its own Good Delivery List.
Emirate Gold dismissed the suspension, saying it was working to resolve the issues.
"The suspension of the UAE Good Delivery accreditation is merely a temporary suspension and management are working with the Emirates Bullion Committee to resolve their concerns and have the accreditation reinstated,” the refinery said in a statement.
Emirates Gold has been one of the nation's top precious metals refineries for the last three decades, and has been a key precious metals supplier for Dubai's growing bullion market.
Some reports noted that UAEGD's move came after al-Jazeera published an investigative series in April that highlighted how gold is used to launder money through Dubai's market.
The investigative series highlighted how conflict gold is smuggled out of African nations like Zimbabwe, making its way to Dubai. According to the report, the conflict gold is repeatedly refined to obfuscate its origins and is then shipped to larger precious metals hubs like London and Switzerland.
Laundering dirty money through the gold market has become a multi-billion-dollar industry.
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Along with African nations, UAE has become a key destination for Russian gold. Last year Western countries placed heavy sanctions on Russia's gold industry after Russia invaded Ukraine in February 2022. But those sanctions don't apply to the UAE.
A Reuters article in May reported that a thousand gold shipments were made between Russia and the UAE between February 2022 and March of this year.
Last year, the Financial Action Task Force (FATF), the global financial crime watchdog, placed the UAE on a ‘grey list' and said it is subject to increased monitoring. Since then, the Middle Eastern nation has been working to improve its standing in global markets.
