Billions of dollars of African gold smuggled into UAE every year: study | Wilnesh News

DUBAI, United Arab Emirates – Each year, up to $35 billion worth of gold produced by artisanal and small-scale mining in Africa, the world’s largest gold-producing continent, is undeclared and then smuggled out of the country.

The vast majority of this goes to the United Arab Emirates, according to research published by SwissAid, an independent aid and advocacy organization based in Switzerland.

“More than 435 tons of gold were smuggled out of Africa in 2022, equivalent to more than a ton per day,” the organization’s report released Thursday reads. A ton is one metric ton, equivalent to 2,204 pounds.

The report details that the 435 tons of smuggled gold are worth $30.7 billion based on gold prices on May 1, 2024, adding: “The vast majority of this gold is imported into the United Arab Emirates (UAE) and then exported to other countries.

Most of the industrial gold exported by African countries goes to South Africa, Switzerland and India. Industrial gold accounts for approximately 11% of all gold production and is used in the medical, electronics, automotive, aerospace and defense industries.

But Swiss Aid writes that most of the artisanal and small-scale mining (ASM) gold produced on the continent — 80% to 85% — goes to the UAE.

Across all categories, Africa’s top three importers of gold are the United Arab Emirates, Switzerland and India, with nearly 80% of the continent’s gold expected to flow to these countries by 2022, with the United Arab Emirates alone importing more than 47% of gold.

CNBC has contacted the UAE Ministry of Economy for comment.

When it comes to undeclared gold (that is, gold that is not declared or exported without declaration), the vast majority of precious metals are only declared after they have been imported into another country outside of Africa. Only in this way does it gain legal existence.

According to Swiss Aid, once it enters the international market and is declared for import in countries such as the United Arab Emirates, it can be legally exported to other countries, whose laws are often lax in discerning the actual origin of the metal.

For example, in Switzerland, the last point of processing is considered the gold’s “origin,” meaning that gold re-exported from the UAE will be classified as Emirati gold, even if it originally came from somewhere else.

“This situation is problematic because smuggled gold, possibly linked to conflict or human rights violations, has been landing legally in Switzerland for many years,” said Marc Umel, head of the Swiss Agency for International Development’s raw materials unit and co-author of the study. .

The SwissAid study was asked to track the movement of a highly sought-after commodity through a particularly opaque industry, with the product changing hands and countries multiple times as it is extracted, sold, transported, processed, reprocessed, refined – Before arriving its final selling point.

The study authors quantified “gold production and trade (including declared and undeclared gold) in all 54 countries in Africa over a decade” to uncover what they say are unfair practices and oversights. and called for action to better regulate the industry.

“Large amounts of gold are smuggled out of Africa, customs and production site controls are poor, some statistics are not transparent, and others are even falsified,” the report said.

“Governments can no longer use the lack and poor quality of data and other information as excuses for inaction; they must shoulder their responsibilities, particularly by tightening controls and working to formalize the sector.”