How the UAE Became a Haven for Smuggling Gangs and Stolen Wealth?

Gold is still one of the most considerably-desired and useful metals in the world since no other metal has been so popular throughout history; every settled culture has used it to symbolize power and accomplishment.

It is not surprising then, for countries like the UAE, to import this valuable metal even through illegal measures.

The United Nations and Non-Governmental Organizations have long questioned Dubai's clear role in facilitating gold smuggling from African countries, and its reputation as a hub for the gold trade, but the UAE strongly rejects any involvement in such illegal practices, as Bloomberg reports.

After interviews with government officials across Africa, the agency has found out that at least 9 African countries smuggled tons of raw gold to the UAE, turning it into ingots to avoid any doubts.

 

Tons of Smuggled Gold

Through interviews with government officials across Africa, Bloomberg has found at least nine countries involved in smuggling operations of tons of gold “spirited over borders.”

According to the Organisation for Economic Cooperation and Development (OECD), these operations have led to international concerns as the contraband minerals money finance “criminal and terrorist networks, undermine democracy and facilitate money laundering.”

Desperate to recoup lost revenue, African governments are looking to Dubai to help stop the trade as it represents the hub of smuggled gold, Bloomberg reports.

In addition to Sudan; authorities in Nigeria, the Democratic Republic of Congo, Zimbabwe, Mali, Ghana, Burkina Faso, Central African Republic, and Niger speak out against tons of gold leaks through their borders each year, accusing the UAE, especially Dubai, for being the heart of the illegal operations, according to the same source.

“It’s a huge loss,” Nigerian Mines Minister Olamilekan Adegbite said in an interview in his office in Abuja, the capital, where glass cabinets display rock samples that illustrate the nation’s mining potential, so far largely untapped.

According to the American agency, the majority of Africa’s illegally mined gold is smuggled to Dubai through refineries in countries like Rwanda, or directly in hand bags, according to government and industry officials, UN experts, and civil rights groups.

Once the gold is safe on Dubai territory, this precious metal will be melted down to obscure the source before being turned into jewelry and gold bars, according to Adegbite.

 

The Hub of Gold Smuggling

A report published in The Street Journal website indicated that tons of gold are being smuggled every year outside Africa to the United Arab Emirates, one of the world’s major gold trading hubs as it was “the fifth-biggest importer and fourth-biggest exporter globally.”

During the last decades, “importing” gold from African countries, like Ghana and Sudan, has become more and more important for Dubai, “as trading in gold accounts for nearly one-fifth of UAE’s GDP,” TSJ reports.

Dubai has been long linked to the gold business and its main markets may be a good example, where several shops present shiny products made from gold which has led to growing international condemnation.

Nevertheless, Dubai stands as the centerpiece of “worldwide gold trafficking networks” and the gold can be easily smuggled there with even no documentation.

A 2021 report published by Fair Observer in June, found that gold is smuggled inside and outside many African countries which paved the way to widespread money laundering “through real estate, international trade, and crypto-assets.”

Apparently, Dubai imposes on the gold traders’ international standards relating to the origin of the mineral.

However, what is happening is completely the opposite. The origin of the gold is not even required, which helps in the acceptance of entering this metal from any country in total negligence of the production circumstances.

Most of the time, gold is being illegally produced then smuggled out of the African countries on a larger scale most of the time through criminal operations, but at a high human and environmental cost, according to the report.

Taking the example of a Dubai passenger, who failed in smuggling nearly a kilogram of gold by swallowing it.

The man taking a GoAir flight was caught with 4 pieces of flattened gold hidden up his rectum.

972 grams of gold was extracted from the first suspect, but 1.47 kilograms of gold was found on another man on the same flight.

Another man was accused when arrived at Kozhikode Airport from Sharjah in the United Arab Emirates. The suspect was stopped with 386 grams of gold hidden inside his underwear.

Last year, The National reported that seven cases of gold smuggling were announced by Cochin customs officials in just a week. The travelers were from the UAE in addition to an eighth case that was linked to neighboring Oman.

 

‘Lies’

In 2015, China was the world’s biggest gold consumer, importing more gold from Africa than the UAE.

However, according to the latest available data since 2016, the UAE imported almost “double the value taken by China,” Reuters reports.

The UAE announced gold imports from 46 African countries during 2016, 25 of these countries did not provide COMTRADE of their gold exports' data to the UAE. But the latter said it had imported a total of $7.4 billion worth of gold from them.

According to The Street Journal, a United Nations database found that the UAE has been a major destination for smuggled gold from many African countries all over the past years.

However, the UAE has strongly denied any involvement in illegal practices regarding gold trading.

Bloomberg reports that Deputy U.S. Treasury Secretary Wally Adeyemo discussed the allegations about gold smuggling from African countries with Emirati officials during a visit to Dubai and Abu Dhabi in mid-November, 2021, showing real concerns about that—according to two people with direct knowledge of the details who asked not to be identified since it is not allowed to speak up of these details publicly.

In the same week, Ahmed bin Sulayem, the head of Dubai’s commodities exchange, commented on these accusations at a conference in the Emirates by saying: “I want to address the elephant in the room: namely, the consistent and unsubstantiated attacks launched on Dubai by other trading centers and institutions, they are lies.”