(Bloomberg) -- Billions of dollars of gold is smuggled out of Africa every year, with the vast majority exported to the United Arab Emirates for processing, according to a report by SwissAid.
Using data on declared and undeclared gold imports over a 10-year period ending in 2022, the Bern-based non-governmental organization estimates that the illicit trade amounts to between US$23.7 billion and $35 billion annually based on current market prices. More than 435 tons of bullion was smuggled out of Africa in 2022 alone, it said.
The revenue fuels conflict, finances criminal and terrorist networks, undermines democracy and facilitates money laundering, according to the group. Smuggled gold originates from 12 African countries, with most of the informal trade coming from Mali, Ghana and Zimbabwe. An estimated $115.3 billion worth of bullion entered the UAE in the decade following 2012, the group said.
The UAE has taken “significant steps to address concerns around gold smuggling, recognizing the risks posed by such activities,” the Ministry of Foreign Affairs said in an emailed response to a request for comment. For example, the UAE authorities have seen suspicious activity reports relating to the gold sector increase to 6,432 last year from 223 in 2021, it said.
The UAE has also increased inspections looking for smuggled bullion and so far handed out more than 78 million dirhams ($21.2 million) in fines.
The UAE Ministry of Economy told SwissAid the country “cannot be held accountable for other government’s export records. Only our own, where we have sophisticated technologies and systems to track and verify the data.” The ministry “also stressed in its response that the UAE has adopted measures to curb money laundering in the gold sector,” according to the report.
Last year, the UAE suspended the accreditation of Emirates Gold DMCC, one of the country’s biggest gold refineries, over concerns that its owners had ties to alleged money launderers.
The bulk of Africa’s illegally mined gold is channeled to Dubai through refineries in countries like Uganda and Rwanda, sometimes via private jet, or is flown there directly in hand luggage, often with false papers, according to the report. The emirate is home to at least 20 gold refineries and more than 7,000 traders in precious metals and stones. Smuggled gold is also sent to India and Switzerland, the report said.
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