The United Arab Emirates (UAE) introduced the non permanent suspension of operations at 32 gold refineries as a part of a sweeping effort to fight cash laundering and associated monetary crimes.
According to Bloomberg, the transfer comes amid growing scrutiny of the the nation’s gold sector, which has been linked to illicit actions, together with smuggling of the yellow steel and unregulated gold flows.
The UAE is without doubt one of the world’s largest gold-trading hubs, with 7,000 merchants of treasured metals and stones.
The suspended refineries, which account for roughly 5 p.c of the UAE’s gold sector, will probably be closed till October 24.
Lately, the nation’s monetary system has confronted rising worldwide criticism for allegedly failing to implement enough safeguards in opposition to cash laundering and the smuggling of battle gold. International organizations and UAE accomplice nations, equivalent to Switzerland, need to see it tackle issues in regards to the origins of the gold traded inside its borders.
In response to the UAE’s Ministry of Financial system, the suspended refineries have been discovered to be in violation of anti-money laundering rules. The 256 breaches recognized embrace failures to correctly vet clients, insufficient danger evaluation procedures and neglecting to display screen transactions in opposition to terrorism watchlists.
The crackdown additionally comes after a research printed by SWISSAID in Might confirmed that the UAE is the highest vacation spot for billions price of gold smuggled out of Africa every year. In comments to Bloomberg, the nation’s Ministry of International Affairs mentioned suspicious exercise studies associated to the gold sector reached 6,432 final 12 months from 223 in 2021.
The UAE additionally might have been the vacation spot for steel stolen in Canada’s largest gold heist.
In April 2023, 400 kilograms of gold valued at over US$20 million have been stolen from Toronto’s Pearson Worldwide Airport. Investigations by Canadian authorities counsel that a good portion of the stolen gold was smuggled abroad, probably sure for UAE and India, though the suspended refineries haven’t particularly been implicated.
The UAE’s Ministry of Financial system has said that the suspensions are a part of ongoing efforts to boost regulatory oversight and align with worldwide requirements within the combat in opposition to monetary crime.
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Securities Disclosure: I, Giann Liguid, maintain no direct funding curiosity in any firm talked about on this article.