Background

Emirates Gold DMCC: A Criminal Organization? (2024)

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What is the rationale behind the United Arab Emirates’ decision to suspend Emirates Gold DMCC? Let’s go on to the next step and see how much more I can tell you before we do an extensive investigation to find out more about this.

Let’s go on to the next step and see how much more I can tell you before we do an extensive investigation to find out more about this.

The Emirates Gold DMCC asserts that it is one of the most well-known gold makers in the United Arab Emirates outside of the Emirates. This is because they provide a diverse range of bullion bars in a variety of sizes and charge very low premiums.

Additionally, they state that they can produce sophisticated semi-numismatic bars for collectors all over the globe, in addition to coins, medals, and pendants for the Middle Eastern market, in conjunction with their appreciated investment bars. 

Emirates Gold DMCC: UAE and UK bullion markets excluded

The United Arab Emirates (UAE) has barred Emirates Gold DMCC, a prominent gold refinery, from providing gold to Dubai’s bullion market. This prohibition applies to the UAE. Since the United Arab Emirates is being more scrutinized as a potential hub for criminal activities and money laundering, it was determined to take this precaution.

To be listed on the UAE Good Delivery list of approved refineries, the company was not able to get clearance under the fundamental anti-money laundering and responsible sourcing standards, which resulted in the suspension of the transaction.

Emirates Gold DMCC has continued to play an important part in the commercial center of the Gulf region ever since it started producing and refining gold more than thirty years ago. Gold refineries are granted the authorization to transport gold into the country’s gold market by the UAEGD (UAE Gold & Jewellery Group), which is responsible for managing the UAE Good Delivery list. This certification is considered to be crucial.

Refiners, on the other hand, are expected to adhere to stringent anti-money laundering and sourcing requirements to maintain their names on the list. This is done to safeguard the integrity of the gold traded.

The London Bullion Market Association (LBMA), which is in charge of supervising the largest gold trading hub in the world, has decided to suspend Emirates Gold DMCC’s privileges as a member of the organization.

A previous inquiry examination, which most likely indicated concerns with Emirates Gold DMCC’s adherence to industry standards, served as the basis for the decision that was made by the LBMA at the time.

Underscoring the rising pressure on the United Arab Emirates to address its role in assisting money laundering and other illicit activities, Emirates Gold DMCC has been refused permission to trade in two of the largest gold exchanges in the world.

An even greater amount of attention has been paid to Dubai’s participation in gold smuggling as a result of fears that it helps Russian gold, which has been subject to sanctions from the European Union, Switzerland, and the United States, to reach the market.

Several Swiss trading businesses have established subsidiaries in the United Arab Emirates (UAE) as a response to the limitations placed on Russian gold. These subsidiaries enable the Swiss corporations to continue dealing with Russian commodities under the law.

Following an analysis of the existing situation, the federal government of the United Arab Emirates (UAE), which took control of the gold trade in 2021, issued a statement indicating that a final decision about whether or not to revoke the accreditation of Emirates Gold DMCC will be made after the year.

Gold market agencies were compelled to carry out due diligence as a result of the change in ownership of Emirates Gold DMCC, which occurred in 2022 when the founder of the company passed away.

An investigation into gold trafficking from Zimbabwe that was conducted by Al-Jazeera and allegedly directed via the United Arab Emirates led to the suspension of the organization. The investigation implicated some of the most prominent persons in Zimbabwe.

The high price of gold, the ease with which it may be broken down and cast to conceal its origin, and the widespread use of gold as a distinct mode of payment outside of the financial system based on the United States dollar have all contributed to the escalation of worries over the potential for the gold industry to be corrupted by money laundering transactions.

The United Arab Emirates’ (UAE) position in the international financial sector has suffered as a result of its placement on the “grey list” for financial crimes that was compiled by the Financial Action Task Force in 2013.

When it comes to the suspension, Emirates Gold DMCC, which is a department of the Dubai government, has chosen not to make any statements. 

Charges of Money Laundering Leveled Against Emirates Gold DMCC

In July of 2023, the United Arab Emirates (UAE) took significant action against Emirates Gold DMCC, a significant gold refinery in the country, due to the possibility that the refinery was involved in money laundering. Because Emirates Gold DMCC was included on the Good Delivery List of respectable refineries in the United Arab Emirates, the license that it had been operating under was revoked.

The concerns that led to this suspension were stated by the Bullion Committee, which is chaired by the Ministry of Economy. This committee was responsible for discovering probable links between the owners of the refinery and other individuals who were suspected of participating in crimes related to money laundering.

There has been a significant development that has been made public, and that is the identity of the owner of Emirates Gold DMCC.

A reporter’s sources who are knowledgeable about the United Arab Emirates decision said that two of the refinery’s owners, Emirates Gold DMCC, were tied to the Zimbabwean entrepreneurs Simon Rudland and Howard Baker.

Concerns were raised as a result of these links, which increased the allegations of possible linkages involving money laundering. The suspension of the LBMA’s affiliate membership, the suspension of Emirates Gold DMCC’s license, and the subsequent removal of the company from the Good Delivery List all send a clear message about the level of seriousness with which the United Arab Emirates intends to deal with any possible instances of financial misdeeds.

It is clear from these efforts that the United Arab Emirates is committed to adhering to international laws and norms concerning the prevention of money laundering and the fight against the financing of terrorist organizations. Furthermore, it demonstrates that the country is prepared to take decisive measures to ensure the dependability of its financial system.

The actions taken by the United Arab Emirates (UAE) against Emirates Gold DMCC serve, in general, as a reminder of the significance of stringent financial supervision and compliance with anti-money laundering and counter-terrorism financing regulations in the context of the global economy.

When it comes to the battle against financial crime, cooperation between states and organizations may be of great assistance in protecting the integrity of the financial system and maintaining trust among global stakeholders. 

The Gold Industry in the UAE: A Money Laundering Route

The gold market in the United Arab Emirates, exemplified by Emirates Gold DMCC, has grown significantly in prominence on the international stage. Due to its prominent participation in the gold trade over the last several decades, Dubai, in particular, has acquired the moniker “the city of gold”.

Money laundering issues have grown along with the gold industry in the United Arab Emirates. Gold is a popular way for illicit money to enter the financial system because of its high value, portability, and capacity to be melted down and recast.

In response, regulatory agencies in the gold industry have increased transparency and put anti-money laundering measures in place. These include passing stringent due diligence tests to be included in the UAE’s Good Delivery List and becoming a member of groups such as the London Bullion Market Association (LBMA).

One reason for the UAE’s popularity as a center for money laundering and gold smuggling is its lax customs laws, which are particularly relevant when it comes to hand-carried gold. The United Arab Emirates, in contrast to many other nations with more stringent regulations, permits the import of gold without the need for evidence of origin or payment documents, which facilitates the covert entry of illicit gold.

Moreover, stringent due diligence procedures are absent from the UAE’s gold trade, especially in traditional marketplaces and gold souks. There are chances for unlawfully acquired or smuggled gold to reach the legal market unnoticed since merchants in these marketplaces are not obligated to verify the provenance or working conditions of the gold they purchase and sell.

The UAE’s strong dependence on cash transactions and extensive usage of the black market for gold were identified in 2020 research conducted by the Financial Action Task Force (FATF) as contributing factors to the country’s susceptibility to extensive money laundering.

Stricter regulations, such as mandating evidence of origin and validity for gold transactions, carrying out frequent audits, and encouraging more openness in the gold trade, are required to reduce these dangers. To create a strong framework against money laundering in the gold sector, cooperation between law enforcement, regulatory bodies, and industry participants is crucial.

UAE Gold Industry Money Laundering Cases

The growth of the gold sector in the United Arab Emirates has led to an increase in incidents of money laundering. The United Arab Emirates (UAE) has emerged as a prominent player in the global gold market. As a consequence of this, the criminal underworld has developed an interest in the UAE’s gold industry to take advantage of the poor regulatory environment and deficient due diligence processes.

A discussion of two prominent and well-known incidents concerning the gold business is presented to underline the dangers associated with money laundering. The first incident involves a group of individuals who are suspected of smuggling gold and utilizing the Dubai Gold and Commodities Exchange (DGCX) to conceal the profits that they made from selling gold without authorization.

To conceal the fact that illicit funds were used, the strategy calls for smuggling gold into Dubai, selling it on the Dubai Gold Exchange (DGCX), and then utilizing the obtained funds to purchase legal gold for sale on the global market.

According to the second case, Kaloti Jewellery Group, a gold refiner with a facility in Dubai, was accused of taking part in a money laundering scheme that had been going on for a considerable amount of time.

The company was accused of smuggling large quantities of gold into Dubai, refining it, and then reselling it on the international market to launder the proceeds from the sales of the gold that had been extracted illegally in South America and Africa.

According to the findings of my investigation, the United Arab Emirates gold industry has been left vulnerable to money laundering schemes as a result of regulatory deficiencies and improper due diligence methods. Inadequate documentation standards and a lack of independent audits have made it feasible for a system to arise in which illegal gold transactions take place without the appropriate level of oversight.

Even though it is a significant contributor to the economy, the United Arab Emirates gold industry has become a potential source of money laundering owing to the country’s low regulatory framework and inadequate due diligence processes.

Instances such as those described above bring to light the urgent need for governments, financial institutions, and other stakeholders to collaborate to establish stringent regulations and compliance systems that will prevent the gold industry from being used for unlawful purposes. It is vital to collaborate to develop the gold industry into a sector that is both viable and ethical. This will help to eliminate worries about money laundering and will also protect the integrity of the financial system. 

Conclusion

In conclusion, Emirates Gold DMCC was suspended by the UAE from the bullion market because it was unable to get approval for critical responsible sourcing and anti-money laundering measures.

Concerns over the company’s operations were further raised by its claimed linkages to those engaged in money-laundering operations and its listing on the “grey list” for financial crimes.

Because of weak due diligence protocols and loose regulations, the UAE’s gold sector, which includes Emirates Gold DMCC, has come under fire for possible money laundering vulnerabilities.

Stricter regulations, more openness in the gold trade, and international collaboration are required to fight money laundering. 

Following your perusal of my evaluations of Emirates Gold DMCC, what are your thoughts on the matter?

About the author

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