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Switzerland Tells Refiners to Get Strict on UAE Gold

This content was published on October 16, 2021 - 11:18

(Bloomberg) -- Switzerland has told its gold refineries to tighten up audits on imports arriving from the United Arab Emirates to make sure illicit African bullion isn’t involved. 

In a letter dated Oct. 11 seen by Bloomberg, the State Secretariat for Economic Affairs said refineries should ensure sufficient steps are taken to identify the true country of origin for all gold coming from the UAE. He pointed to the high volume of imports coming from the state, which is set to account for 10% of Switzerland’s total in 2021.

Erwin Bollinger, head of the bilateral economic relations division, also told the refineries that Swiss President Guy Parmelin plans to visit the UAE later this month.

The state secretariat in Bern didn’t respond to requests for comment.

“We have long been cooperative with all international regulations and best practices including anti-money laundering efforts and unethical sourcing of gold,” Thani Al Zeyoudi, UAE minister of state for foreign trade, said in an emailed statement. 

Strengthening efforts against money laundering and combating the financing of terrorism is “a critical national priority and is a central focus of the UAE leadership,” he said. 

Concerns about Dubai’s role in the illicit bullion trade have grown in recent years after reports that regulatory loopholes allow gold linked to conflict and money laundering to trade there. The city is the destination for 95% of the gold originating from east and central Africa, according to United Nations data, and that region is considered high risk due to the presence of armed groups.

That heightens fears that the gold may be making its way into Western markets, potentially via Switzerland, the world’s refining hub. Some refiners, including Metalor Technologies SA, don’t accept gold from Dubai because of the difficulty in pinpointing its origin.

The London Bullion Market Association last year threatened to blacklist countries that didn’t meet its standards on responsible sourcing, a move targeted at Dubai, according to a person familiar with the matter.  

(Updates with comments from UAE government in fifth paragraph.)

©2021 Bloomberg L.P.

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