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The United Arab Emirates has temporarily suspended activities of 32 gold refineries as part of its efforts to curb money laundering.
The government is “intensifying inspection activities at factories” to combat financial crime, according to a statement from the Ministry of Economy. The closed facilities, which account for about 5% of the UAE’s gold industry, will remain suspended until October 24.
Authorities determined that the factories committed a total of 256 violations, including failing to take necessary steps to identify risks and failing to screen customer and transaction databases for names on terrorism watch lists.
The United Arab Emirates is cleaning up its gold industry as part of a wider effort to restore its financial reputation amid concerns it has turned a blind eye to money laundering and gold smuggling.
A May report by development group Swissaid estimated that two-thirds of the UAE’s gold imports from Africa were smuggled in 2022, with much of it then re-exported to other countries. Switzerland, the world’s gold refining hub, has previously expressed concerns about illegal gold bars being shipped from the United Arab Emirates.
Gold smuggling is an age-old practice but has become more lucrative as bullion prices hit record highs this year. Prices peaked at $2,483.73 an ounce in mid-July, supported by central bank buying, rising Chinese demand, geopolitical tensions and expectations of U.S. monetary easing.
By Jacob Reed, Eddie Spencer, and Salma El-Wodani
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