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Billions In African Gold Being Smuggled Through UAE By Crime Syndicates: Report

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Via Zerohedge

A bombshell investigative report by Reuters has blown open a hitherto under-reported massive black market trade which has seen billions of dollars worth of gold smuggled out of Africa and sold to Europe via “middle man” countries like the United Arab Emirates and others in the Middle East. 

The investigation found the Middle East to be the illicit gold “gateway to markets in Europe, the United States and beyond” based on new analysis of customs data, showing tons of off-the-books non-taxed gold pouring out of countries like Ghana, Ivory Coast, Tanzania, Nigeria, and war-torn Libya and Sudan, with no official oversight by the states in which the gold is mined. 

Image via The New Arab.

The numbers are staggering in terms of the newly revealed whopping unaccounted for increase in Middle East imports for the past decade and more

Customs data shows that the UAE imported $15.1 billion worth of gold from Africa in 2016, more than any other country and up from $1.3 billion in 2006. The total weight was 446 tonnes, in varying degrees of purity – up from 67 tonnes in 2006.

Much of the gold was not recorded in the exports of African states. Five trade economists interviewed by Reuters said this indicates large amounts of gold are leaving Africa with no taxes being paid to the states that produce them.

Though small scale and individual mining which has long fueled Africa’s black market trade, often involving children and impoverished families, already known and understood, analysts interviewed by Reuters say the newly unearthed figures reveal illegal exporting on a much larger scale than was previously thought is taking place. 

Charts via Reuters

One probable explanation is large criminal syndicates are increasingly directly involved in mining and smuggling.

Recently, Ghana’s President Nana Akufo-Addo, who overseas Africa’s second-largest gold producing state, condemned these growing “large-scale and dangerous” operations which he blamed on foreign mafia entities. 

UAE’s Imports Beat Africa’s Exports, via Reuters 

The Reuters investigation concluded the following in examining customs declarations

Reuters assessed the volume of the illicit trade by comparing total imports into the UAE with the exports declared by African states. Industrial mining firms in Africa told Reuters they did not send their gold to the UAE – indicating that its gold imports from Africa come from other, informal sources.

The leaders of Tanzania and Zambia have also recently made public statements highlighting heightened illegal mining and smuggling operations “on a vast scale, sometimes by criminal operations, and often at a high human and environmental cost.”

The “artisanal” or small-scale mining approach, however, often leaks chemicals and other pollutants into soil and rivers, as detailed in the report. This includes cheap purification methods like using mercury, nitric acid, and even cyanide, which can turn local water supplies toxic. 

Dubai, UAE

With gold now trading at prices of over $40,000 per kilo, the illicit trade has seen a recent boom.

Mine in Sierra Leone, via PRX

In interviews with economists, analysts, and individuals involved in black market activity, Reuters cited the following:

Gold can be imported to Dubai with little documentation, African traders told Reuters.

Elsewhere an adviser for the African Union’s mineral oversight arm, Frank Mugyenyi, said “There is a lot of gold leaving Africa without being captured in our records.” Speaking on the Middle East in particular as a key transit point, he added, “UAE is cashing in on the unregulated environment in Africa.”

Reuters investigation: “The UAE is the biggest destination for African gold. But Africa’s biggest exporting countries are not always the biggest gold producers, according to trade data.”

The report revealed that the numbers simply don’t add up:

From 2006 to 2016, the share of African gold in UAE’s reported gold imports increased from 18 percent to nearly 50 percent, Comtrade data showed.

The UAE’s main commodity marketplace, the Dubai Multi-Commodities Centre (DMCC), calls itself on its website “your gateway to global trade.” Trading in gold accounts for nearly one-fifth of UAE’s GDP.

Simply put, no official company or industrial miner could account for the massive data gap. The report continues:

However, no big industrial companies reached by Reuters – including AngloGold Ashanti, Sibanye-Stillwater and Gold Fields – say they send gold there. Reuters contacted 23 mining companies with African operations, the smallest of which produced around 2.5 tonnes in 2018: 21 of them said they did not send metal to Dubai for refining, the other two did not respond.

Astoundingly, it appears the criminal gold trade through the Middle East is actually outpacing official purchases in that direction out of Africa. 

Further, the UN has over the past years spotlighted the UAE as among countries that continue to allow the trade in “conflict gold” originating from war-torn African states, which international monitoring bodies have sought to stamp out. 

The findings of the investigation were presented to 14 African governments, but few leaders were willing to acknowledge the depth of the problem, or stonewalled. “Of them, five said it reflected an existing concern about gold being smuggled out of their countries that they are trying to address. One said they did not think gold smuggling was a problem for them. The rest declined to comment or did not respond,” according to the report. 



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