Illegal gold trade: How Dubai routes African gold to Switzerland
Every year, 320-470 tons of gold, worth $24-35 billion, are smuggled from Africa. A large portion of it goes to Dubai before being legally re-exported to other countries, including Switzerland, according to a report titled "Tracking African Gold" released on Thursday by the Swiss organization Swissaid.
12:09 PM EDT, May 31, 2024
In 2022 alone, at least 480 tons of gold were illegally exported from the African continent. These significant figures indicate a substantial loss of revenue for many African countries.
To complicate the tracking of gold exports, smugglers create a complex chain that starts in illegal mines, continues through multiple sales—each accompanied by the smelting of the raw material—and ends in legal export. Before reaching the final recipient, gold passes through hundreds of hands and dozens of countries.
Swissaid investigators have focused on this lack of transparency. To trace the precious metals, they estimated gold production and trade, both declared and undeclared, in all 54 African countries over more than ten years. Africa is the main gold-producing continent, and the leading producers are Ghana, South Africa, Mali, Burkina Faso, and Sierra Leone.
In hand luggage or cargo hold
Tracking African gold led Swiss researchers to Dubai, which they identified as an international trading hub for the metal. It is transported there by airplane, "in hand luggage or cargo hold, on commercial flights or private jets," the report's authors write. From the United Arab Emirates it is legally exported to countries including Switzerland and India.
In 2022, Switzerland accounted for 21 percent of the direct import of African gold. The country also imports a significant amount of gold from Dubai (over 1,840 tons between 2012 and 2022). Since the United Arab Emirates does not have gold mines within its territory, it mainly imports gold from Africa, often without a declaration of origin. The study indicates that between 2012 and 2022, 2,860 tons of undeclared gold were brought from Africa to the United Arab Emirates.
Since Swiss legislation recognizes the last place of processing as the country of origin, gold imported from Dubai is considered Emirati.
This situation is problematic because for many years smuggled gold, potentially linked to conflicts or human rights violations, has been legally landing in Switzerland, explains Marc Ummel, co-author of the report.
Switzerland has an important role here, as it hosts four of the world's nine largest refineries and handles nearly 50% of the world's gold imports. Tightening regulations on this import would impact the global trade of this precious metal, he adds.
