6″ April “2023
Over the last 20 years, Dubai has become one of the biggest gold-trading hubs in the world. The United Arab Emirates (UAE) is the world’s second-biggest importer of gold by volume, behind only India.
Yet, while Dubai’s markets draw millions of tourists from around the world, the city has also emerged as a preferred destination for money launderers and gold smugglers trying to wash their dirty cash, according to the United Nations (PDF), think tanks and non-profits tracking illicit trade
Gold Mafia – a four-part Al Jazeera investigation into major Southern African smuggling gangs – uncovers the process that allows these groups to abuse Dubai policies, designed to facilitate business, to instead cleanse billions of dollars of tainted gold and cash.
“It all comes out of Dubai. Dubai, Dubai, Dubai,” Zimbabwean gold smuggler Ewan Macmillan told undercover reporters from Al Jazeera’s Investigative Unit (I-Unit).
‘They don’t bother’
For years, Dubai has ranked near, or at the top of, cities globally that attract the most foreign direct investment. It is also a popular commodities trading hub. That reputation has been built on the back of a series of policies to attract businesses.
Dubai was set up to be a financial capital,” former United States Federal Bureau of Investigation (FBI) investigator Karen Greenaway, who now works as an anti-money laundering consultant, told Al Jazeera. “They have set themselves up to be in the middle of the gold trade, with lax laws and no enforcement.”
犀利士“All of those things make Dubai a great place to have something like this, a major international money laundering operation involving, in this case, gold smuggling,” she said, referring to the Al Jazeera investigation.
The absence of “policing” of the free zones allows them to be abused, Greenaway said.
Practically brand new gold’
According to research by the Carnegie Endowment for International Peace in 2020, the so-called hawala system plays a significant role in the money laundering chain that passes through Dubai.
Hawala is a way of transferring cash across borders outside the scrutiny of the formal financial system. It relies on trust and connections, and is used often for legitimate reasons in regions where people do not have access to banks. But it is also ideal for money laundering as there are no official transactions on the books, making it impossible for authorities to trace money flows.
“A combination of loosely regulated gold imports, poor oversight of free trade zones, trade misinvoicing, and the flow of currency via informal systems like hawala are a boon to trade-based money laundering networks,” the Carnegie report on Dubai’s gold trade said.
During Al Jazeera’s investigation, smugglers like Pattni and Macmillan offered to use Zimbabwean gold to effectively turn dirty cash into legitimate money for our reporters.
The gold from Zimbabwe is sent to a Dubai refinery where it is melted down again. It is then turned into a gold bar with the Dubai refinery’s stamp. Evidence of its roots is eliminated, making it easier to sell the gold because of the taint associated with Zimbabwe and its leaders as a result of Western sanctions.
“Gold that comes to refiners, once it’s refined, it’s practically brand new gold,” said Amjad Rihan, a former partner at global accounting firm Ernst & Young whose work involved tracking the gold trade in Dubai. The money from the sale of this gold is then transferred into bank accounts as legitimate earnings.