Since the beginning of sanctions against Russia, the share of gold from Dubai has increased to 15% in Switzerland. Voluntary charities and refineries point to a higher risk of avoiding sanctions.
Dubai, the city of gold. The real center of world trade in this precious metal. Every year 20 to 40% of the world’s gold stocks move.
According to the Dubai Customs Department, its trade last year was 56 billion francs. It is the second most profitable export after oil. Most of these exports go to Switzerland, the United Arab Emirates’ 4th largest trading partner.
But the city continues to be isolated, especially by the UN, due to its reluctance to control its source of gold. The United Arab Emirates has refused to go near Moscow in recent months and condemn the Ukrainian invasion.
This reinforces NGO Swissaid’s fears that gold from Russia will pass through Dubai before being imported into Switzerland, thus avoiding sanctions.
Russian gold retreats, Dubai explodes
The day after European sanctions were reopened by Switzerland, Swiss refineries stopped all gold imports from Russia (17 tonnes in 2021, valued at nearly one billion francs). At the same time, the volume of gold from the United Arab Emirates increased: 56 tons in two months, worth 3.3 billion francs. Unheard of for 6 years.
According to Marc Ummel, Swissaid’s raw materials manager, it is feared that part of the gold could be used to finance the war: “We know that Russia exports some of its gold to China, India or the United Arab Emirates. He has played this transport role over time.
Great manufacturer and holder of gold
According to the World Gold Council, Russia is the world’s second-largest gold producer, cutting more than 330 tonnes or 10% of global production by 2020.
There is gold from Russian mines, but the Russian central bank also has gold accumulated in its reserves. With nearly 2,300 tons of gold, it holds the fifth largest sovereign gold in the world. This balance of $ 132 billion in gold is a potential bargaining chip with trading partners who do not use sanctions.
Four Swiss refineries abandon Dubai
Who in Switzerland knows these risks and buys gold from Dubai? Of the five Swiss refineries that are members of the international standard London Bullion Market Association (LBMA), four say they have not imported gold from Dubai since March: MKS PAMP, Metalor, Argor-Heraus and PX Précinox SA.
Some have given it up for years. At La Chaux-de-Fonds, PX Précinox SA’s boss says he has been amazed at the amount of gold imported from the UAE since March: “It’s very difficult to make sure to find gold, especially from Dubai. , For example gold of artisan origin. “
Last week, Robin Kolvenbach, managing director of the Tzino-based Argor-Heraeus refinery, told Reuters: “Gold from Russia can also be considered to end up in Western value chains via Dubai.”
Valcambi, confirmed its control system
The Swiss (and global) leader of the branch, Walkombi of Ticino, confirms the import of gold from Dubai, but denies allegations that he violated sanctions against Russia. In writing, he responds to RTS: “Like everyone else we are aware of the potential risk, but we have developed systems that allow us to verify for ourselves whether the information obtained from refineries and local traders is accurate. […] The gold we buy is not of African or Russian descent. Barriers have not been violated by our colleagues in Walkombi or Dubai and they strictly adhere to all the restrictions imposed. “
This diligence does not convince Mark Ummel, who has reprimanded a Valkyrie customer in Dubai in the past. “Once gold is refined in the United Arab Emirates, all traces are lost. This raises many questions about the true origin of this gold, which could be linked to serious violations or funding for the conflict.”
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The NGO cited various reports as evidence, particularly in the letter sent by the Federal Council in 2018, the Federal Audit Office in 2020 or the State Secretariat (Seco) sent to Swiss refineries last October. To accurately check the integrity of Dubai’s gold supply chain.
Gaps in the frame
For its part, Seco believes that there are not enough elements beyond mere speculation to support the suspicion of avoiding sanctions. Its spokesman responded in writing: “We do not know the reasons for this increase in gold imports from the United Arab Emirates. […] It should be noted that this country is not affected by the sanctions imposed by the European Union and Switzerland. This means that gold can be legally imported. “
According to Swissaid, Switzerland’s law refining two – thirds of the world’s gold is not enough. Mark Ummel condemns two major flaws. First: Refiners have no obligation to declare the true origin of gold. The second is about the precious metals control law, which does not require refiners to detect the entire supply chain. “Today, purifiers are forced to go back to the first supplier, but can not control the whole chain. That’s the whole problem.”
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