LONDON: The world’s most influential gold market authority is threatening to stop bullion from countries including the United Arab Emirates entering the mainstream market if they fail to meet regulatory standards, a letter seen by Reuters showed.
The LBMA letter did not target any centre in particular, but four people involved in drafting it told Reuters the gold industry in Dubai in the United Arab Emirates was the main focus. A Reuters investigation last year found gold worth billions of dollars had been smuggled to Dubai from Africa, much of it mined by artisanal labourers who often work in difficult conditions. Once the gold has reached the UAE, it can then enter the global market.
The Gulf state has tightened financial regulations to try to overcome a perception among some foreign investors that it is a hot spot for illicit money. It passed an anti-money laundering and terrorism financing law in 2018 and has worked with its ally the US to sanction Islamist militant groups. It asks recipients to declare their support for the LBMA’s standards by Dec. 11 and share an action plan for their implementation by the end of January, if they have not been met.