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A letter seen by Reuters showed that the world’s most influential London Gold Collector has threatened to stop bullion from various countries entering the mainstream market if it does not meet regulatory standards.
In the letter dated November 6 to countries with large gold markets, the London Gold Aggregate (LBMA) set out the criteria it must meet on issues such as money laundering and where to get gold. , or the blacklist.
This step is a first of its kind, as the complex had not previously been threatened by such a measure.
“Our aim is to work together with these key markets to advance global standards, not to walk away from them,” Group Managing Director Ruth Crowell told Reuters, adding: “We are also committed to taking action. ‘there is no significant and effective improvement. “
The association’s speech did not specifically target any center, but 4 people who helped write it told Reuters that the gold industry in Dubai, United Arab Emirates, was at the center of the concerns.
The message is addressed to China, Hong Kong, India, Japan, Russia, Singapore, South Africa, Switzerland, Turkey, Emirates, United Kingdom and the United States, because the association has identified these countries as major gold centers.
The Gold Bullion Market Association is a trading group, not a government agency, but controls the market. Because the large international banks which dominate the gold trade generally only process ores coming from refineries approved by the association.
The United Arab Emirates is one of the world’s largest gold centers and exports billions of dollars in bullion each year to refineries licensed by the Bullion Association.
A Reuters investigation last year found that billions of dollars in gold had been smuggled into Dubai from Africa, and most of it was mined by artisans, often working in harsh conditions, and once the gold reaches the UAE, it can then enter the world market.
“The UAE will certainly look into the questions and concerns raised by the London Bullion Market Association once they receive the message,” the Gulf State Department of Foreign Affairs and International Cooperation said in response to questions from Reuters.
“The United Arab Emirates are aware of the importance of their alloy industry and are developing increasingly robust mechanisms to meet the challenges caused by financial crimes,” she said.
The Gulf state has tightened financial regulations in an attempt to overcome the perception of some foreign investors that this is a hot spot for illicit funds. He passed an anti-money laundering and terrorist financing law in 2018 and worked with his ally the United States to punish militant Islamist groups.
The UAE Foreign Ministry has said strengthening its regulatory framework is a key national priority.
The Bullion Market Association said the countries sending the message to it were chosen because they deal with large amounts of recycled gold, posing a particular risk of money laundering. Because the origin of scrap gold bars and jewelry can be easy to hide.
The letter clarifies that the association’s strategic goals are to ensure responsible sourcing of recycled gold, end cash transactions and support artisanal and small-scale miners.
The association asks beneficiaries to declare their support for its standards by December 11, and to share an action plan to implement it by the end of January, if it is not met.
The post stated that “Lack of cooperation or reluctance to publicly adhere to these standards and sharing the proposed timetable with the association will mean that this may no longer allow gold refiners to source materials from or passing through the International Bullion Center “.
The UAE has more than 10 gold refineries, none of which have been approved by the Bullion Market Association, and most of them have no adoption of their gold sourcing policies.
However, the association’s figures show that the refineries it certifies, particularly in Switzerland, imported 212 tonnes of gold from the Gulf state in 2018, the latest year for which data is available.
At current prices, gold will be worth $ 13 billion.
Recyclers, who take bullion in the UAE, say they carefully vet their suppliers and that many businesses in Dubai are run ethically.
However, some other refineries avoid processing substances from the Gulf State.
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