ILLICIT TRADE UPDATE
Dubai to crack down on gold smugglers travelling to the emirate state via South Africa
Daily Maverick 168 reported last month that gold smugglers were using South Africa as a transit route as they made their way to and from Dubai. A Dubai authority has since announced it has flagged this problem and will look at more ways of tackling it.
Dubai, one of the world’s most prolific players in the gold industry, is assessing plans to see how it can further clamp down on smugglers bringing illicit forms of the precious metal into its country.
This, after Daily Maverick 168 reported last month on how there was a clear link between South Africa and Dubai as a part of a gold smuggling route.
It was reported that over five years, five sets of arrests were carried out at airports in South Africa involving travellers flying either to or from Dubai. They were found in possession of gold bars.
In the latest arrests, three suspects travelling from Madagascar on their way to Dubai were detained at OR International Airport at the start of the year after gold bars weighing 73.5kg, and worth about R67.5-million, were allegedly discovered in their hand luggage.
About a week ago, Ahmed Bin Sulayem, the chief executive officer of the Dubai Multi Commodities Centre (DMCC) – described on its website as a government entity “to enhance commodity trade flows through Dubai” – posted a statement on LinkedIn in apparent reaction to, and referencing, the Daily Maverick 168 article.
He said gold smuggling into Dubai was not as easy as some suggested, and referred to a federal law that stipulated “those involved in the dealing of precious metal or precious stone jewellery without proper hallmarking or certification from authorised institutions will be imprisoned for one year” or fined between roughly R100-million (AED250,000) and R200-million (AED500,000)
“Over the past few years alone, Dubai police have been extremely effective in arresting and prosecuting gold smugglers attempting to either import, export or use the city as a place of transit for illicit means,” Bin Sulayem said.
“Only a few months ago, Dubai police busted a smuggling operation that was using diplomatic baggage as a way of carrying out its activities from Dubai to India.”
He said that because most smugglers preferred to travel via air, “I revisited an idea I had shared publicly at the second DMCC Africa Dubai Precious Metals Forum, held in Accra in 2016, where I openly called for all airlines to place a ban on the hand-carriage of gold.”
“The adoption of a ‘cargo-only’ policy would almost certainly be a giant leap towards solving this issue, not just between Africa and Dubai, but for the wider, global industry.”
Tackling illicit gold smuggling, Bin Sulayem said, would need the support of bodies including the International Air Transport Association (Iata).
Dubai plans to crack down on gold smugglers travelling via SA to the emirate state. (Graphic: SA Revenue Service / SA Police Service)
Iata spokesperson for Africa and the Middle East, Katherine Kaczynska, told Daily Maverick it was up to governments to regulate this area.
“We do work with our members on illicit trade (i.e. wildlife) so we will certainly take up a discussion with DMCC on how best we can work with authorities to efficiently implement existing government regulations on the carriage of gold,” she said.
“It is not, however, Iata’s place to develop a policy such as the cargo-only proposal.”
To further tighten its controls over gold, Dubai was working with the London Bullion Market Association (LBMA), which describes itself as the “global authority for precious metals”.
Bin Sulayem said the “UAE recently joined 11 other gold trading hubs, as per LBMA’s request in support of upholding higher industry standards”.
This tallied with what the LBMA, in a statement, said it had done late last year, when it engaged 12 top international bullion centres “to improve and harmonise sourcing practices in line with industry best practices”.
“The outreach has resulted in favourable responses from all centres.”
Bin Sulayem said the DMCC had started talks relating to workshops to address challenges posed by gold smugglers.
“It would be cheap for me to point fingers at the various flaws within South Africa’s hard working border services or law enforcement agencies for not being more effective, so instead I propose that all jurisdictions that are serious about solving this problem reach out to me and join this initiative as a proactive next step,” he said.
National police spokesperson Vish Naidoo previously said that officers were responsible for trying to control the illegal movement of goods and people across all South Africa’s ports of entry – land, sea and air.
He said police also worked with information provided by liaison officers from Interpol’s member countries.
The United Arab Emirates, under which Dubai falls, is listed as a member country of Interpol. DM
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If UAE is a member of Interpol, why does South Africa ask Interpol to arrest the Guptas?
My exact observation Paddy. It appears South Africa South Africa is a save haven for smugglers of any kind. From Rhino horns, elephant teeth, humans (incl. Bukhiri), abalone, dagga, gold, cars, to the big ones, the billions to the Gupta’s and Chinese, and Zuma and his family. The next one will be Covid vaccines. And no doubt senior Government and ANC officials plays a role to ensure all runs smoothly. I am convince that interpol avoids South Africa like a plague. Who wants to deal with a country as corrupt as this one?
I think you meant “doesn’t”. The Guptas should be on Interpol Red Notices but they still have too many friends in high places in SA. Also UAE, especially Dubai is more interested in it’s own wealth including the banks that are happy to transfer any funds for their percentage.
Atul Gupta’s lawyer is now castigating the SA government for refusing to renew his SA passport! You couldn’t make it up.
A few silly question perhaps, but why should there be controls over the transport of gold and what is illicit gold?
Over the ages gold has been regarded to be a store of value and a medium of exchange. Of itself it cannot be illicit. Governments around the world have sought to control its private ownership. Roosevelt in the ’30’s banned its ownership for the American people. Australia and Britain passed similar legislation. The monetary trilemma is at the heart thereof. Allowing governments to print fiat currency while fixing exchange rates and allowing capital to cross borders clearly does not work.
That gold might have been acquired illicitly is another matter entirely and should be dealt with by the law enforcement authorities. The high-jacked car found in Botswana is not illicit. How it got to be there is.
The London Bullion Market Association (LBMA), describes itself as the “global authority for precious metals”. It is “responsible” for fixing the gold price twice daily. Who gives it the authority to do so?
Anyone out there happy to answer these questions I would greatly appreciate.