The Emirates have gradually become more popular, their golden beaches, warm sun and luxurious hotels acting as a magnet to tourists in search of a hedonistic life-style and perhaps some great shopping in the gold souks and the silk shops. All that glisters is certainly gold in the famous souks of Dubai and Doha but the area is increasingly being thought of as a home for illicit gold, smuggled in wrapped in silver. This gold they are now calling 'conflict gold'.
Conflict Gold - a Growing Threat to Security
Conflict gold, like blood diamonds, is a new player on the block and inspectors have to try to intercept the precious metal, often coated in silver to avoid detection by officials
What is conflict gold
Recent reports in major newspapers about the gold being bought and sold in Dubai brings to mind pictures of that city, the gold souks, the sumptuous cars, the jewels worn by the women, the diamond encrusted mobile phone covers in the locked glass showcases in the malls. Truly it is a place of ostentatious wealth where everything that glisters really is gold.
Window in Gold Souk - All that Glisters
by Mari Nicholson
Gold Bars Smuggled in Coating in Silver to Escape Detection
Today’s problem with the gold coming into Dubai is that some of it is what is known as ‘blood gold’ i.e. that mined in conflict areas. Every gram of precious metal has to have documentation but often the gold is bought by unscrupulous dealers, and bought for cash, no questions asked. Under International law this is completely illegal of course, as all gold must come from a licenced mine and have the correct paperwork before it can be accepted by a refinery.
A recent scam has been to coat the gold bars in silver to fool the inspectors who check all imports in order to be able to assure international customers that the gold offered has been responsibly sourced and that there is no conflict gold being distributed. The silver plating can be as thick as 15% of the bar, making it difficult to detect the yellow mass underneath. After being melted down the bars emerge from the refinery as new minted bullion of 99% purity
Gold smuggled from Morocco
One refinery in Dubai alone is responsible for nearly half of all the refining done in Dubai’s enormous gold market. Gold trading in the Emirates in 2012 reached $70bn and in fact, Dubai now rivals London and Shanghai as a gold bullion centre and accounts for approximately 25% of the world’s annual gold trade. It's geographical location with good communication and transport links, is also important.
Gold produced from small artisan, small-scale mines
A lot of the silver-coated gold is coated is smuggled in from Morocco and sold for cash in the souk, but sold as pure gold of course. There are always unscrupulous dealers wherever in the world there is money to be made: gold is no different from any other product.
Some of this gold will undoubtedly have been mined from artisan, small-scale mines (ASMs) which are dotted all over the continent and difficult to police. Not necessarily conflict gold, but the selling of the precious metal in this way from these mines is, nevertheless, illegal. Paperwork avoidance is a boon to many of the smaller labour-intensive, low-tech operations but going down this road leaves them open and vulnerable to extortion by armed groups.
Conflict Gold, a Source for Power
Conflict diamonds, or blood diamonds, have long been a source for weapons and drugs that keep the rebel armies flourishing in Africa. Conflict gold is not a new player on the scene but it is a growing threat.
The Emirates are a favourite place for vacations and stopovers on long-haul trips and now a pick-up port for cruise-ships. Tourist s spend a lot of money in its gold souks and various jewellery outlets in the malls. It is to be hoped that conflict gold does not find its way into any of the shops in these places.