dubai’s problematic gold trade - dubai’s role in facilitating corruption and global illicit financial flows

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analysis publications popular projects blogs sada strategic europe diwan china financial markets experts a b c d e f g h i j k l m n o p q r s t u v w y z global directory programs programs projects events topics regions and countries issues return to dubai’s role in facilitating corruption and global illicit financial flows dubai’s problematic gold trade shawn blore marcena hunter among the world’s major gold trading hubs dubai is a relatively new player yet it is savvy enough to pursue previously untapped markets and ambitious enough to frequently cut corners to bring gold to the market published july 07 2020 resources print page sign up for a weekly newsletter from the carnegie endowment for international peace if you enjoyed reading this subscribe for more email address submit thank you check your email for details on your request table of contents introduction jodi vittori the political economy of dubai kristian coates ulrichsen dubai free trade or free-for-all lakshmi kumar dubai’s problematic gold trade shawn blore marcena hunter dubai’s vulnerability to illicit financial flows peter kirechu the illicit allure of dubai’s luxury real estate market peter kirechu jodi vittori how emirati law enforcement allows kleptocrats and organized crime to thrive karen greenaway the uae’s kafala system harmless or human trafficking mustafa qadri the kabul to dubai pipeline lessons learned from the kabul bank scandal brian george challenges and recommendations jodi vittori matthew t page appendix uae free zones abbreviations about the authors table of contents among the world’s major gold trading hubs dubai is a relatively new player yet it is savvy enough to pursue previously untapped markets and ambitious enough to frequently cut corners to bring gold to the market the uae’s share of world gold trade in 2018 is evidence of just how successful this strategy has become 1 as late as 1996 the uae did not even appear among the world’s top one hundred gold-importing countries two decades later the uae ranked among the top four above hong kong and the united states see table 2 of the eleven gold refineries in the uae the majority are located in dubai this accords with the dubai multi commodities centre’s dmcc own statistics which show that dubai is responsible for about 80 percent of the total uae gold imports and exports measured either by volume or value 2 table 2 top gold-importing countries in 2018 by weight rank reporting entity weight kilograms trade value unit value per gram 1 switzerland 2 248 611 63 321 203 855 28.16 2 china 1 121 317 45 805 882 835 40.85 3 india 945 060 31 756 390 865 33.60 4 united arab emirates 923 247 27 672 052 091 29.97 5 china hong kong sar 665 575 23 627 497 773 35.50 6 united kingdom 629 049 25 564 378 411 40.64 7 singapore 338 389 13 514 112 543 39.94 8 turkey 299 556 11 300 396 230 37.72 9 usa 232 441 9 641 469 104 41.48 10 italy 158 703 4 056 681 077 25.56 source un comtrade database accessed april 17 2020 https comtrade.un.org data data reflects the gold classified under hs commodity code 7108 laundering artisanal gold what is most problematic about the uae’s strategy is where it gets its gold other major gold hubs source the bulk of their gold from relatively few countries typically either other gold hubs or other major gold-producing nations according to un comtrade data for example in 2016 the united kingdom uk imported about 1 208 tons of gold from just six countries listed in descending order switzerland canada south africa hong kong australia and the united states by contrast in 2016 the uae imported gold from more than one hundred countries mainly located in africa south america or south asia less likely to be engaged in traditional large-scale gold mining many of these countries are better known for artisanal and small-scale gold mining asgm characterized by low capital inputs the use of traditional technologies heavy demand for labor and poor or absent government regulation asgm is nonetheless an important source of income for the rural communities shawn blore shawn blore previously a journalist is now an independent consultant specializing in the areas of natural resources supply chains smuggling and clandestine financial flows yet in some parts of the world—notably the democratic republic of congo sudan and venezuela—asgm gold is sometimes taxed by or otherwise used to benefit illegal armed groups conducting insurgencies or is implicated in gross human rights violations for this reason asgm gold is sometimes characterized as a conflict mineral even in countries that are not afflicted by civil conflict or atrocities asgm is often impacted by weak or nonexistent government oversight illegal exportation and smuggling for these reasons gold is subject to many different—and often overlapping—sourcing chain of custody and due diligence standards 3 the specific elements of these standards vary but all of them require that—at a minimum—those countries sourcing asgm gold be able to determine whether the gold originated in a conflict-affected or high-risk country or is otherwise associated with gross human rights violations some tighter standards add additional criteria such as the absence of child labor holding of a legitimate mining title and proof of legal export given the difficulties in assuring the clean origins of asgm gold reputable refiners tend to avoid it altogether asgm artisanal and small-scale gold mining gold hand carried into dubai is almost always sold in the emirate’s gold souk rather than by major refineries in practice dubai follows few if any of these standards asgm gold hand carried into dubai is almost always sold in the emirate’s gold souk—a compact area of a few city blocks where hundreds of small dealers compete to buy and sell gold in all its myriad forms—rather than by major refineries officially the dmcc requires gold dealers operating in the emirate to have a written due diligence policy that aligns with standards of the organisation for economic co-operation and development oecd but there is little or no enforcement of this requirement 4 dealers buying gold to sell in the souk require only a single document—a uae customs form—that proves the gold was legally declared to customs officials upon arrival at an emirati airport the form does not require information about the gold’s origin 5 these dealers therefore accept gold originating from any country regardless of the production circumstances no questions asked 6 they habitually record their purchases of asgm gold as scrap a practice that even some refineries have exhibited 7 this accounting sleight of hand completed souk dealers can then sell this gold to dmcc buyers or uae refineries having sufficiently clouded its origins to satisfy their auditing requirements 8 this lack of due diligence and dubai’s efforts to cater to asgm producers helps explain the uae’s rapid rise as a major global gold hub far from competing with the traditional gold centers dubai does what other hubs will not—or legally cannot—do it accepts asgm gold from producer countries that—because of oecd and other standards—more respectable hubs avoid an analysis of the uae’s imports in 2016 showed that at least 46 percent of its gold supply came from countries that would be red-flagged by the oecd as being conflict-affected or high-risk countries had their country of origin been recorded rather than the country through which the gold transited for example gold from the democratic republic of congo drc and south sudan are both commonly trafficked through uganda thus disguising its origins and resulting in it being considered ugandan gold from a regulatory standpoint the process of reselling asgm gold freely exported from red-flagged sources to dubai jewelers and refiners via the emirate’s bustling souk essentially launders illicit asgm gold into a refined product that is acceptable to the world’s most reputable gold hubs as shown in table 3 switzerland and india imported a total of more than 200 tons or just over 8 billion in uae gold doré in 2016 table 3 gold exported by the uae in 2016 by weight rank reporting entity weight kilograms trade value unit value per gram 1 switzerland 148 423 5 922 940 937 39.91 2 india 59 548 2 136 789 719 35.88 3 turkey 42 952 1 444 004 799 33.62 4 bangladesh 42 808 306 054 164 7.15 5 morocco 39 714 1 089 176 0.03 source un comtrade database accessed april 17 2020 https comtrade.un.org data data reflects the gold classified under hs commodity code 7108 a second and comparably large portion of uae gold is exported as jewelry often to developed countries where conflict minerals laws should be more rigorously enforced as shown in table 4 the uae exported just over 323 tons of gold jewelry worth some 11.5 billion in 2016 most of this jewelry went to iraq and india but almost 500 million worth of jewelry made its way to the united states and a total of nearly 700 million worth made its way to italy the uk and germany—countries with legislation regulating the import of gold from conflict-affected countries table 4 gold jewelry exported by the uae in 2016 by weight rank destination weight kilograms trade value unit value per gram of total weight 1 iraq 79 459 2 600 224 360 32.72 25 2 india 53 292 1 600 353 586 30.03 16 3 iran 19 815 594 195 871 29.99 6 6 italy 13 136 354 293 022 26.97 4 11 usa 8 553 468 594 559 54.79 3 17 switzerland 4 648 530 450 196 114.12 1 19 uk 3 585 211 440 949 58.98 1 20 afghanistan 3 030 100 422 757 33.13 1 24 germany 1 590 52 963 233 33.31 0.5 27 canada 1 478 38 962 628 26.34 0.5 source un comtrade database accessed april 17 2020 https comtrade.un.org data data reflects gold jewelry classified under hs commodity code 711319 in summary the uae imported over 971 tons of gold worth some 32 billion in 2016 and nearly half of this gold came from red-flagged sources it also exported 846 tons jewelry and gold combined worth 28 billion—much of it to countries that would have been prevented from directly purchasing this problematic gold because of domestic laws for example the united states’ dodd-frank act and the eu conflict minerals regulation or other standards for example those set by the oecd and london bullion market association these statistics make clear that dubai is a conducive place for laundering asgm gold the dmcc is it a serious watchdog established in 2002 the dmcc is dubai’s quasi-private regulatory body for precious metals and gems a fundamental challenge to the dmcc is its dual role of regulating the sector and promoting and facilitating trade there is an inherent conflict of interest when efforts to increase trade involve relaxing regulation the dmcc established the dubai good delivery dgd standard in 2012 and the dmcc rules for risk based due diligence in the gold and precious metals supply chain in 2016 these actions brought the dmcc’s standards closer in line with the core principles of the oecd due diligence guidance for responsible supply chains of minerals from conflict-affected and high-risk areas the dgd standard includes technical standards for gold purity and now also a requirement for the responsible sourcing of gold in accordance with the dmcc rules 9 refineries wishing to achieve or retain dgd status must pass a periodic audit and publish a public assurance report unfortunately the dmcc’s dubai multi commodities centre’s sourcing and due diligence requirements are entirely voluntary and thus easily ignored unfortunately the dmcc’s sourcing and due diligence requirements are entirely voluntary and thus easily ignored only three of eleven refineries in the uae have made themselves dgd compliant the other eight refineries operate without any independent check on their sourcing yet these noncertified refineries all claim on their websites to adhere to dgd or oecd due diligence rules on sourcing many also post compliance reports by auditors of some stripe purportedly showing their compliance in table 5 these are labeled as self-certified table 5 gold refineries in the uae refiner location current accreditation former accreditation al etihad gold refinery dubai dubai good delivery not available international precious metal refiners sharjah dubai good delivery not available emirates gold dubai dubai good delivery limited assurance report up to 2018 dijllah gold sharjah self-certified removed from dubai good delivery status in 2018 gold standard dubai self-certified not available gulf gold refinery sharjah self-certified removed from market deliverable brand status in 2017 istanbul gold refinery precious metals dubai dubai self-certified not available kaloti precious metals dubai self-certified removed from dubai good delivery status in 2015 al ghurair gold refinery dubai self-certified removed from dubai good delivery status in 2010 vgr gold refinery sharjah self-certified not available fujairah gold fujairah self-certified removed from market deliverable brand status in 2019 sources dmcc dubai good delivery status list https www.dmcc.ae application files 4915 8729 0026 dgd_list-_gold_alphabetical_-final-16-04-2020_version_22.pdf accessed april 18 2020 dmcc market deliverable brand status list https www.dmcc.ae application files 5215 7795 6905 mdb_list_-_gold_alphabetical_-_final-v7.pdf accessed april 18 2020 given this patchwork of standards and the dubious practice of self-certification the rigor of local audit processes remains questionable in 2013 a whistleblower alleged that his then employer—international auditing firm ernst and young—colluded with kaloti jewelry international and the dmcc to conceal the sourcing of gold from high-risk or unknown sources 10 under newly revised rules kaloti jewelry international subsequently passed that audit but was later removed from the dgd list in 2015 11 the firm has strongly denied media reports about these allegations asserting that they are full of contradictions and inaccuracies and rejects any implication relating to regulatory non-compliance in the gold trade 12 nevertheless in april 2020 a uk judge awarded almost 11 million in compensation to the whistleblower finding that his former firm had breached its professional duties in its handling of the 2013 audit of kaloti jewelry international ernst and young says it will appeal the ruling 13 dubai-based refineries also frequently trade with each other creating yet another loophole in global supply chains this self-regulation appears to satisfy their customers this is perhaps because with one exception the noncertified refineries all make it clear that they do not source mined gold 14 all of their gold they claim comes from jewelry scrap and sources within dubai but this likely means that these refineries only buy gold through the souk—of which most is considered laundered for these refineries’ buyers though the claim appears to be enough the identity of these buyers—for example which firms in india or switzerland purchase from which dubai refineries—remains a mystery marcena hunter marcena hunter is a senior analyst at the global initiative against transnational organized crime where she has worked since 2012 these problematic practices therefore beg the question does the dmcc give false legitimacy to gold flowing through the jurisdiction from high-risk sources fly by night how gold is smuggled into dubai figure 4 shows the cumulative contribution of the most significant african sources of the uae’s gold imports from 2008 to 2016 15 particularly notable—in addition to the vast growth in volumes of uae-bound gold—is the lack of any geographic pattern gold travels to dubai from all regions of africa—basically from anywhere with an airport gold bound for the uae travels overwhelmingly by air 16 most of this gold is hand carried by individual couriers who usually carry 2–20 kilograms with 10 kilograms being a typical parcel 17 dubai airport is now the world’s busiest by passenger volume many if not most african capitals are serviced by direct flights to the uae even better these flights are often under five hours in duration and generally cost less than 500 meaning a gold courier can reach dubai in a single day’s travel for the cost of approximately 10–12 grams of gold the uae’s geographical position and extensive air links to africa are one of dubai’s legitimate competitive advantages in the gold trade the uae’s laissez-faire customs process is a second somewhat less legitimate competitive advantage as noted above most gold is hand carried to the uae by air gold couriers like other air passengers are subject to security screening including x-rays which make gold ingots exceedingly obvious given this african nations that serve as export points for gold would seem to be in a position to enforce their export laws and regulations particularly those pertaining to royalties and yet the opposite appears to be the case the uae’s laissez-faire customs process is a second somewhat less legitimate competitive advantage figure 5 compares the volumes of gold legally declared and exported from the eleven nations of the international conference on the great lakes region icglr blue columns with the volumes of gold arriving in the uae from these same nations red columns 18 according to the results shown the price of gold quadrupled between 2003 and 2011 from some 12 per gram to over 50 per gram and the volume of gold imported to the uae red columns shot up in tandem from some 4 tons in 2003 to more than 28 tons in 2011 mysteriously however gold legally declared and exported from these same countries declined precipitously year over year during that same period the difference between the blue and red columns—in other words the volume of gold legally exported and the volume of gold arriving in dubai—represents the volume of gold smuggled from these nations to dubai in 2011 the difference amounted to some 22.5 tons or 1.1 billion dollars in smuggled gold assuming an export royalty rate of just 2 percent this represents a tax loss to these countries of about 22.5 million per year this figure illustrates african exporters’ increasing expertise at evading export controls while techniques vary from one country to another the need to pass gold through airport x-ray machines depends on some sort of arrangement with the airport security staff at the exporting airport several gold couriers who regularly make the trip from bunia in the drc to entebbe in uganda and then on to dubai informed the author that these arrangements are put in place beforehand by the courier’s boss who deals with officials at a higher level than frontline airport security staff the couriers reported that x-ray machines at entebbe airport have indeed detected their gold but the gold was subsequently passed on to a supervisor who then facilitated the couriers’ passage and the gold through to the airport departure lounge 19 these couriers were not privy to the details of whatever financial arrangements might have been made to facilitate this passage 20 once past security and on the plane all need for deception is past on arrival in the uae couriers declare their gold to customs authorities there is no tax and fill out and sign a gold import form listing among other things an unverified self-reported claim about the gold’s country of origin sometimes couriers are asked to show their boarding pass as proof of the gold’s origin but this is rare 21 form in hand couriers are free to sell the gold wherever they want in dubai or elsewhere in the uae typically the gold is sold in the dubai gold souk as noted above souk dealers record these purchases as scrap gold which provides a suitable paper trail for selling this gold on to one of dubai’s gold refineries dubai a smuggler’s gateway dubai’s role as a financial center and its lax regulation of the gold trade favorable geographic position between asia and africa and access to free trade zones have all contributed to dubai’s growing reputation as a node of corruption this is evidenced by the increasing crossover of smuggling gold laundering and tbml activities involving africa and dubai gold is smuggled to dubai and the profits are used to purchase goods for import to africa often after being misinvoiced and then sold for a profit creating double the opportunity to raise illicit funds globalization is exacerbating the problem as many countries are struggling to update regulations in line with the exponential growth of global trade meanwhile free trade zones help criminal actors take advantage of the regulatory loopholes a 2010 fatf study identified a number of endemic weaknesses that make free trade zones vulnerable to money laundering including relaxed oversight lack of transparency absence of trade data and limited systems integration 22 dubai’s gold-oriented free trade zones are thriving in 2018 the dmcc welcomed 1 868 new companies to its zone marking a 12 percent growth 23 gold traders use the hawala system extensively for the purposes of tbml 24 the hawala system is a centuries-old informal financial system that allows money to transit countries without currency actually moving usually by linking money flows with the import and export of goods a combination of loosely regulated gold imports poor oversight of free trade zones trade misinvoicing and the flow of currency via informal systems like hawala are a boon to trade-based money laundering networks the hawala system is a centuries-old informal financial system that allows money to transit countries without currency actually moving usually by linking money flows with the import and export of goods dubai’s illicit and licit traders alike also enjoy favorable tax rates in 2017 the uae levied a 5 percent value-added tax on gold and diamonds at the wholesale level however after gold traders subsequently had their worst months ever—reported sales fell 30 to 40 percent from the year before—the uae rolled back the tax in 2018 restoring dubai as a leader in global gold trading 25 negative impacts of the illegal gold trade numerous harmful impacts stem from the illegal gold trade which is heavily facilitated by how easy it is to launder gold through dubai in particular protection economies—where the state businesses community actors and organized crime are all interlinked and use corruption and violence to secure illicit rents—are especially problematic they undermine the rule of law stability and security corruption is nearly ubiquitous in the asgm space but violence can also be found often in some combination with corruption unsurprisingly corruption at the highest levels inflicts the most damage to governance and rule of law politicians may use proceeds of gold-related corruption to fortify political patronage thereby securing power and the ability to continue to profit from the gold trade for example in zimbabwe the benefits of asgm are not just enjoyed by high-level members of zimbabwe’s ruling party but are also allocated to its core supporters the result is a mutually beneficial relationship with politicians seeking to gain the support of agsm operators this prevents members of the opposition party from engaging in the asgm sector this has a particularly strong impact in zimbabwe where gold is an important sector of the economy and few comparable alternative livelihoods exist forcing individuals to support the ruling party in order to eke out a livelihood high rates of corruption enable actors to exploit the gold sector with impunity and make it difficult for interventions such as those aimed at formalization to penetrate the asgm sector 26 there is also evidence of gold being sold either indirectly or directly via dubai contributing to insecurity and conflict in africa this benefits conflict actors in the region many of whom are increasingly profit-motivated rather than ideologically driven persistent insecurity spurred on by these armed groups enables them to continue to profit from illegal activities—including the illicit gold trade—unimpeded thus because it is easy for conflict actors to move gold to and find buyers in dubai the trade continues to contribute to insecurity and conflict for example there is evidence of direct illicit gold trade between sudan and the drc and dubai in the drc numerous reports by the un group of experts find that asgm provides the most significant and continual financial benefit to drc-based armed groups and organized criminal networks they have also identified the central players responsible for the organized smuggling of congolese gold to dubai but these players continue to export gold without the imposition of administrative or legal sanctions by either the exporting countries or dubai 27 likewise since 2011 asgm has been closely linked to conflict and competition for illicit rents in the darfur region of sudan in 2016 the un group of experts estimated that the jebel amir mines—darfur’s largest gold field—were yielding 8 571 kilograms of gold per year valued at 422 million today the gold mines are controlled by mohamed hamdan dagolo hemeti deputy chairman of sudan’s ruling sovereignty council investigative journalists found that a minimum of 57 tons of gold were exported from sudan to dubai during 2012 the mined gold was reportedly classified as scrap gold to disguise the high-risk source of the mineral 28 policy and enforcement remedies dubai is entitled to be a major world gold hub the emirate’s ideal geographical location excellent access via air and competitive marketplace allow its gold dealers to offer higher prices and faster turnarounds—to the benefit of both buyers and sellers however dubai’s role in the global gold trade is problematic due to emirati authorities’ lackadaisical approach toward traders’ due diligence and responsible sourcing obligations without requiring any kind of export license or certificate of origin for hand carried parcels the uae has essentially allowed gold smugglers to try and avoid legitimate government royalties or export taxes as a direct result smuggling of african gold has become the norm not the exception depriving african nations of millions of dollars of needed revenue the uae’s lax due diligence policies have also made dubai the destination of choice for african exporters looking to launder conflict gold the uae’s lax due diligence policies have also made dubai the destination of choice for african exporters looking to launder conflict gold these include armed groups from the drc sudan and to some extent the central african republic and the sahelian countries this in turn has unnecessarily exacerbated or prolonged a number of african civil conflicts fortunately feasible technical measures exist to address these problems to deter smuggling the uae could demand that couriers hand carrying gold produce legitimate export documents export licenses certificates of origin and proof of payment of export taxes royalties from the purported country of export to deter the laundering of conflict gold the uae and dubai authorities could work with african nations—particularly icglr countries—to develop a system that requires mineral exports to have a certification attesting to their conflict-free status to further deter the illicit gold trade the uk and united states could impose discretionary travel and financial sanctions on those dubai-based businesses and individuals that facilitate it to foster the adoption and implementation of the oecd due diligence standards dubai could demand that refineries adhere to the dgd standard as a condition of operation to discourage laundering of smuggled and conflict gold through the dubai souk the dmcc or another appropriate dubai authority could develop an oecd-type system of due diligence for souk dealers and insist on its adoption as a condition of operation most of these technical measures would be relatively easy for uae authorities for example customs departments and the dmcc to implement what is lacking is the political will to attempt them numerous entities ranging from nongovernmental organizations to the oecd have tried to constructively engage uae and dubai authorities on these issues with limited to no effect the reasons for the uae’s reticence to take action are not entirely clear certainly the current laissez-faire model is working if gold volumes are the yardstick but a uae that insists that exporters pay taxes and that importers perform due diligence would still be a uae with comparative advantages including its geographical location access via air and established marketplace unfortunately uae authorities appear untroubled by the fact that dubai has become a major hub for laundering asgm gold instead of becoming a responsible member of the world’s gold community the uae is essentially facilitating tax evasion and indirectly perpetuating conflict within its supplier countries disabusing the uae of its current business strategy ultimately will require some degree of external pressure notes 1 figures in this section are drawn from the un comtrade database gold here refers to hs code 7108 including its three sub-components 710811 710812 and 710813 for most countries the bulk of the traded gold falls into the 710812 categories the united kingdom however classifies the bulk of its gold imports under 710813 using the global 7108 category captures all of this trade 2 our gold services dubai multi commodities centre dmcc https www.dmcc.ae gateway-to-trade commodities gold 3 chief among these are the oecd due diligence guidance for responsible mineral supply chains the measures outlined in section 1502 of the u.s dodd-frank act the responsible jewelry council certification standards the conflict-free standard of the world gold council and the responsible gold guidance of the london bullion market association 4 hunter pulling at golden webs 5 this is for hand-carried gold for air-freighted gold four documents are required an import declaration airway bill delivery order and original invoice none of these however is an export permit or certificate of origin in any case most gold is now hand carried see alan martin and bernard taylor all that glitters is not gold dubai congo and the illicit trade of conflict minerals partnership africa canada may 1 2014 14 https www.africaportal.org publications all-that-glitters-is-not-gold-dubai-congo-and-the-illicit-trade-of-conflict-minerals 6 shawn blore contraband gold in the great lakes region in-region cross-border gold flows versus out-region smuggling partnership africa canada may 2015 27 https impacttransform.org wp-content uploads 2017 09 2015-may-contraband-gold-in-the-great-lakes-region-in-region-cross-border-gold-flows-versus-out-region-smuggling.pdf 7 ibid 28 8 city of gold why dubai’s first conflict gold audit never saw the light of day global witness february 2014 http www.globalwitness.org sites default files library dubai_gold_layout_lr.pdf 9 accreditation initiatives dubai multi commodities centre dmcc https www.dmcc.ae gateway-to-trade commodities gold accreditation-initiatives 10 according to global witness kaloti jewellery international dmcc kji and kaloti jewellers factory ltd the refinery are subsidiaries of the kaloti group kji is responsible for the management of all aspects of the physical precious metals business in the uae see global witness city of gold and martin and taylor all that glitters is not gold 11 active dubai good delivery members dubai multi commodities centre https www.dmcc.ae application files 3615 6259 4701 dgd_list-_gold_alphabetical_-final-07-07-2019_version_18.pdf accessed february 24 2020 12 kaloti response to media reports kaloti precious metals undated http www.kalotipm.com media-center-pressreleases-details 13 kaloti--response-to-media-reports 13 jane croft and tabby kinder ey ordered to pay 10m to dubai whistleblower financial times april 17 2020 https www.ft.com content ff29cc66-d77b-472e-bf5f-fb364e82333a 14 the exception kaloti admits it sources gold dore from mined sources worldwide 15 hunter pulling at golden webs 16 hunter pulling at golden webs and blore contraband gold in the great lakes region 22 17 blore contraband gold in the great lakes region 22 air freight was in common use at least from entebbe airport until one trader had over 14 kilograms of gold stolen from a dubai-bound air freight container since then traders in east africa have largely relied on hand carrying gold author communication with a kampala gold trader kampala september 2014 18 blore contraband gold in the great lakes region 22 19 author communication with bunia gold couriers bunia may 2015 20 a supervisor for aviation security claims that security staff regularly detect gold in small amounts 1–5 kilograms and that gold that is not declared is seized however he could provide no corroborating data on gold seizures this supervisor also admitted that collusion with gold smugglers does sometimes occur but that management was working to eliminate this problem author communication with an aviation security official entebbe airport september 2014 see also gregory mthembu-salter baseline study four gold trading and export in kampala uganda oecd may 2015 https www.oecd.org daf inv mne gold-baseline-study-4.pdf 21 author communication with bunia gold couriers bunia may 2015 22 money laundering vulnerabilities of free trade zones 15–17 23 dmcc has welcomed 1 868 new companies to its free zone in 2018 gulf news june 23 2019 https gulfnews.com business dmcc-has-welcomed-1868-new-companies-to-its-free-zone-in-2018-1.64790921 24 shedrofsky remittances and trade-based money laundering 25 manoj nair vat charges removed on gold at wholesale level gulf news may 1 2018 https gulfnews.com business vat-charges-removed-on-gold-at-wholesale-level-1.2214957 26 hunter pulling at golden webs 27 ibid 28 ibid table of contents introduction jodi vittori the political economy of dubai kristian coates ulrichsen dubai free trade or free-for-all lakshmi kumar dubai’s problematic gold trade shawn blore marcena hunter dubai’s vulnerability to illicit financial flows peter kirechu the illicit allure of dubai’s luxury real estate market peter kirechu jodi vittori how emirati law enforcement allows kleptocrats and organized crime to thrive karen greenaway the uae’s kafala system harmless or human trafficking mustafa qadri the kabul to dubai pipeline lessons learned from the kabul bank scandal brian george challenges and recommendations jodi vittori matthew t page appendix uae free zones abbreviations about the authors end of document carnegie does not take institutional positions on public policy issues the views represented herein are those of the author s and do not necessarily reflect the views of carnegie its staff or its trustees related analysis from carnegie building momentum in the u.s fight against corruption abigail bellows is russia finally ready to tackle climate change tatiana mitrova president qaïs said has suspended tunisia’s parliament 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Dubai’s Problematic Gold Trade - Dubai’s Role in Facilitating Corruption and Global Illicit Financial Flows - Carnegie Endowment for International Peace

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