Sections

ideals
Business Essentials for Professionals

Support For Crackdown On Illegal Trade Lend By Gold Trading Hubs Including UAE


12/14/2020


Support For Crackdown On Illegal Trade Lend By Gold Trading Hubs Including UAE
An initiative taken up by the world's most influential bullion market authority aimed at bettering regulations to tackle issues like money laundering and unethical sourcing of gold will be supported by eleven gold trading hubs including the United Arab Emirates.
 
The London Bullion Market Association (LBMA) received positive response to a letter it sent last month laying out regulatory standards from the eleven hubs, LBMA said.
 
In the event of a centre not enforcing the standards, the acceptance of bullion from the centre to precious metals refineries that are accredited by the LBMA could be stopped, says the letter. Such a measure would effectively prevent the erring centres form accessing the mainstream international bullion market because generally the big banks that dominate gold trading market deals in metals only with the refiners that are accredited by the LBMA.
 
Recipients of the LBMA letter were requested to declare their support to the initiative by December 11 and share a plan for implementation of the new regulation by the end of January.
 
"National authorities and other representative bodies have expressed their willingness to collaborate with LBMA," it said in a statement.
 
"We welcome this initiative," UAE Economy Minister Abdullah bin Touq al-Mari said in a statement to the media. "It is a welcome additional step to better understand and address the potential risks in precious metal supply chains."
 
The UAE was "committed to embedding the highest international standards", he said and added that the country would develop a 'good delivery' standard for gold market participants.
 
A committee that will oversee the country’s national anti-money laundering and anti-terror financing strategy will also be formed, ge said and added that this was a "critical national priority".
 
One of the largest gold trading hubs of the world is the UAE. About 1,000 tonnes of gold a year -- worth some $60 billion at current prices is imported by it and exports bullion worth billions of dollars to refiners accredited by the LBMA.
 
The controls of the UAE have been criticised by the Financial Action Task Force (FATF), an intergovernmental anti-money laundering monitor, as well as some non-governmental organsations.
 
Handling gold by refiners from sources that are known to contribute to human rights abuses, conflict, crime or environmental degradation is barred by the LBMA rules. The standards drawn up by the Organisation for Economic Co-operation and Development (OECD) forms the basis of the standards of the LBMA. 
 
Authorities to China, Hong Kong, India, Japan, Russia, Singapore, South Africa, Switzerland, Turkey, UAE, the United Kingdom and the United States were also sent the letter by the LBMA. 
 
Concerns about its timeline and about different centres implementing the rules at different times were raised by some of the respondents, the LBMA said.
 
Small scale and artisanal miners, often working in difficult conditions in unregulated mines, dig up hundreds of tonnes of gold every year. Bullion smuggling networks are worth billions of dollars.
 
(Source:www.usnews.com)