UAE to enforce global standards in gold trade

Reuters

The UAE imports close to 1,000 tonnes of gold a year.

By Reuters

Published: Sat 12 Dec 2020, 6:05 PM

Last updated: Sat 12 Dec 2020, 6:13 PM

Eleven gold trading hubs including the United Arab Emirates have declared their support for an initiative by the world’s most influential bullion market authority to improve regulation on issues such as money laundering and unethical sourcing of gold.

The London Bullion Market Association (LBMA) said on Friday authorities in the eleven hubs had responded positively to a letter it sent last month laying out regulatory standards.

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The letter, reported by Reuters, said that if any centre did not enforce the standards, the LBMA could stop precious metals refineries it accredits from accepting bullion from them.

That would effectively block their access to the mainstream international bullion market because large banks that dominate gold trading tend to deal in metal only from LBMA-accredited refiners.

The LBMA letter asked recipients to declare their support by Dec. 11 and share an implementation plan by the end of January.

“National authorities and other representative bodies have expressed their willingness to collaborate with LBMA,” it said in a statement.

Abdulla bin Touq Al Mari, the UAE's Minister of Economy, said in a statement to Reuters: “We welcome this initiative. It is a welcome additional step to better understand and address the potential risks in precious metal supply chains.”

He said the UAE was “committed to embedding the highest international standards” and would develop a ‘good delivery’ standard for gold market participants.

The UAE is one of the world’s largest gold trading hubs. It imports close to 1,000 tonnes of gold a year.