While the UAE has established itself over the years as preferred buyers of African gold, controls on the origin of imported products leave much to be desired.

In the early morning of April 11, 2019, in the early hours of the Sudanese revolution, a private jet landed in Khartoum, carrying an emissary of Sheikh Mohamed Ibn Zayed Al Nahyan (aka MBZ), Emir of Abu Dhabi. Among the objectives of his mission, to preserve Abu Dhabi's influence in the country, and to watch over the future of the gold trade between the two countries.

It must be said that Sudan was one of Dubai's main suppliers of smuggled gold between 2012 and 2018, depriving Khartoum of more than $500 million in tax revenue.

And while the UAE imports more than 450 tons of gold from Africa each year, shipments are subject only to rudimentary forms, after which traders are free to resell their goods.

Privileged links with Khartoum

"The biggest value gap between what Sudan says it exports and what its trading partners say it imports is in trade with the UAE," said Lakshmi Kumar, who led a research team for the NGO Global Financial Integrity. based in Washington DC.

When the tide began to turn for Omar al-Bashir in Khartoum, Dubai had forged close ties with one of the country's new strongmen, Mohamed Hamdan Daglo, known as "Hemetti", number two in the transitional government... and owner, through his family, gold mines in Darfur.

20% of the economy linked to gold

These "privileged links" go far beyond Sudan. Figures from the UN's Comtrade database show that Africa's share of Dubai's gold imports increased from 16% to 50% between 2006 and 2016.

Non-oil trade between Abu Dhabi and African states reached $252 billion between 2011 and 2018, making the country one of the continent's main trading partners.

The UAE is among the ten largest sources of investment in Africa, much of it in the mining sector, including funding for a series of mini-refineries. The gold trade accounts for about 20% of the country's economy.

"Lack of national and international pressure"

Although its main trading platform, the Dubai Multi Commodities Centre, claims to meet the "international criteria" for responsible sourcing set by the Organisation for Economic Co-operation and Development (OECD) – which requires full traceability of traded products – independent studies tend to dispute this point.

In April, the Financial Action Task Force (FATF), a US-based intergovernmental institution dedicated to combating money laundering and terrorist financing, placed Dubai on its watch list, complaining about the limited number of prosecutions for money laundering. Kleptocrats and oligarchs are even less monitored in Dubai than in other destinations such as London and Switzerland.

A lengthy report on Dubai's financial and trade sector, written by the US-based Carnegie Foundation, concludes that the emirate's "highly personalized institutions" and "lack of domestic and international pressure" imply that "Emirati elites are free to resist reforms that endanger their int. anger or their political vision for Dubai and the whole of the United Arab Emirates."

Recognition of Israel

Attempts by Western governments to call on Abu Dhabi to help in the fight against illicit financial flows such as gold smuggling may run up against the need for them to have a reliable ally in the Gulf.

African states will have to make difficult choices to manage the pandemic-induced economic slowdown. Many will seek to reduce revenue losses due to gold smuggling, but they will struggle to tackle the vested interests that benefit from the region's flourishing illicit trade with Dubai.