UAE, Russia ties tighten over gold trade

Published May 25th, 2023 - 12:06 GMT
UAE, Russia ties tighten over gold trade
UAE, Russian ties - Source: Shutterstock

UAE, Russia gold trade does not violate US sanctions – Reuters

ALBAWABA – The United Arab Emirates (UAE) has imported 75.5 tonnes of gold from Russia in February 2022 through March 2023, worth AED15.79 billion ($4.3 billion), Reuters reported Thursday.

The UAE’s gold imports from Russia stood at just 1.3 tonnes in 2021, according to the report.

Records, as reported by Reuters, indicate nearly a thousand gold shipments had arrived in the UAE in the year since the Ukraine war started.

Second and third to the UAE are China and Turkey, who imported about 20 tonnes each, between February 24, 2022, and March 3, 2023.

The three countries account for 99.8 percent of Russia’s gold exports in the said period, Reuters highlighted.

A blockade went up on Russian gold exports to Europe days into the war.

The London Bullion Market Association banned Russian bars made from March 7, 2022. By the end of August, Britain, the European Union, Switzerland, the United States, Canada and Japan had all banned the importation of Russian gold bullion.

Official records show, however, that Russian gold producers quickly shifted to other markets, including UAE, Turkey, and China.

It is also possible that Russia’s gold may be finding its way to US, Canadian, European, and Japanese markets regardless of the sanctions.

However, data reviewed by Reuters does not suggest there has been any violation of US sanctions by those countries.

Louis Marechal, a gold sourcing expert at the Organisation for Economic Co-operation and Development, told Reuters that Russian gold could have been melted and recast and then sourced to US and European markets.

"If the Russian gold comes in, is recast by a local refiner, sourced by a local bank or trader and then sold on into the market, there you have a risk," he said. "This is why carrying out due diligence is instrumental to end buyers wishing to ensure they respect sanctions regimes."

In a statement to Reuters, the Emirati government's Gold Bullion Committee said the state operates with clear and robust processes against illicit goods, money laundering and sanctioned entities.

"The UAE will continue to trade openly and honestly, with its international partners, in compliance with all current international norms as set down by the United Nations," it said.

Overall, the UAE and Russia have an openly positive relationship.

Russian military producers reportedly attended exhibitions in the UAE earlier in May.

Washington warned several countries, including the UAE and Turkey, that they could lose access to some markets if they do business with entities subject to US sanctions, Reuters elaborated.

The UAE, meanwhile, has long had a thriving gold industry.

UAE, Russia ties tighten over gold trade
UAE is a major exporter of gold bullions - Source: Shutterstock

Trade data show it imported about 750 tonnes of pure gold a year on average between 2016 and 2021, Reuters reaffirmed. Meaning that the shipments in the Russian records only account for about 10 percent of its imports.

The UAE is a major exporter of bullion and jewellery.

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