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Other data suggests the true figure may be even higher. Russian customs records obtained earlier this year by Reuters showed that the UAE had imported 75.7 tonnes of gold from Russia worth a total of $4.3bn in the year since the war in Ukraine began. This was 58 times the volume by weight that was imported across 2021.
The UAE was by far the largest destination for Russian gold, followed by China (primarily via Hong Kong) and Turkey, which each imported around 20 tonnes.
This data suggests sanctions on Paloma Precious are hitting only the tip of a very large iceberg.
Based on the customs records, the $300m in Russian gold traded by Paloma is equivalent to only about 7pc of the total that entered the UAE in the first 12 months of the war.
The majority of the world’s gold refineries are accredited by the LBMA, which means they have to prove the source of every gram of gold handled and are subjected to annual external audits. LBMA-accredited refineries account for around 90pc of annual mined gold production around the world.
But in the recycled gold sector there is less oversight. LBMA-accredited refineries cover about 50-60pc of recycled gold production.
It is the recycled gold that makes up the bulk of the UAE’s market. In the UAE, there are three or four major gold refineries. None are accredited by the LBMA.
Until July this summer, the Emirates Gold refinery was an affiliate member of the LBMA. But after the LBMA completed a due diligence review this summer, it suspended the refinery’s membership “until further notice”. The suspension is understood to be driven by suspected links to Russia.
Separately, the UAE also blocked Emirates Gold from delivering into Dubai’s gold market after it failed to meet standards for responsible sourcing and anti-money laundering.
The beneficial owner of Emirates Gold is Paloma Precious. In September, London-listed Rockfire Resources announced a deal to acquire 100pc of Emirates Gold, provided it was reinstated to the UAE’s good delivery list. Rockfire has since said it is taking urgent legal advice to determine the impact of UK sanctions on the transaction.
Paloma Precious did not respond to a request for comment.
Because the UAE has no sanctions on Russia, Putin is free to export Russian gold to these refineries. Russia’s reliance on friendly countries such as the UAE to wash its gold mimics the way Putin has managed to circumvent the G7 oil price cap by building a “dark fleet” of tankers operating outside the Western insurance market.
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