Revelations from the Swiss organization Swissaid: 2,596 tonnes of undeclared gold imported from Africa to the United Arab Emirates between 2012 and 2022.

In a new study on African gold published on May 30, 2024, the Swiss organization SWISSAID indicates that between 321 and 474 tons of artisanal gold are produced each year in Africa without being declared, and at least 435 tons of gold were smuggled from the African continent in 2022 alone. Substantial figures which represent, according to the organization, a significant shortfall for many African states.

For the organization, this lack of state control reflects other problems including corruption, the financing of armed conflicts or the violation of human rights. The report indicates that tracing the journey of gold from its extraction to its final use is not easy. Because, after being extracted, the precious metal will in turn be sold, transported, processed, exported, reprocessed and then resold. And in this process it passes through the hands of many people, in different countries. Before adding that much of the gold trade is opaque. In order to follow the trail of the precious metal, SWISSAID researchers, notably Marc Ummel and Yvan Schulz (responsible for the raw materials file), quantified the production and trade of gold, declared and undeclared, for all 54 countries. of Africa over a period of more than ten years.

Undeclared gold

According to the results, each year, between 321 and 474 tonnes of artisanal gold are produced in Africa without being declared. This equates to a value of between $24 and $35 billion as well as between 72 and 80% of the total production of artisanally mined African gold. The research also highlights a worrying phenomenon, notably gold smuggling in Africa, which continues to grow. It more than doubled between 2012 and 2022. According to the authors of the study, these figures are all the more important when we know that gold is the main source of revenue for many African states, a tool of financing of armed groups and the cause of serious human rights violations and environmental degradation. “Shedding light on the African gold trade is essential in order to hold States and industry accountable for their responsibilities”explained Yvan Schulz, project manager at SWISSAID and co-author of the study.

True origin hidden

The study clearly showed that Switzerland is one of the three main African gold importing countries, alongside the United Arab Emirates (UAE) and India. And to continue that in 2022, Switzerland is responsible for 21% of direct imports of African gold abroad. In addition to direct imports from Africa, Switzerland also imports a significant quantity of gold from Dubai (more than 1,670 tonnes of gold between 2012 and 2022). The UAE has no mines on its territory, so it also imports gold, much of it from Africa. But this gold is not always declared.

The study reveals that between 2012 and 2022, 2,596 tonnes of undeclared export gold were imported from Africa to the UAE. Due to Swiss legislation, which makes the last place of processing the place of origin, gold imported from the UAE is considered Emirati even if its actual origin is elsewhere, for example in Africa.

“This situation is problematic, because for many years smuggled gold potentially linked to conflicts or human rights violations has landed in Switzerland, completely legally,” lamented Marc Ummel, head of the raw materials unit at SWISSAID and co-author of the study.

Four of the nine largest refineries present in Switzerland

The authors note that Switzerland has a real role to play in this situation. Because it has four of the nine largest refineries in the world on its territory and sees between a third and half of the world’s gold imports pass through. If it legislated more strictly on these imports, it would have a real impact on the global gold trade. The customs law which is to be debated in Parliament in the fall is an opportunity to be seized to strengthen the legal framework and improve the traceability of raw materials. For this, the study is timely and SWISSAID hopes that it will tip the scales for stricter legislation likely to improve the living conditions of populations in the South. Summary Boubacar Païtao

Four questions for Marc Ummel and Yvan Schulz, authors of the study:

What exactly were you interested in in your new study?

Yvan Schulz: We analyzed the gold flows of each of the 54 African countries. To do this, we collected data on gold production, exports and imports from African countries and compared this data with African gold imports reported by importing countries (which are almost exclusively non-African countries). ). This is an important aspect, because undeclared gold represents a loss of income for African states. They cannot invest these revenues in public services such as education or the health system.

What surprised you most about your research?

Marc Ummel : Several things. The quantity of undeclared gold in Africa is, for example, much higher than previously assumed and certain importing countries, including Switzerland, have gaps in their legal framework which make importation possible and probable. undeclared gold or from conflict zones.

We were also surprised to see that certain African states which produce a lot of gold record practically no exports officially, while others which produce little export some. This shows that the strengthening of legislation and the increase in controls at the level of non-African importing countries, as important as it is, are not enough to resolve the problems that arise; all work must also be done in Africa itself, in particular at national and regional levels.

Why did SWISSAID undertake this study?

MU: By documenting illegal gold flows, undeclared exports and laundered quantities, and pointing the finger at the countries involved, we are increasing the pressure for effective guidelines to finally be promulgated!

But the goal goes well beyond regulation; Ultimately, this should make it possible to improve the working and living conditions of millions of artisanal miners and their families, increase the revenues of African states and fight against attacks on human rights and the environment.

This study is therefore the continuation of our development activities in the field and concretely contributes to moving the lines.

What does this study bring to the gold sector?

YS: Our study concerns a phenomenon that is already known, but the extent of which until now we could only imagine. By looking at the African continent as a whole and quantifying all gold flows, SWISSAID was able to prove that African gold smuggling was much more significant than previously assumed.

More generally, the study has significantly increased transparency in the African gold trade, which will force policymakers in the countries concerned and other decision-makers to strengthen legal frameworks, customs controls and requirements. regarding corporate due diligence.

Directed by Boubacar Païtao

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