Dubai gold center to tighten sourcing supervision
Move comes after allegations the center ignored guidelines designed to prevent human rights abuses
Dubai’s gold trading center said it would tighten supervision of how the metal is sourced after reports in the British media alleging it ignored international guidelines designed to prevent human rights abuses and underground trade by African warlords.
In February, Britain’s Guardian newspaper and the BBC said the Dubai-based Kaloti Group, a major gold refiner and jeweler, had failed to examine suspicious deals, accepting for example 2.4 tonnes of gold from customers who provided no paperwork.
The reports also alleged the Dubai Multi Commodities Centre (DMCC), which hosts the emirate’s gold market, had failed to enforce guidelines against such deals. Both Kaloti and the DMCC denied the reports and said they acted properly.
The DMCC’s chief executive Gautam Sashittal told a conference on Sunday the center would commission an expert advisory firm to conduct a further comparative study of various sourcing protocols and “review the robustness of our process”.
“We want to look the entire reporting and audit process and confirm we are in line with what others are doing,” he said.
“Number two, the DMCC will create an independent body that will further strengthen the independence and integrity of the review process.”
The body will be appointed later this year and include a large proportion of local industry figures, as well as some international experts, Sashittal said.
On the exact role of the body, “it is very early to say that but it could be as narrow as advising us on the outcome of audits, or as wide as encompassing more of what we do with the delivery of certification.”
Sashittal repeated the DMCC had done nothing improper.
“Nothing was wrong and we stand by everything we did.” But he added, “Having said that, because there have been allegations made which are in our view unfounded, we wanted to take that extra step.”
In the past decade, Dubai has become one of the world’s major gold trading centers. Ahmed Bin Sulayem, executive chairman of the DMCC, said on Sunday that in 2013, almost 40 percent of the world’s physical gold trade came through Dubai, while the value of gold traded via Dubai annually climbed to $75 billion from $6 billion in 2003.
Meanwhile, the Dubai Gold and Commodities Exchange (DGCX) plans to introduce a spot gold contract this June as part of its growth as a top trading centre for the precious metal, the exchange’s chief executive Gary Anderson said on Sunday.
The DGCX is in the final stages of finalizing contract specifications, a spokesman quoted Anderson as saying at an industry conference.
The contract is expected to be for 1 kilogram (32 troy ounces) of 0.995 purity gold, the spokesman added. The DGCX already trades gold futures.