In 2025, consumers and global policy analysts could be forgiven for thinking that all that glitters is…cobalt or lithium. With the intense focus of governments, the private sector, and civil society on the competition for critical minerals that are vital for new technology, it has been easy to forget the role and impact of minerals that do not make the “critical” list. This is, of course, understandable given the rapid development of digital tech as well as the urgency of the climate crisis and the role that minerals on the critical list play in the technologies needed to mitigate it.
But to deal with multifaceted challenges across Latin America, sub-Saharan Africa, and Asia, the international community — and in particular the incoming Trump administration — must be careful not to ignore gold and other elements in the bling world, such as diamonds and colored gemstones, that are both in demand and dangerous. Just this week, the Biden administration illustrated the connection by imposing sanctions on companies in the United Arab Emirates for moving gold to finance the Rapid Support Forces in Sudan, which the administration determined has committed genocide during the conflict, funded partly with the proceeds of that gold.
The role of UAE-based companies in the illicit and conflict gold trade is well-known, particularly in the emirate of Dubai where the trade is based and has grown exponentially. But in recent years, the country has begun to take corrective steps. The question for the next U.S. administration, as well as companies across the gold sector, is what more can be done to build on these measures and ensure that more follow.
The Golden Globe: Winners and Losers
Gold is a leading contributor to economic development across the globe, especially as it has hit record high prices in recent years and had its best year in a decade, according to the World Gold Council. Mined gold is a leading export for more than a dozen countries across sub-Saharan Africa, and a vital commodity in Latin America and parts of East Asia. And that is without mentioning the leading miners of gold in the world: China, Russia, Australia, Canada, and the United States. Gold mining, whether large-scale, medium-scale, or even artisanal and small-scale, provides livelihoods to millions of workers and their families and communities. As a result, it is the focus of innovative development efforts around the world.
At the same time, gold is also a key driver of conflict and crime, having been regulated since the early 2010s as a “conflict mineral” pursuant to a provision in the Dodd-Frank Act. In Sudan, Eastern Congo, and the Sahel, gold is a key finance commodity for warring parties; in Sudan and Mali, in particular, gold is one of the principal interests that benefit the remnants of Russia’s Wagner Group paramilitary force in arrangements with host countries like Mali and the Central African Republic. Gold has been the focus of sanctions by the United States, the EU, and the United Kingdom for corruption and conflict. In 2024 alone, such sanctions have been imposed in relation to Zimbabwe, Venezuela, Nicaragua, and Eastern Congo, as well as extensively for the way gold is contributing to the war effort in Russia.
The World Gold Council, an association of many of the world’s largest mining companies, itself recently issued a report, authored by former Deputy U.K. Prime Minister Dominic Raab, surveying the connections of gold to organized crime, terrorism, and conflict. Gold is helping drive deforestation in the Amazon and has been documented by multiple investigative organizations to be “more lucrative than the cocaine market” for cartels. Finally, gold is the product most connected to child labor, according to the U.S. Department of Labor.
From these opportunities and concerns at the mining level, gold moves to traders and refineries — principally in Switzerland, the United Arab Emirates, and China. Many, but not all, of these refiners are members of the for international markets. From refineries, gold moves to a variety of users, from jewelry to technology to its role in global finance. On the finance side, there is much speculation about the approach China may be taking to gold as the reserve to support a potential BRICS currency, an issue that Donald Trump has already focused on for possible repercussions. So, although the focus of sanctions and other actions is often on the mining side, the incoming U.S. administration should turn its attention to the next stages of the supply chain. Understanding what the UAE, which has been consistently reported as being at the center of the illicit trade, has been doing can be instructive.
UAE Issuing – and Starting to Enforce – New Regulations
In 2022, the intergovernmental body responsible for overseeing anti-money laundering (AML) standards, the Financial Action Task Force, included the UAE on its “Grey List,” which names jurisdictions with “strategic deficiencies” in their AML systems. Oversight of the gold sector was among the issues identified by FATF, and in the wake of the inclusion, the UAE conducted associated with gold. The UAE Ministry of Economy in Abu Dhabi also issued new regulations for the gold sector in late 2022, focused principally on requiring refineries to implement the Organization for Economic Cooperation and Development (OECD) Minerals Guidance, which essentially serves as the global baseline for due diligence. This was a welcome effort, especially in that it provided federal UAE regulatory oversight of the sector, rather than delegating oversight to the trade itself in Dubai.
Throughout 2023, the UAE government engaged refineries, held dialogues and workshops, and promoted the new regulations in international forums. The main focus of the new regulatory system is a requirement that refineries conduct due diligence in line with the OECD Minerals Guidance and submit those reports to the Ministry in early 2024. The UAE also strengthened its oversight of gold refinery implementation of anti-money laundering rules through field inspections.
As a result, the UAE temporarily suspended 32 refineries for 256 total violations (each refinery committed eight violations). These included failing to take measures to identify risks, failing to file suspicious transaction reports, and not checking compliance lists. In general, these are smaller refineries, representing just 5 percent of the country’s gold trade.
But this step was still meaningful. The UAE then announced that, in the course of 2023, fines totaling approximately $21 million had been imposed on the sector, and that suspicious-transaction reporting on gold increased a remarkable 30-fold in 2023, from just 223 in 2021 to an eye-popping 6,432 in 2023. Even if half of those reports were false positives, that is still a stunning increase in such a short period.
Shifting Scrutiny Downstream
In light of the consistent and ongoing reports of the role the UAE and at least some of its traders and companies play in the gold trade — again as highlighted by U.S. sanctions this week related to Sudan — much more could clearly be done by the Emirati government and trade bodies in Dubai. That includes steps such as producing a list of conflict-affected and high-risk areas, as the EU has done, for refineries to use when conducting due diligence; the United States already had identified all gold from Sudan as “conflict-affected” in June 2023, which should have triggered additional scrutiny. The UAE could also take additional steps to adjust its regulatory requirements related to “recycled” gold, which has been consistently identified as a risk area, specifically when newly-mined gold from high-risk areas can be laundered through refineries that mix that gold together with scrap to produce climate-desirable “recycled” gold. Although recycling is important, stronger oversight is needed, as many NGOs and other bodies have noted, to avoid greenwashing.
But these steps by the federal UAE government are still notable and commendable. And they should be matched by an appropriate level of engagement from the rest of the private sector, both at the refinery and end-user level, whether in the Emirates or in the United States or elsewhere. For example:
- Are U.S. jewelry and tech companies with supply chains connected to refineries in the UAE asking questions about the due diligence those refineries are doing, which ultimately will support the measures the UAE government is taking? Such as:
- Are the refineries taking the appropriate steps to ensure they identify risks?
- Have the refineries suspended or terminated relationships with any gold sources because of their concerns, whether related to money laundering or broader risks?
- What information are the refineries able to provide on their gold sourcing and due diligence?
- Have the refineries been subject to investigations by the Ministry of Economy?
- For the many jewelry and electronics companies that focus on use of recycled gold, are they pushing to understand from the refineries more about the material that went into producing the recycled output?
- For example, what are their policies on their production of recycled gold, and what information do they provide publicly about those policies?
- Are the refineries and end users working to connect directly to gold miners, both industrial and smaller-scale, to ensure that source reporting can be more transparent?
In years past, these questions may not have been welcomed either by refineries or companies further down the supply chain. But at this stage, they should be easily integrated and responded to, and in a way that can allow refineries in the UAE (and elsewhere) to ensure due diligence and responsibility is shared by all actors in the supply chain.
And most importantly, the answers to these questions should not just be filed away in tick-box compliance documents; they must lead to different decision-making by companies about where and how they source gold, moving away from the illicit and negative sources that they identify. That is, once they get the information above, do they know what to do with it and how to make appropriate decisions, even if they’re hard choices? Moving even further, can the information obtained on illicit actors be shared with governments, whether in the UAE or in the countries receiving the gold? And can all of the challenges they encounter in seeking to understand gold sourcing actually motivate more direct connection to upstream development programs? That is, due diligence can sometimes lead to “de-risking,” when refineries and companies seek simpler sourcing solutions from only large-scale miners, thus hurting development efforts that aim to support smaller producers and their communities. But with a more integrated and proactive approach to due diligence, can there be more incentives to connect to some of the most challenging regions, where development needs are most urgent?
A Golden Future? These Actions Can Help
These kinds of questions and decisions and the starting direction of the UAE toward greater oversight of its gold trade can help to inform the direction the next U.S. administration and as well as the EU, U.K., and others take on gold. The Biden administration’s approach of prioritizing a range of the above-referenced sanctions actions, advisories, and other measures were important, but they were not sufficient given the ubiquity of gold, its value, and its simultaneous — and to some degree interconnected — significance to both economic progress around the world and also to conflict.
Discerning the priorities of the Trump administration remains a challenge. But it is possible to see gold as a more important factor. First, there is the prominent role of China across the gold industry, as a leading producer and refiner country and with its companies active in sub-Saharan Africa and Latin America. Secretary of State-nominee Marco Rubio has introduced multiple pieces of legislation focused on gold and called it out as a conecrn. And as noted above, gold is at the center of several conflicts the new administration will be spending time to resolve.
A few important and practical steps that the next administration and others can take include:
- Encourage, in line with the U.S. government’s 2021 National Action Plan on Responsible Business Conduct, more thorough and transparent reporting by companies on their public websites of the types of issues and questions mentioned above, whether through frameworks like the Initiative for Responsible Mining Assurance or otherwise.
- Use the convening power of the USA PATRIOT Act Section 314(b) and “FinCEN Exchange” (or, in the U.K., the Joint Money Laundering Intelligence Taskforce) to bring the gold sector and government together to share intelligence and information on bad actors.
- Promote traceability initiatives such as those currently being developed by the World Gold Council and numerous companies.
- Invest in development financing for artisanal and small-scale miners that can empower them to move away from illicit actors, as recently set out by and as demonstrated through the programs of numerous development-focused
- Continue to impose sanctions on actors seeking to frustrate the above objectives and engage in illicit trade.
There is much more to be done given the complex set of issues connected to gold, but steps like these can help stem the flow of illicit gold and allow the international community to see it more as “critical” to development for its positive economic and social impacts rather than as a fuel for illicit markets and conflict.