Research reveals that billions of dollars worth of African gold are being smuggled into the UAE annually.

• A research report found that up to $35 billion worth of gold produced annually through artisanal and small-scale mining in Africa, which is the world's leading gold producer, remains undeclared and is smuggled out of the country's borders.
• According to SwissAid, approximately 80% to 85% of that gold is exported to the UAE.

In Africa, which is the world's leading gold producer, an estimated $35 billion worth of gold produced through artisanal and small-scale mining annually goes unreported and is then smuggled out of the continent.

According to research by the independent Switzerland-based aid and advocacy organization SwissAid, the majority of it goes to the United Arab Emirates.

The organization's report, published Thursday, stated that over 435 metric tons of gold were smuggled out of Africa in 2022, which is equivalent to more than a tonne a day.

The report stated that the 435 metric tons of smuggled gold, valued at $30.7 billion based on May 1, 2024 gold prices, were mostly imported into the UAE before being re-exported to other countries.

The majority of industrial gold exported from African countries is shipped to South Africa, Switzerland, and India. This type of gold, which accounts for approximately 11% of total gold production, is utilized in various industries such as medicine, electronics, automobiles, aerospace, and defense.

The majority of artisanal and small-scale mining, or ASM, gold produced on the continent is exported to the UAE, according to SwissAid.

In 2022, the UAE, Switzerland, and India were the top three countries for importing African gold, with over 80% of the continent's gold going to these countries, and more than 47% of it going to the UAE alone.

CNBC has contacted the UAE's Ministry of Economy for comment.

The majority of undeclared gold is only declared once it is imported by another country outside of Africa, giving it a legal existence.

If a product enters the international market and is classified as imported in a country like the UAE, it can then be legally exported to other countries, and their laws are often lenient when determining the true source of the metal, according to SwissAid.

In Switzerland, gold re-exported from the UAE is classified as Emirati, regardless of its original place of origin.

"According to Marc Ummel, head of the raw materials unit at SWISSAID and co-author of the study, the situation is problematic because for many years, smuggled gold that may be linked to conflicts or human rights violations has been legally entering Switzerland."

The study by SwissAid involved tracking the movement of a highly sought-after commodity in an industry known for its opacity, where the product is traded and transported across multiple countries during the extraction, sale, processing, re-processing, and refining stages before reaching its final destination.

The research authors quantified the production and trade of gold, both declared and undeclared, for all 54 countries in Africa over a period of more than ten years to reveal unfair practices and negligence on the part of governments and stakeholders, and to advocate for better regulation of the industry.

The report stated that large amounts of gold are smuggled out of Africa, and controls at customs and production sites are inadequate, with some statistics being opaque and others falsified.

"Governments must take responsibility for their actions and increase controls, rather than relying on inadequate data to justify inaction."