When the choices are uninformed or misinformed, it’s time to start thinking

Before getting into the details of this blog, I have an update from my previous one where I revisited the topic of enforcing airlines to ban hand carry gold, as a step towards making the practice of importing gold via commercial flights without proper certification obsolete. I’m pleased to announce that as an outcome, DMCC is hosting a remote discussion to proactively explore this policy on Thursday 11th March, which already includes the participation of senior members of the Dubai Police, the International Air Transport Association (IATA), the Ministry of Interior, Brinks Security, Dubai Diamond Exchange, DGCX and the Executive Office of the AML/CFT.

As mentioned in several of my blogs and throughout my communication with the international gold community, Dubai and DMCC is open to collaboration, I therefore urge all stakeholders who care about the wider gold industry to listen in and offer their thoughts and advice on how we can tackle the prevailing issues surrounding hand carry and ensure greater transparency in the years to come. For anyone interested in joining, please reach out to events@dmcc.ae and a member of the team will help to coordinate your access. With that said, onto this month’s topic.

In spite of the wishful thinking for 2021 getting started on the right note, that certainly wasn’t the case in the United States, where on 06th January rioters occupied and vandalized the Capitol Building - resulting in five deaths and more than 140 injuries. Just two days later, Twitter took the unprecedented step of suspending the account of a sitting President (@realDonaldTrump) “...due to the risk of further incitement of violence.”, provoking several questions. Firstly, whether the suspension of a U.S citizens' account constituted a breach of their first amendment rights, and secondly - if the given reason is accurate - why inciteful accounts such as the one belonging to Ayatollah Khamenei, who has previously called for the elimination of Israel, is still considered Kosher...and finally, as a social media platform, at what point does its' role as a facilitator for third- party content merge into that of an Editor? All perfectly reasonable questions - to which Twitter’s responses weren’t convincingly received. The debate did, however, reignite the issue of media accountability and why journalists, reporters, bloggers and researchers still appear to be off the hook for publishing or pushing unsubstantiated information, no matter how politically maligned. To quote Denzel Washington in a 2016 interview with the Washington Post, “If you don’t read the newspaper, you’re uninformed. If you do read it, you’re misinformed. What is the long-term effect of too much information? One of the effects is the need to be first, not even to be true anymore, so what a responsibility you all have; to tell the truth, not just to be first, but to tell the truth. We live in a society now where it’s just first, who cares? Get it out there, we don’t care who it hurts, we don’t care who we destroy, we don’t care if it’s true, just say it, sell it. Anything you practice, you’ll get good at, including BS.”

While browsing on Twitter a few days ago, I came across a tweet from JCK news director, Rob Bates who had published a copy of The Sentry’s February 2021 briefing titled, ‘Conflict Gold to Responsible Gold’, along with the caption, “I haven’t read this yet so I don’t know all it says or recommends. But be interested in feedback regardless.” As the News Director of a platform that refers to itself as an ‘industry authority’, I am inclined to believe one of two things - either that an award-winning news director from an international jewellery magazine just happened across an industry report, couldn’t be bothered to read it, but still decided to retweet it - in spite of its’ relevance to his industry/audience, or that he is just symptomatic of the standard of curation we’ve come to expect – an apathetic pusher of propaganda. Given you don’t have to get beyond the byline to read how various sectors ‘are increasingly at risk of purchasing gold via Dubai that benefits armed groups responsible for mass atrocities in multiple countries in East and Central Africa,’ I suspect I know into which camp Mr. Bates falls, albeit he should also be aware of the large amount of jewellery that has historically made its way to JCK Las Vegas from Dubai.

Where the briefing is concerned, I would like to highlight its second recommendation that calls to ‘Strengthen policies and enforcement in Dubai. The UAE government should close the regulatory loopholes that allow for trade in conflict and high-risk gold, in line with LBMA and Financial Action Task Force (FATF) recommendations.’ For anyone who is genuinely interested in why the above statement is so absurd, please read my previous blog, which clearly illustrates why LBMA isn't the association from whom Dubai should be benchmarking its standards or yet another blog that gives factual examples of the hypocritical behaviour that still remains unchecked.

I would also be fascinated to understand why The Sentry has cited LBMA’s initiative, ‘which threatens to cut off gold centers from global supply chains if they do not enact key responsible gold reforms’ as ‘useful leverage’. Just to be clear, LBMA is a trade association with a comprehensive track record of double standards and contradictions. Why an impartial NGO would want to endorse the monopolistic recommendations of such an organisation, I can only guess.

Unfortunately, when it comes to addressing the real problems of corruption or illegal activity in the precious metals and stones markets such as JP Morgan Chase & Co’s record breaking $920 million fine to resolve U.S. authorities’ claims of market manipulation, or police corruption at the highest levels of the Belgian Federal Police Corps, the NGO reports go silent. As entities that proport, in the case of The Sentry, to ‘follow the dirty money’, am I the only one that questions why their source of funding isn’t publicly disclosed?

More worryingly is the absolute lack of action taken to prevent these sorts of crimes being repeated. In the case of the two examples above, making scapegoats out of Michael Nowak, JP Morgan’s former head of precious metals trading and former LBMA board member, and Agim de Bruycker, Former Antwerp Federal Police Commissioner and Head of the Diamond Squad, aren’t long-term solutions for systemic corruption. As a global society, we have to be faster to react to universally unacceptable standards, a case in point, the time taken to remove the statues of Leopold II in acknowledgement of his heinous barbarism in the Congo Free State.

While no jurisdiction is perfect, Dubai can be proud of the fact that it has become a global trading centre, not just because of its location, but because it has consistently understood the challenges it faces and led the way in finding solutions, a great example being Dubai Good Delivery. Introduced in 2005 as a way of guaranteeing quality, DGD added responsible sourcing to the requirements in 2012 in accordance with the ‘DMCC Rules for Risk-Based Due Diligence for Gold and Precious Metals’. As an example of its parity with international standards, an OECD alignment exercise, which was conducted in 2017 – 2018 clearly illustrated DMCC’s responsible sourcing program was equally aligned with LBMA.

Fifteen years on from the launch of DGD and with gold exports representing 29% of the country’s non-oil foreign trade, plans have already been announced to introduce the UAE Good Delivery Standard and the creation of a Federal Gold Platform.

Not resting on its laurels, DGD is continuing to find ways to enhance its standards with steps already taken towards reaching reciprocal agreements with both the Responsible Jewelry Council (RJC) and Responsible Minerals Initiative (RMI), both highly respected, international organisations that share Dubai’s collaborative approach to improving standards for all stakeholders, particularly those countries from where the gold originates. Supplementally, the UAE Cabinet has recently approved the establishment of the Executive Office of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) – a new arm of the UAE’s anti-financial crime system whose activities will add yet another layer of security to our existing standards and policies. Even in other sectors such as the diamond industry, DMCC is continuing its work with Resolve, as well as with individuals such as Ian Smillie, whose long-term involvement has arguably made the biggest impact in stemming the flow of conflict diamonds around the world.

Returning to my invitation at the start of this blog, it is my sincere hope to see as many different stakeholders join us in taking a proactive approach towards enhancing the global gold industry for the better. For those who decide not to join, but continue to criticise without merit, I ask you to remember, “He who throws dirt always loses ground.”