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The indelicate balance of ethics against profit

29 november 2021

Ahmed Bin Sulayem, Chief Executive Officer at DMCC (Dubai Multi Commodities Centre)

ahmed_bin_sulayem_xx_dmcc.pngI am slightly pained to write this blog, as over the years I've made many close friends and contacts in Switzerland, not to mention worked very closely with several Swiss-based companies as part of our recently launched DMCC Crypto Centre, including Bitcoin Suisse AG, a cornerstone of the Crypto Valley of which I am an avid supporter. DMCC is even home to the Swiss Tower, a 40-storey building whose tenants include some of the best of what Switzerland has to offer, including the Swiss Business Council Dubai & Northern Emirates, amongst other notable companies and organisations. However, following a recent article published on Bloomberg earlier this week, I have felt compelled to call out the Swiss State Secretariat for Economic Affairs, who issued a letter to its "refiners to get strict on UAE gold."

Putting the obvious insult to one side, it appears that Switzerland's leadership needs to ask itself several key ethical questions. Firstly, is playing the type of identity politics that enables refiners to lobby politicians to push their agendas the sort of practice they want to be known for? And is taking a blanket approach to isolating key trading partners such as the UAE, rather than working with them to address specific, evidence-based issues, a credible way to protect its gold industry?

In an official response issued by the UAE Minister of State for Foreign Trade, His Excellency Thani Al Zeyoudi said, "We have long been cooperative with all international regulations and best practices including anti-money laundering efforts and unethical sourcing of gold."

For the benefit of the State Secretariat for Economic Affairs, I'll start by reminding them that DMCC's Practical Guidance enforces all members to implement the OECD Due Diligence Guidance, which is mandatory for all Dubai Good Delivery and Market Deliverable Brand accredited refiners, just as the LBMA's Responsible Gold Guidance enforces the same mandatory policy for its LBMA accredited refiners.

It is perhaps worth noting that several of Switzerland's largest refiners, most infamously Metalor Technologies SA and Argor Heraeus, have both been subject to formal legal proceedings for their respective roles in ecological and human rights disasters in Peru through to financing rebel militias in the Democratic Republic of Congo's civil war. Yet, according to the same Bloomberg article, "Some refiners, including Metalor Technologies SA, don't accept gold from Dubai because of the difficulty in pinpointing its origin…."

In isolating the UAE, you are not only insinuating it remains the only 'nation'; not refiner or specific business, but sovereign country through which illicit African gold is made available to the Swiss market, but furthermore that the OECD guidelines to which it adheres aren't worth the paper they're printed on. Either you accept that the OECD is a standard worth following, in which case you should accept all gold from accredited refiners or none at all.  

As a global refining centre, it is plain to see how Switzerland would benefit from sullying the reputation of the UAE through such statements. Fortunately our well-publicized, and internationally recognised levels of transparency, regulation and action against rule-breakers and smugglers mean that we have earned our place as a gold trading centre by having to go the extra mile to compete with historically prominent centres such as London, whose LBMA was only recently addressed by civil society organisations earlier this year regarding concerns of how its "responsible sourcing programme fails to curtail human rights abuse and illicit gold in the supply chain". Despite such concerns, no further due diligence protocols were requested from the United Kingdom, one of Switzerland's key trading partners. I wonder how Britain would have reacted should the letter issued by the State Secretariat for Economic Affairs told refiners to get strict on "UK Gold"?

As a nation, I am more surprised that Switzerland opted for this nationally targeted approach. Given its morally dubious and irrefutably sordid trading history, which includes using gold to aid the Nazi war effort despite its supposed neutrality, through to its reputation as the de-facto refuge for the illicit funds of dictators and political crooks, most notably Marcos (Philippines), Mobutu (former Zaire), Abacha (Nigeria), Duvalier (Haiti) and Gbagbo (Ivory Coast) and a cast of other nations including Ukraine, Mexico, Tunisia, Egypt, Libya and Malaysia, you'd have thought that attempting to smear national reputations would be something they'd want to keep quiet about. While I'm not sure Switzerland deserves a pat on the back for returning the $1.8bn of stolen or embezzled funds to their respective countries, you would have thought it would, at the very least, be less prone to targeting internationally regulated trading partners and allies given its own, very public history of unethical conduct.

Most offensively, the Secretariat highlighted that its primary concern was to protect the gold industry from accepting illicit African gold from entering the market, a statement that is almost laughable when you learn about the role of Swiss commercial banks in sustaining South Africa's devastating apartheid regime. To quote from the Daily Maverick following the Declassified: Apartheid Profits; "Apartheid survived as long as it did because it was never truly isolated. An international network of economic and diplomatic allies played a substantial role in keeping it afloat. Of the international banks, the Swiss commercial banks were among the most significant and long-standing supporters of the apartheid regime. Not only did they do business with apartheid South Africa, but they also protected the regime by lobbying the Swiss government. In turn, they profited handsomely through the Zurich Gold Pool, which became a central node for the sale of apartheid gold. This relationship was worth protecting. South Africa borrowed money at a premium, and its debt was backed up by gold – gold whose extraction over time has relied on the exploitation of poorly paid black mineworkers working in hazardous conditions to grow the fortunes of a few."

While I'm more than aware that Swiss bankers or politicians' unethical or backhanded decisions are not representative of its people, I'm pleased to see that there are limits to what is tolerated. A great example being the legal case involving its former Attorney General Michael Lauber, whose immunity was waived by the Swiss parliament to pave the way for a special prosecution to initiate criminal proceedings over his handling of a high-profile FIFA investigation. In the same manner, I hope that the individual responsible for issuing the State Secretariat for Economic Affairs statement is aware that attempting to sway global trade on unethical grounds, particularly if that involves the exchange of favour, goods, or money, will eventually end with them in the same court.

It is perhaps fortunate timing that Guy Parmelin, President of the Swiss Confederation, is intending to visit the UAE in the coming weeks; allowing him the opportunity to see first-hand how gold is managed throughout our supply chains, from refiners to retail, not to mention the chance to meet with our vibrant, DMCC-based community of 342 Swiss companies.

As a side note, I should also add that much of DMCC's recent business expansion in Central and South America has been courtesy of the extensive support and good relations held with several members of Switzerland's foreign office community, particularly His Excellency Marcel Stutz, Swiss Ambassador extraordinary and plenipotentiary to the Republic of Cuba and in Jamaica. Such has been the strength of DMCC's collaboration with Switzerland over the past few years; I will make it one of my missions to grow our Swiss community to reach 1,000 companies within two years at the latest.

In the meantime, I look forward to discussing our gold trade in greater depth with Swiss industry stakeholders and how we can work on a more collaborative approach that will better serve the interests of both our nations and the wider industry.