The United Arab Emirates (UAE) announced the temporary suspension of operations at 32 gold refineries as part of a sweeping effort to combat money laundering and related financial crimes.

According to Bloomberg, the move comes amid increasing scrutiny of the the country's gold sector, which has been linked to illicit activities, including smuggling of the yellow metal and unregulated gold flows.

The UAE is one of the world's largest gold-trading hubs, with 7,000 traders of precious metals and stones.

The suspended refineries, which account for roughly 5 percent of the UAE's gold sector, will be closed until October 24.

According to the UAE's Ministry of Economy, the suspended refineries were found to be in violation of anti-money laundering regulations. The 256 breaches identified include failures to properly vet customers, inadequate risk assessment procedures and neglecting to screen transactions against terrorism watchlists.

The crackdown also comes after a study published by SWISSAID in May showed that the UAE is the top destination for billions worth of gold smuggled out of Africa each year. In comments to Bloomberg, the country's Ministry of Foreign Affairs said suspicious activity reports related to the gold sector reached 6,432 last year from 223 in 2021.

The UAE also may have been the destination for metal stolen in Canada's largest gold heist.

In April 2023, 400 kilograms of gold valued at over US$20 million were stolen from Toronto’s Pearson International Airport. Investigations by Canadian authorities suggest that a significant portion of the stolen gold was smuggled overseas, potentially bound for UAE and India, although the suspended refineries have not specifically been implicated.

The UAE's Ministry of Economy has stated that the suspensions are part of ongoing efforts to enhance regulatory oversight and align with international standards in the fight against financial crime.