LONDON: The world's most influential gold market authority is threatening to stop bullion from countries including the United Arab Emirates entering the mainstream market if they fail to meet regulatory standards, a letter seen by Reuters showed.
In the letter dated Nov. 6 addressed to countries with large gold markets, the London Bullion Market Association (LBMA) laid out standards they must meet on issues such as money laundering and where they source their gold - or be blacklisted.
The move by the LBMA is the first time a market or state authority trying to tackle the illegal or unethical production and trading of gold has raised the prospect of cutting off the bullion industry in a major financial centre.
"Our goal is to work jointly with these key markets to advance global standards, not to disengage from them. However, we are also committed to act if there is not meaningful and effective improvement," LBMA Chief Executive Ruth Crowell told Reuters when asked about the letter.
The LBMA letter did not target any centre in particular, but four people involved in drafting it told Reuters the gold industry in Dubai in the United Arab Emirates (UAE) was the main focus.
The letter is addressed to China, Hong Kong, India, Japan, Russia, Singapore, South Africa, Switzerland, Turkey, UAE, the United Kingdom and the United States, all of which the LBMA has identified as major gold centres.
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