Reuters is reporting that since Western markets began rebuffing Russian gold as part of Ukraine-related sanctions levied against Moscow, the United Arab Emirates has become a major destination for Russian gold flowing out of the country.

According to the Reuters report, which analyzes customs records, between February 24th of 2022, and March 3rd of 2023, the UAE imported 75.7 tons of gold from Russia worth an estimated $4.3 billion. The figure is an exponential increase from the mere 1.3 tons imported in the period one year prior.

The next biggest destinations were China and Türkiye, which imported roughly 20 tons each over that period, according to the data. Combined with the UAE, the three nations were responsible for about 99.8% of all Russian gold exports in the customs data Reuters saw for this period.

Gold imports from Russia were banned by the G7, EU, and Switzerland last summer, in an effort to curtail the profitability of the nation’s $20 billion gold industry. Before the sanctions went into effect, London was the top destination for Russian gold.

Sanctions in the West have prevented Russian gold from entering Western markets. However there are no secondary sanctions prohibiting companies in other countries from dealing with and trading in Russian gold.

Reuters reported that the export records they obtained showed that Russian gold producers had no difficulty in finding new markets for their product in countries which were not taking part in restrictions placed upon Moscow.

Louis Marechal, an expert in gold sourcing at the Organization for Economic Co-operation and Development, told Reuters that there is a risk that gold which originates in Russia could find its way back into Western markets in the US and Europe, with its origins masked.

He warned, “If the Russian gold comes in, is recast by a local refiner, sourced by a local bank or trader and then sold on into the market, there you have a risk. This is why carrying out due diligence is instrumental to end buyers wishing to ensure they respect sanctions regimes.”

The UAE’s Gold Bullion Committee said it was operating “openly and honestly, with its international partners, in compliance with all current international norms as set down by the United Nations.”

One manager of a firm which shipped large quantities of Gold from Russia to the UE said that Russian companies were selling their gold at about a 1% discount over global benchmark prices.

The anonymous manager stated that most of the gold he was involved in shipping was destined for refineries, where it would be melted down and recast.