Dubai: The UAE is bringing in new rules related to the sourcing of gold into the country, further cutting down any gaps that existed. The laws come into full effect January next.
The regulations - brought out by the Ministry of Economy - specify the quantity of supply of gold for regulated establishments. These include companies operating refineries and the recycling of gold products inside and outside the country. These come under the precious metals and gemstones trade sector, which is classified as DNFBP (Designated Non-Financial Business and Professions).
The regulated business establishments must comply with all provisions of the new regulation and implement these in their policies and procedures. They are also committed to de-risk the possibility of financial crime in their relations with their suppliers. And they have communicate with the supervisory authority to find out the measures to be taken concerning the responsible supply of gold from conflict-affected and high-risk areas.
Law takes effect January
The Due Diligence Regulations, which will come into effect in January 2023 has been drafted in accordance with guidance from the Organization for Economic Co-operation and Development (OECD) and its corresponding protocol for gold. These regulations are set to promote the competitiveness of the UAE’s business and investment environment.
“We have witnessed the implementation of due diligence in various jurisdictions around the world to varying degrees,” said Safeya Hashim Al Safi, Director of Anti-Money Laundering Department at UAE Ministry of Economy.
“We believe this is the first time gatekeepers, which are DNFBPs - represented by gold refiners - have committed to a third-party review of their gold supply chain, enhancing the confidence of the international trade community in consolidating the UAE’s position as a global trading hub for the manufacturing and trading of gold.”
Under the new regulations, 28 refineries in the UAE are to implement KYC norms.
Penalties for non-compliance
“As per the regulations, the fines start from Dh50,000 and go up to Dh5 million,” said Al Safai. “They can also be suspended or jailed. So we have range of penalties and actions.”
This rule is for all designated non-financial businesses and professions, or sectors who are under anti money laundering and combating terrorist financing laws.
Follow these 5 steps to manage risks while importing gold from conflict-hit or high-risk areas:
- Create an effective governance system;
- Risk assessment in the supply chain;
- Mitigation of identified risks;
- Independent third-party review; and
- Periodic reports.
Recently, the Ministry of Economy worked to implement the latest global standards that conform to the requirements of FATF (Financial Action Task Force) to tackle money laundering.
Local importers must follow these steps diligently:
- Submission of audited reports as stipulated in the gold importing regulations to the Ministry on an annual basis. Approved members must operate in accordance with the UAE Good Delivery Standard for Gold.
- Appointment of an employee to handle compliance tasks within the registered companies, and assumption of direct responsibility towards due diligence process for the gold supply chain.
- The Ministry has determined the requirements for selecting approved auditors. The auditor must be well-acquainted with all due diligence regulations related to gold importing. The Ministry of Economy’s website includes a list of approved account auditors.
