UAE set for stricter gold sourcing rules

The UAE is set to introduce new rules on sourcing gold into the country in line with international standards.

According to the Ministry of Economy, the regulations will come into effect from January 2023 and will apply to companies working in the field of gold refining and the recycling of gold products.

The new policy is aimed at preventing the misuse of gold for money laundering and other financial crimes.

It will also ensure that companies take appropriate risk-management measures while importing gold from conflict zones or high-risk areas.

"The guidelines support the legislation to counter money laundering and combat terrorism financing, in line with the directives of the Organisation for Economic Cooperation and Development (OECD) and its annex related to gold," said Safeya Al Safi, Director of the Anti-Money Laundering Department at the Ministry of Economy.

"It takes international best practices and the findings and recommendations of the Financial Action Task Force (FATF) into account, and helps consolidate the UAE’s position as a major player in supply chains and global trade networks for the gold sector," she added.

Companies violating the rules could face hefty fines.

The new norms state that the controlled facilities must comply with a number of risk management policies when supplying gold from conflict-affected and high-risk areas by following a 5-step framework which stipulates the establishment of an effective governance system, risk assessment in the supply chain, mitigation of identified risks, independent third-party review, and periodic reporting.

The rules also emphasise the importance of hiring an in-house employee to handle compliance tasks within the controlled facilities, whose role would entail taking direct responsibility for the due diligence process for the gold supply chain.

These facilities will be required to submit all audit reports annually.