Abu Dhabi: The Ministry of Economy, represented by the Anti-Money Laundering (AML) department, held a two-day session for gold refineries in the UAE on due diligence regulations for the responsible supply of gold. Its application became mandatory to all gold refineries operating in the country in January 2023. It was announced by the Organization for Economic Cooperation and Development (OECD) and is applied globally.

The move forms part of the Ministry of Economy's ongoing efforts to strengthen the national AML/CFT regime, particularly in the designated non-financial business or professions (DNFBP) sector.

Safiya Al Safi, Director of the AML Department at the Ministry, said: "The purpose of implementing the due diligence regulations for the responsible supply of gold is to protect the interests of companies that engage in such activities from the penalties and administrative sanctions resulting from their failure to comply with the UAE’s AML/CFT legislation.”

The director asserted that the policy is binding on all gold refineries registered in the country to ensure their compliance with the relevant laws of the country. The stipulated procedures help companies establish strong management systems and adopt due diligence for gold supply chains. It will help them identify and assess risks in the supply chain, and design and implement a management strategy to respond to the identified risks, arranging an independent third-party audit of the supply chain's due diligence and reporting on the supply chain's due diligence.

Safiya Al Safi noted that the objective of these extensive discussions with gold refineries is to promote their awareness on the requirements of gold supply procedures, exchange views, discuss challenges and answer queries about the implementation of these procedures. The discussions further aim to ensure that these regulations are properly implemented with companies working in this vital sector is key to the success of these efforts.

The mechanisms for the application of due diligence practices in the gold supply chain and the application of ‘Know Your Customer’ (KYC) policy, which is one of the main requirements for countering money laundering, were discussed during the session. Companies are required to conduct due diligence on their customers and suppliers and vet them by collecting a set of data to identify AML/CFT risks, as well as adopt measures to assess and identify risks, control transactions, shipping and associated documents. The commitments of the enterprise's senior management and other steps for gold supply chains were also highlighted.

The challenges faced by the UAE's gold refineries and their proposals for the efficient and effective development of the gold sector were also discussed in order to safeguard the commercial and investment interests of this vital sector.

Gold trade and trading fall under the DNFBP category and is one of the activities classified as high risk. The Ministry of Economy periodically monitors this sector to ensure its compliance with the legislation in force in this regard.

In 2022, the Ministry of Economy announced the promulgation of due diligence regulations for the responsible supply of gold in accordance with Federal Decree Law No.20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations and its executive regulations. These regulations were the latest addition to a series of initiatives and policies launched by the UAE during the last phase with an aim to develop and govern gold trade and trading in line with the highest international standards and to enhance the UAE's position as a leading global hub in  gold trade.

One of the most prominent initiatives was the adoption of the Federal Policy for the Gold Sector by the Ministerial Development Council in December 2020. This initiative included the establishment of the Emirates Gold Bullion Committee to unify the national efforts to enhance the governance of the gold sector with the participation of the private sector, and the launch of a federal platform for gold trading. The UAE also launched the UAE Good Delivery Standard for Gold in November 2021, a voluntary national standard for the gold sector to establish a framework that favors ideal specifications in the delivery and circulation of gold.

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