UAE: On Thursday, the UAE’s Ministry of Economy announced a new policy regarding enforcing rules for responsible sourcing of gold.
Due diligence rules specify the supply of gold to regulated establishments, including companies operating in the field of gold refining, gold refineries and recycling of gold products inside and outside the country, which are involved in the precious metals and gems trading sector. come under. , which are classified as designated non-financial businesses and businesses (DNFBPs).
The new policy will come into effect from January 2023 under the guidance of the Organization for Economic Co-operation and Development (OECD) and its related protocols for gold.
“These regulations are set to promote the competitiveness of the UAE’s business and investment environment, elevating it to higher levels that would strengthen the reputation of the national economy, both regionally and internationally. Furthermore, it supports the UAE’s status as a favoured destination for the manufacturing and selling of gold and precious metals, regionally and internationally,” said Safeya Hashim Al Safi, director of the Anti-Money Laundering Department, Ministry of Economy.
The regulations included the compliance of regulated establishments with a set of policies to manage risks while importing gold from conflict-affected or high-risk areas following a 5-step framework and including:
1. Create an effective governance system
2. Risk assessment in the supply chain
3. Mitigation of identified risks
4. Independent third-party review
5. Periodic reports.
To strengthen the gold supply system, the regulations set several supportive steps to reduce the severity of risks. These include:
1. Provision of a training programme for all individuals involved in the due diligence process of the gold supply chain. The programme includes training on general supply chain due diligence and specific topics for defining roles.
2. Submit all the audited reports as stipulated in the gold importing regulations to the Ministry annually. The approved members operating by the UAE Good Delivery Standard for Gold must submit the reports prepared for approval to the Ministry annually to fulfil reporting obligations as per these regulations.
3. Appointment of an employee to handle compliance tasks within the controlled entity and assumption of direct responsibility towards the due diligence process for the gold supply chain.
4. The Ministry has determined the requirements for selecting approved auditors by international best standards. The auditor must be well-acquainted with all due diligence regulations related to the gold importing process. Furthermore, the Ministry’s website includes a list of approved account auditors.
