The Ministry of Economy (MoE) is entrusted with the supervision and regulation of Designated Non-Financial Business & Professions (DNFBP) operating in the UAE, which includes Dealers in Precious Metals & Precious Stones sector (DPMS). The Cabinet Decision No (3/1F) of 2019 and its amendment Cabinet Decision No (28M/4F) of 2019 designated the Ministry of Economy with the supervision and regulation of DNFBPs operating in the country, including those entities operating in the commercial free zones, as well as the issuance of regulations and guidelines and the implementation of measures to ensure adherence to AML/CFT obligations under the AML/CFT legislation.
Clause No (2) of Article (44) of Cabinet Decision No. 10 of 2019 on the Implementing Regulation of Decree Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations designates the supervisory authorities with the “establishment of the crime-combating regulations, instructions and forms for the entities subject to their supervision, when necessary.”
The DPMS sector’s risk rating is inherently "high" and the Refinery sub segment is identified as the sub segment with the highest risk. MoE has initiated several measures as part of intensified regulatory and supervisory engagement with DPMS sector to mitigate the identified risks.
Due Diligence Regulations establishes the measures adopted by refiners with regard to the responsible sourcing of gold. Adherence to this Regulation forms part of the existing AML/CFT requirements set out in the AML/CFT Legislation. The implementation of this regulation will complement the existing Customer Due Diligence (CDD) requirements for gold refiners and will reduce overall compliance burden and audit fatigue on these entities.
The regulations consist of a set of policies and procedures to identify and mitigate risks in the process of importing gold from conflict -affected and high-risk areas, which follows the 5 steps frame work issued by OECD as summarized below.
- Establishment of a strong company management system
- Identification and assessment of risk in the supply chain
- Designing and implementation of a strategy to respond to identified risks
- Carrying out independent third-party reviews of the refiner’s due diligence practices
- Periodic reporting
The entities under the purview of this regulation will have to adhere to the requirements from the audit period starting from 1 Jan 2023 and will have to do the third-party review upon completing 12 months from the start of the cycle. The reports will have to be submitted to the Ministry of Economy within 90 days of the completion of the review cycle.
The list of approved reviewers is available on Approved-Reviewers-List.pdf (ugd.gov.ae)