Search
Close this search box.

AML for Gold and Precious Metals Dealers in Dubai, UAE

Table of Contents

AML for Gold and Precious Metals Dealers in Dubai, UAE​

Introduction:

Navigating AML for Gold and Precious Metal Dealers in Dubai, UAE poses unique challenges, yet with expert guidance from LFL International Group, compliance becomes seamless.

Cabinet Decision No. (10) of 2019, known as the AML-CFT Decision, outlines regulations for implementing Decree Law No. (20) of 2018, which addresses anti-money laundering and combating the financing of terrorism and illegal organizations. This decision designates Dealers in Precious Metals and Precious Stones (DPMS) as Designated Non-Financial Businesses and Professions (DNFBPs) when they engage in single monetary transactions or multiple interconnected transactions valued at AED 55,000 or more. 

Consequently, DPMS entities are subjected to specific anti-money laundering and combating the financing of terrorism (AML/CFT) obligations as part of the legislative and regulatory framework in the United Arab Emirates.

Who is a Dealer in Precious Metals or Precious Stones (DPMS)?

Who is a Dealer in Precious Metals or Precious Stones (DPMS)? 

A dealer in PMS may be considered to be any natural or legal person (or legal arrangement), or their employee or representative, who engages, as a regular component of their business activities, in the production and/or trade of precious metals or precious stones, whether in raw, cut, polished, or elaborated (mounted or fashioned) form. Production and/or trade in this context includes any of the following acts involving raw/rough or processed/finished PMS:  

∙ Extraction (whether by mining or other method), refining, cutting, polishing or fabrication; 

∙ Import or export; 

∙ Purchase, sale, re-purchase or re-sale (whether in primary, secondary, or scrap markets); 

∙ Barter, exchange, or other form of transfer of ownership; 

∙ Loan or lease arrangements (e.g. sale-leaseback, consignment, or memorandum sales); 

∙ Possession (whether permanent or temporary, for example, as part of a fiduciary, warehousing, collateral, or other safekeeping arrangement; or under contract for a specific purpose such as cutting, polishing, refining, casting or fabrication services).  

The above-referenced conditions are irrespective of whether the transaction is wholesale or retail; whether it is direct or indirect (such as through a broker or other intermediary); whether it is between natural or legal persons or legal arrangements, including any other DPMS; and whether the PMS are traded physically or virtually (for example, via certificates, on electronic exchanges, or via internet), irrespective of where or by whom the physical goods are warehoused, held in safekeeping, or delivered. 

AML/CFT Obligations for DPMS

All DPMS which qualify as DNFBPs are required by the AML-CFT Law and the AML-CFT Decision to fulfil certain obligations which constitute the basis of an effective risk-based AML/CFT programme, in respect of covered transactions. These obligations include:

  • Identifying and assessing ML/FT risks 
  • Establishing, documenting, and updating policies and procedures to mitigate the identified ML/FT risks 
  • Maintaining adequate risk-based customer due-diligence (CDD) and ongoing monitoring
  • procedures
  • Identifying and reporting suspicious transactions
  • Putting in place an adequate governance framework for AML/CFT, including appointing an AML/CFT Compliance Officer, and ensuring adequate staff screening and training
  • Maintaining adequate records related to all of the above; and
  • Complying with the directives of the Competent Authorities of the State in relation to the United Nations Security Council resolutions under Chapter VII of the Charter of the United Nations, as well as in relation to Cabinet Decision No. (20) of 2019 Regarding Terrorism Lists Regulation and Implementation of UN Security Council Resolutions On the Suppression and Combating of Terrorism, Terrorists Financing & Proliferation of Weapons of Mass Destruction, and Related Resolutions

Risk Factors of Specific Concern to Gold and Precious Metals Dealers in Dubai (DPMS)

  • Geographic Risks, 
  • Sectoral Risks, 
  • Channel-based Risks, 
  • Product Risks, 
  • Service Risks and 
  • Customer-specific Risks
  • Other Risk Factors:
  • Novelty/innovation
  • Cyber security/distributed networks

The regulations classify gold and precious metals dealers as Designated Non-Financial Businesses and Professions (DNFBPs), subjecting them to AML requirements.

Key AML Obligations for Dubai’s Gold Dealers

To comply with AML regulations, gold dealers in Dubai must:

  • Appoint an AML Compliance Officer: Designate a staff member responsible for overseeing and implementing the AML program.
  • Conduct thorough Customer Due Diligence (CDD): This involves verifying the identity and source of wealth of clients, particularly for high-value transactions.
  • Monitor transactions: Regularly monitor transactions to identify suspicious activity that may indicate money laundering.
  • Report suspicious activity: Report any suspected money laundering to the Financial Intelligence Unit (FIU).
  • Maintain records: Keep detailed records of all transactions and client information for a specified period.

FILING OF DEALERS IN PRECIOUS METALS AND STONES REPORT (DPMSR)

What is ‘Dealers in Precious Metals and Stones Report (DPMSR)’?

Ministry of Economy issued a Circular (No. 08/AML/2021 dated 02 June 2021), instructing the dealers in precious metals and stones to register the specified transactions – cash transactions or transactions through wire transfers (in case of legal person) exceeding a certain amount in the report named as Dealers in Precious Metals and Stones Report (‘DPMSR)

The said reporting requirement was made effective from 12th June 2021. 

Who is mandated to submit DPMSR?

Every licensed dealer in precious metals and stones (DPMS) operating in the UAE must report transactions of AED 55,000 or more, whether conducted in cash or through wire transfers (in specified scenarios). Regardless of whether they are registered as mainland companies or with a free zone, all DPMS entities are required to file DPMSR for designated transactions.

Required Documents

As part of obtaining identification documents, the following documents shall be collected:

Category List of Documents
table1

What is the deadline for submitting DPMSR via the goAML Portal?

DPMSR must be filed within two weeks of the receipt or payment of funds amounting to AED 55,000 or more, either in cash or via wire transfer.

DPMSR – An Additional Reporting:

It’s crucial to emphasize that filing DPMSR to report transactions surpassing the specified threshold is an additional obligation.

AML for Gold and Precious Metals Dealers in Dubai, UAE

Introduction:

Cabinet Decision No. (10) of 2019, known as the AML-CFT Decision, outlines regulations for implementing Decree Law No. (20) of 2018, which addresses anti-money laundering and combating the financing of terrorism and illegal organizations. This decision designates Dealers in Precious Metals and Precious Stones (DPMS) as Designated Non-Financial Businesses and Professions (DNFBPs) when they engage in single monetary transactions or multiple interconnected transactions valued at AED 55,000 or more. 

Consequently, DPMS entities are subjected to specific anti-money laundering and combating the financing of terrorism (AML/CFT) obligations as part of the legislative and regulatory framework in the United Arab Emirates.

Who is a Dealer in Precious Metals or Precious Stones (DPMS)? 

A dealer in PMS may be considered to be any natural or legal person (or legal arrangement), or their employee or representative, who engages, as a regular component of their business activities, in the production and/or trade of precious metals or precious stones, whether in raw, cut, polished, or elaborated (mounted or fashioned) form. Production and/or trade in this context includes any of the following acts involving raw/rough or processed/finished PMS: 

∙ Extraction (whether by mining or other method), refining, cutting, polishing or fabrication; 

∙ Import or export; 

∙ Purchase, sale, re-purchase or re-sale (whether in primary, secondary, or scrap markets); 

∙ Barter, exchange, or other form of transfer of ownership; 

∙ Loan or lease arrangements (e.g. sale-leaseback, consignment, or memorandum sales); 

∙ Possession (whether permanent or temporary, for example, as part of a fiduciary, warehousing, collateral, or other safekeeping arrangement; or under contract for a specific purpose such as cutting, polishing, refining, casting or fabrication services). 

The above-referenced conditions are irrespective of whether the transaction is wholesale or retail; whether it is direct or indirect (such as through a broker or other intermediary); whether it is between natural or legal persons or legal arrangements, including any other DPMS; and whether the PMS are traded physically or virtually (for example, via certificates, on electronic exchanges, or via internet), irrespective of where or by whom the physical goods are warehoused, held in safekeeping, or delivered.

AML/CFT Obligations for DPMS

All DPMS which qualify as DNFBPs are required by the AML-CFT Law and the AML-CFT Decision to fulfil certain obligations which constitute the basis of an effective risk-based AML/CFT programme, in respect of covered transactions. These obligations include:

  • Identifying and assessing ML/FT risks 
  • Establishing, documenting, and updating policies and procedures to mitigate the identified ML/FT risks 
  • Maintaining adequate risk-based customer due-diligence (CDD) and ongoing monitoring
  • procedures
  • Identifying and reporting suspicious transactions
  • Putting in place an adequate governance framework for AML/CFT, including appointing an AML/CFT Compliance Officer, and ensuring adequate staff screening and training
  • Maintaining adequate records related to all of the above; and
  • Complying with the directives of the Competent Authorities of the State in relation to the United Nations Security Council resolutions under Chapter VII of the Charter of the United Nations, as well as in relation to Cabinet Decision No. (20) of 2019 Regarding Terrorism Lists Regulation and Implementation of UN Security Council Resolutions On the Suppression and Combating of Terrorism, Terrorists Financing & Proliferation of Weapons of Mass Destruction, and Related Resolutions

Risk Factors of Specific Concern to Gold and Precious Metals Dealers in Dubai (DPMS)

  • Geographic Risks, 
  • Sectoral Risks, 
  • Channel-based Risks, 
  • Product Risks, 
  • Service Risks and 
  • Customer-specific Risks
  • Other Risk Factors:
  • Novelty/innovation
  • Cyber security/distributed networks

The regulations classify gold and precious metals dealers as Designated Non-Financial Businesses and Professions (DNFBPs), subjecting them to AML requirements.

Key AML Obligations for Dubai’s Gold Dealers

To comply with AML regulations, gold dealers in Dubai must:

  • Appoint an AML Compliance Officer: Designate a staff member responsible for overseeing and implementing the AML program.
  • Conduct thorough Customer Due Diligence (CDD): This involves verifying the identity and source of wealth of clients, particularly for high-value transactions.
  • Monitor transactions: Regularly monitor transactions to identify suspicious activity that may indicate money laundering.
  • Report suspicious activity: Report any suspected money laundering to the Financial Intelligence Unit (FIU).
  • Maintain records: Keep detailed records of all transactions and client information for a specified period.

FILING OF DEALERS IN PRECIOUS METALS AND STONES REPORT (DPMSR)

What is ‘Dealers in Precious Metals and Stones Report (DPMSR)’?

Ministry of Economy issued a Circular (No. 08/AML/2021 dated 02 June 2021), instructing the dealers in precious metals and stones to register the specified transactions – cash transactions or transactions through wire transfers (in case of legal person) exceeding a certain amount in the report named as Dealers in Precious Metals and Stones Report (‘DPMSR)

The said reporting requirement was made effective from 12th June 2021. 

Who is mandated to submit DPMSR?

Every licensed dealer in precious metals and stones (DPMS) operating in the UAE must report transactions of AED 55,000 or more, whether conducted in cash or through wire transfers (in specified scenarios). Regardless of whether they are registered as mainland companies or with a free zone, all DPMS entities are required to file DPMSR for designated transactions.

What is the deadline for submitting DPMSR via the goAML Portal?

DPMSR must be filed within two weeks of the receipt or payment of funds amounting to AED 55,000 or more, either in cash or via wire transfer.

DPMSR – An Additional Reporting:

It’s crucial to emphasize that filing DPMSR to report transactions surpassing the specified threshold is an additional obligation.

LFL International Group: Enabling AML Compliance for Gold and Precious Metals Dealers in Dubai, UAE

LFL International Group, a leading business advisory and financial consultancy established in the UK since 2000 and in Dubai since 2017, plays a pivotal role in assisting gold and precious metals dealers in Dubai, UAE, to navigate the intricate landscape of Anti-Money Laundering (AML) compliance. With extensive expertise in business formation, intellectual property, and financial advisory services, LFL International Group offers tailored solutions to ensure that dealers in precious metals and stones (DPMS) meet their AML obligations effectively. By providing comprehensive guidance on regulatory requirements, risk assessment, and implementing robust AML/CFT programs, LFL empowers DPMS entities to establish a culture of compliance while navigating the complexities of the high-value commodities market. Additionally, LFL assists in the appointment of AML Compliance Officers, conducting thorough Customer Due Diligence (CDD), transaction monitoring, suspicious activity reporting, and maintaining accurate records, thereby ensuring DPMS entities adhere to the stringent AML/CFT regulations mandated by the UAE authorities. Through its unwavering commitment to excellence and compliance, LFL International Group serves as a trusted partner for DPMS entities, facilitating their seamless integration into the global financial ecosystem while mitigating the risks associated with money laundering and terrorist financing.

Conclusion:

Businesses dealing in precious metals and stones face unique AML/CFT challenges due to the high-value nature of their products and complex supply chains. However, with a robust regulatory framework, technological solutions, and international cooperation, these challenges can be effectively addressed. Compliance with AML/CFT policies not only helps protect businesses from legal repercussions but also contributes to the broader effort to combat money laundering and terrorist financing on a global scale.

Unlock Your Potential:
Book Your Consultation Now!

Request a Call Back

Our experienced team can help you stop wasting time and energy on the business formation process.

+971 (0) 509 265 140 

+971 (0) 525 977 456