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ABU DHABI – The Ministry of Economy (MoE) has published due diligence rules for responsible sourcing of gold on its website in Arabic and English, as part of its continued efforts to implement stronger anti-money laundering and combating the financing of terrorism (AML/CFT) system in UAE.
The policy includes a number of controls and standards for dealers in the precious metals and gemstones (DPMS) industry (gold), developed through practical implementation in accordance with the Due Diligence Guidelines issued by the Organization for Economic Co-operation and Development (OECD), which are Considered one of the global best practices in this regard.
Safeya Al Safi, director of the Anti-Money Laundering Department at the Ministry of Economy, said the new policy aims to strengthen the commitment of gold refiners and companies to implement due diligence measures for responsible sourcing of gold. This helps to protect the interests of companies engaged in prefabricated bullion and gold-related activities, which are subject to sanctions and administrative penalties for non-compliance in accordance with Federal Decree No. (20) of 2018 on Antitrust Law. – Money laundering and combating the financing of terrorism and illegal organizations.
The policy requires gold refiners to consider the risk of financial crime when managing their relationships with suppliers and all other actors in the supply chain, and to ensure good delivery and compliance through five steps: 1. Establish and implement strong Governance management systems Companies or institutions conduct due diligence on gold procurement, obtain the necessary knowledge and expertise through the company’s board of directors or equivalent, or engage external consultants and experts to establish these systems. The controlled company or institution must appoint a compliance officer who is directly accountable to the CEO (or equivalent), has access to the board of directors (or equivalent), and is responsible for the overall management of the due diligence process. Companies must provide a training program for everyone involved in the responsible gold sourcing due diligence process and have systems in place for transparency, information sharing and control of the gold supply chain. Companies maintain long-term relationships with suppliers, must keep them in compliance with prescribed supply chain policies, must conduct due diligence before establishing new business relationships with suppliers, and must take care to ensure continuity of implementation.
2. Identify and assess supply chain risks through supply chain due diligence, identify potential risks, identify risk indicators (high risk indicators in the gold supply chain), and continuously monitor and report to senior management within the company or institution.
3. Design and implement a management strategy to address identified risks by developing a risk monitoring plan.
4. Conduct an independent third-party review of the refinery’s due diligence activities in accordance with the audit plan and annual audit principles and standards.
5. Controlled companies or institutions must submit all supply chain due diligence audit reports to the Ministry of Economy on an annual basis. Accredited members that meet the UAE Gold Good Delivery Standard are also obliged to submit an accreditation report to the Ministry on an annual basis in order to comply with the reporting commitments of the policy.
Furthermore, Al Safi emphasized that the implementation of the Responsible Sourcing of Gold Policy will increase the efficiency of the DPMS sector (gold), thereby enhancing its competitiveness and enhancing its vital role in achieving sustainable economic development and safeguarding the interests of business and investment in the UAE.
She said the Ministry of Economy team is ready to provide various forms of technical support, including training corporate officials of relevant companies to help them understand and implement policies using the best and easiest methods and tools. “Our efforts in this regard are in line with the ministry’s commitment to support the efficiency and attractiveness of the UAE’s business sector by ensuring adherence to international best practices in the field,” she said.
The ministry clarified that controlled companies and institutions must implement the requirements of the regulation during the audit period starting January 1, 2023. Additionally, they are required to conduct a review within 12 months of the start of the audit cycle, in addition to submitting a report to the Ministry within 90 days of completing the review cycle.
The Ministry of Economy announced its due diligence on the responsible sourcing of gold regulations at a press conference last July.
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