The Ministry of Economy (MoE) has published the due diligence regulations for responsible sourcing of gold on its website in both Arabic and English, as part of its continuing efforts to implement a stronger anti-money laundering and combating the financing of terrorism (AML/CFT) system in the UAE.
The policy includes a number of controls and standards for dealers in the precious metals and stones (DPMS) sector (gold), which were developed through practical implementation in accordance with the due diligence guidelines issued by the Organisation for Economic Cooperation and Development (OECD), known to be among the global best practices in this regard.
Safeya Al Safi, Director of the Anti-Money Laundering Department at the Ministry of Economy, stated that the new policy aims to enhance the commitment of gold refineries and companies to implementing the due diligence measures for responsible sourcing of gold. This contributes to protecting the interests of companies engaged in pre-manufactured bullion and gold-related activities from sanctions and administrative penalties for non-compliance in accordance with the provisions of the Executive Regulations of Federal Decree Law No. (20) of 2018 on anti-money laundering and combating the financing of terrorism and illegal organisations.
The policy obligates gold refiners to consider the risks of financial crimes when managing their relationships with their suppliers and all other actors in the supply chain and to ensure good delivery and compliance through five steps:
1. Creation and implementation of strong governance management systems for the company or establishment in regards to the due diligence for sourcing of gold, through the acquirement of the necessary knowledge and expertise by the company's board of directors, or its equivalent, or hiring external consultants and experts to establish these systems. The controlled company or establishment must appoint a compliance officer who is accountable directly to the CEO (or equivalent) and has access to the board of directors (or equivalent) and is also responsible for the comprehensive management of the due diligence process. The company must provide a training programme for everyone participating in the process of due diligence for the responsible sourcing of gold, and establish a system of transparency, information sharing, and control over the gold supply chain. The company holds long-term relationships with suppliers and must make them oblige to the supply chain policies following the regulations, and due diligence must be exercised before establishing a new business relationship with the supplier and care must be taken to ensure continuity in the implementation of this matter.
2. Identification and assessment of risk in the supply chain by performing supply chain due diligence to identify potential risks, identifying risk indicators (high-risk indicators in the gold supply chain), and continuous monitoring and reporting to senior management within the company or establishment.
3. Designing and implementing of a management strategy to respond to identified risks by setting a risk-monitoring plan.
4. Carrying out independent third-party reviews of the refiner's due diligence practices in accordance with the audit plan and annual audit principles and standards.
5. The controlled company or establishment must submit all supply chain due diligence audit reports to the Ministry of Economy annually. Accredited members working in alignment with the UAE Good Delivery Standard for Gold are also obligated to present accreditation reports to the Ministry annually to adhere to this policy's reporting commitments.
Furthermore, Al Safi emphasised that the implementation of the policy for responsible sourcing of gold will enhance the efficiency of the DPMS sector (gold), thus increasing its competitiveness and enhancing its vital role in achieving sustainable economic development and maintaining the UAE's commercial and investment interests.
She indicated that the Ministry of Economy team is prepared to provide all forms of technical support, including training for corporate officials from relevant companies to help them understand and implement the policy using the best and easiest methods and tools.
"Our efforts in this regard fall in line with the Ministry's commitment to supporting the efficiency and attractiveness of the UAE's business sector by ensuring compliance with international best practices in this field,"
The Ministry clarified that controlled companies and establishments are required to implement the requirements of the regulation during an audit period starting from 1st January, 2023. In addition, they will need to conduct a review as they complete 12 months since the beginning of the audit cycle, in addition to submitting reports to the Ministry within 90 days of completing the review cycle.
The Ministry of Economy announced the release of the due diligence for responsible sourcing of gold regulations during a press conference organised last July.
News Source: Emirates News Agency