The UAE’s Ministry of Economy has published the due diligence regulations for responsible sourcing of gold on its website. The regulations have been published in both Arabic and English.

They have published the regulations as part of their ongoing efforts to implement a more robust anti-money laundering and anti-terrorist financing system in the UAE.

It includes various controls and standards for dealers in precious metals and stones.

They were developed in line with the due diligence guidelines issued by the Organisation for Economic Cooperation and Development.

They have been issued to improve the commitment of gold refineries and companies to implement the due diligence measures for responsible sourcing of gold.

This will help protect the interests of companies engaged in pre-manufactured bullion and gold-related activities from sanctions and administrative penalties for non-compliance in line with the Implementing Regulations to Federal Decree-Law No. 20/2018 on anti-money laundering and combating the financing of terrorism and illegal organisations (Cabinet Decision No. 10/2019).

The policy obliges gold refiners to consider the risks of financial crimes when managing their relationships with suppliers and all other supply chain actors and ensuring suitable delivery and compliance.

They have to start to do this by creating and implementing robust governance management systems for the company or establishment in terms of the due diligence for sourcing gold by the company’s board of directors, or its equivalent acquiring the necessary knowledge and expertise or hiring external consultants and experts to establish these systems.

The controlled company or establishment must appoint a compliance officer who is directly accountable to the CEO or the equivalent, 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 must compel suppliers to comply with the supply chain policies following the regulations, 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.

They then have to identify and assess supply chain risk by performing due diligence to identify potential threats, identify risk indicators, including high-risk indicators in the gold supply chain and continuously monitor and report to senior management within the company or establishment.

In addition, they have to design and implement a management strategy to respond to identified risks by setting a risk-monitoring plan and carrying out independent third-party reviews of the refiner’s due diligence practices in line with the audit plan and annual audit principles and standards.

Finally, the controlled company or establishment must submit all supply chain due diligence audit reports annually to the Ministry of Economy. Accredited members working in line with the UAE Good Delivery Standard for Gold must also present accreditation reports to the Ministry annually to adhere to this policy’s reporting commitments.

Controlled companies and establishments have to implement the requirements of the regulation during an audit period from 1 January 2023.

They will also need to conduct a review 12 months after the beginning of the audit cycle and submit reports to the Ministry within 90 days of completing the review cycle.

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