The gold, silver, and precious metal trading industry in UAE faces unique challenges, including the significant risk of money laundering. High-value commodities like gold and diamonds are often exploited by criminals to disguise illicit funds through resale. To combat this, the UAE has implemented strict Anti-Money Laundering (AML) and Combatting the Financing of Terrorism (CFT) regulations. Dealers of precious metals, stones, and gems are required to comply with these laws to ensure the integrity of their businesses and the financial system. Below, we outline key AML compliance requirements and best practices for gold and jewel dealers in UAE.
Regulatory Framework for AML Compliance
The UAE’s AML framework for gold and precious metal dealers is defined by Decree Law No. (20) of 2018, which complements Cabinet Decision No. (10) of 2019. Dealers in Precious Metals and Stones (DPMS) are classified as Designated Non-Financial Businesses and Professions (DNFBPs) by Cabinet Decision No. (10) of 2019.
This classification applies when DPMS engage in single or multiple linked transactions valued at AED 55,000 or more. Compliance is enforced by supervisory authorities such as the Ministry of Economy/Free Zone regulatory authorities, which ensure adherence to AML-CFT regulations. Below are the essential compliance steps for jewelers in UAE.
Key Steps for AML Compliance
Develop Comprehensive Policies and Controls
Establish detailed documentation outlining AML policies, procedures, and internal controls tailored to your business operations. These serve as the foundation of your compliance program.
Designate a Compliance Officer
Appoint a dedicated AML Compliance Officer to oversee the implementation and ongoing management of your AML framework.
Adopt Risk Based Approach
Adopt a Risk based approach to allocate your resources and implement controls based on the level of risk presented by different customers, products, services, or transactions.
Perform Customer Due Diligence
Verify customer identities and the source of funds, particularly for high-value transactions, to mitigate the risk of handling illicit funds.
Implement sanction screening
Leverage automated KYC and identity verification tools to improve the accuracy and speed of customer identification and screening processes.
Ongoing monitoring
Continuously review transactions and customer profiles to detect any suspicious activities.
Report Suspicious Activities
File suspicious activity reports with the Financial Intelligence Unit (FIU) using the goAML portal.
Provide Regular Training
Ensure employees receive ongoing training on AML regulations, risks, and best practices to remain vigilant and informed.
Maintain records
Retain comprehensive records of all transactions and customer details for a minimum period of 5 years.
Conduct Independent Audits
Regularly test the effectiveness of your AML program through independent audits. This helps identify areas for improvement and ensures compliance.
Filing the Dealers in Precious Metals and Stones Report (DPMSR)
In June 2021, the UAE Ministry of Economy introduced Circular No. 08/AML/2021, requiring DPMS to file the Dealers in Precious Metals and Stones Report (DPMSR) for transactions equal to or exceeding AED 55,000, including cash payments and wire transfers.
Filing Requirements
Licensed DPMS handling transactions of AED 55,000 or more with residents, non-residents, or entities must file the DPMSR.
Submission Timeline
Reports must be submitted via the goAML portal within two weeks of qualifying transactions. Timely filing ensures compliance and supports the fight against money laundering in the sector.
Best Practices for AML Compliance
Conduct Risk Assessments
Regularly evaluate potential risks to your business and adjust compliance measures as necessary.
Leverage AML Software
Automate compliance processes with advanced AML/CFT software to improve accuracy and efficiency.
Stay Proactive
Stay informed of regulatory updates and adjust your compliance program to align with evolving requirements.
Seek Professional Support
Collaborate with AML experts to navigate complex compliance requirements and ensure adherence to regulations.
How AMA Audit Tax Advisory Can Help
AMA Audit Tax Advisory provides tailored AML compliance solutions to help businesses meet UAE regulations effectively. Our services include:
- Policy Development: Assisting in creating robust AML/CFT policies and procedures.
- Compliance Officer Support: Offering guidance or outsourcing experienced Compliance Officers.
- AML Software Advisory: Recommending and implementing AML software solutions.
- goAML Registration Assistance: Streamlining the registration process with the goAML system.
- Risk Assessments: Conducting in-depth evaluations to identify and mitigate risks.
- Ongoing Support: Providing continuous advisory services to ensure long-term compliance.
Conclusion
Compliance with AML regulations is critical for gold and jewel dealers in UAE to safeguard their businesses against money laundering risks. By implementing comprehensive AML programs and leveraging professional expertise, businesses can protect their reputation, enhance financial system integrity, and achieve sustained success.
Ready to strengthen your AML compliance? Partner with AMA Audit Tax Advisory for expert guidance and customized solutions. Secure your business and build a resilient future.
