New Rules for AML in Gold & Precious Metals Sector

The United Arab Emirates (UAE) has long been recognized as one of the world’s leading hubs for gold trading and precious metals. With Dubai often referred to as the "City of Gold," the sector contributes significantly to the national economy and international trade. However, its global prominence and heavy reliance on cash transactions make the gold and precious metals industry vulnerable to money laundering (ML) and terrorist financing (TF) risks.

To mitigate these risks and align with international standards, the UAE has introduced new and stricter AML (Anti-Money Laundering) rules for businesses operating in the gold and precious metals sector.

At Sheikh Anwar Accounting and Auditing LLC, Dubai (MOE Registered Auditor – Entry No. 5817), we specialize in guiding gold traders, refiners, and jewelry companies through these evolving regulatory requirements.

________________________________________

1. Why the Gold & Precious Metals Sector is High Risk

The UAE’s gold and jewelry market faces unique AML challenges:

• High-value, cash-intensive transactions.

• Frequent cross-border trading with diverse jurisdictions.

• Complex supply chains involving miners, refiners, and intermediaries.

• Potential misuse of trade-based money laundering (TBML) techniques.

These vulnerabilities have prompted regulators to impose stricter AML measures to safeguard the industry.

________________________________________

2. Legal & Regulatory Framework

The new AML rules for the gold and precious metals sector derive from:

• Federal Decree-Law No. 20 of 2018 (AML/CFT Law).

• Cabinet Decision No. 10 of 2019 (AML/CFT Implementing Regulations).

• Cabinet Decision No. 16 of 2021 on the regulation of the precious metals and stones sector.

• Ministry of Economy (MOE) inspection frameworks for DNFBPs.

• Guidance Notes issued for dealers in precious metals and stones (DPMS).

________________________________________

3. Key AML Obligations Under the New Rules

a) Customer Due Diligence (CDD)

• Verification of customer identity for all transactions above AED 55,000 (cash or equivalent).

• Enhanced Due Diligence (EDD) for high-risk transactions, politically exposed persons (PEPs), and cross-border clients.

b) Registration and Licensing

• Mandatory registration with the Ministry of Economy as a Designated Non-Financial Business or Profession (DNFBP).

• Compliance with reporting requirements under the goAML system.

c) Suspicious Transaction Reporting (STR)

• Obligation to file STRs and Suspicious Activity Reports (SARs) through the goAML platform.

• Monitoring of unusual patterns such as multiple small transactions structured to avoid the AED 55,000 reporting threshold.

d) Record-Keeping

• Maintain transaction records, invoices, and customer due diligence data for at least five years.

• Ensure records are available for inspections by the Ministry of Economy and other regulators.

e) Internal AML Programs

• Appointment of a Money Laundering Reporting Officer (MLRO).

• Implementation of AML policies, procedures, and internal controls.

• Regular staff training to identify red flag indicators in gold and precious metals trade.

________________________________________

4. Red Flags in the Gold & Precious Metals Sector

Some common warning signs include:

• Customers insisting on large cash payments without a reasonable explanation.

• Transactions involving unusually high premiums or discounts.

• Frequent dealings with high-risk jurisdictions or offshore companies.

• Lack of transparency in supply chain documentation.

• Buyers or sellers unwilling to disclose ultimate beneficial ownership (UBO).

________________________________________

5. Impact on Businesses

The new AML rules have significantly reshaped the operating environment for gold and precious metals businesses:

• Higher Compliance Costs: Companies must invest in compliance staff, software, and systems.

• Reduced Informal Transactions: Cash-heavy transactions now face stricter scrutiny.

• Stronger Market Integrity: Compliance enhances international confidence in the UAE’s gold sector.

• Risk of Penalties: Non-compliance can result in fines ranging from AED 50,000 to AED 5 million, suspension of licenses, or reputational damage.

________________________________________

6. How Companies Can Stay Compliant

To ensure compliance with the new AML rules, gold and jewelry businesses should:

• Conduct comprehensive risk assessments of their clients and supply chains.

• Establish clear AML policies tailored to the gold trade.

• Use digital KYC and screening tools for efficiency.

• Train employees on recognizing suspicious activity.

• Engage professional advisors like Sheikh Anwar Accounting and Auditing LLC for compliance audits, goAML registration support, and ongoing monitoring.

________________________________________

Conclusion

The UAE’s new AML rules for the gold and precious metals sector reflect the country’s commitment to global financial integrity and FATF standards. For businesses, these changes bring both challenges and opportunities: while compliance requires effort and investment, it also enhances market reputation, investor trust, and long-term sustainability.

At Sheikh Anwar Accounting and Auditing LLC, we help gold and precious metals businesses navigate these AML requirements through expert advisory, audits, and compliance frameworks.

📌 Contact Us

Sheikh Anwar Accounting and Auditing LLC – Dubai, UAE

🌐 Website: www.sa-auditors.com

📧 Email: info@sa-auditors.com