- December 8, 2023
- Posted by: Vimal Hemachandran
- Category: Blog
The United Arab Emirates (UAE) is spearheading a transformative initiative to elevate transparency and accountability in its gold industry. Effective January 2024, all gold refineries within the UAE are compelled to enlist external auditors, reinforcing responsible sourcing practices and ensuring alignment with international standards. This strategic decision not only underscores the UAE’s commitment to ethical trade but also cements its position as a global frontrunner in the gold market.
From January 2024 onwards, each gold refinery in the UAE must enlist external approved auditors. These auditors will play a pivotal role in evaluating the risk management frameworks employed by the refineries. The audit findings will be compiled into comprehensive reports, due for submission to the Ministry of Economy by March of the following year.
Principles for Responsible Sourcing
Demonstrating a resolute commitment to responsible sourcing, all licensed refineries, regardless of location in the mainland or free zones, must strictly adhere to regulations set by the Ministry of Economy. Rigorous onsite and offsite visits by the ministry ensure compliance, scrutinizing the due diligence measures implemented by companies in vetting both customers and suppliers.
Mechanisms of Due Diligence for AML/CFT Risks
Gold refining companies now face a mandatory requirement to conduct due diligence on their customers and suppliers. This involves collecting a comprehensive set of data to identify Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) risks. The Ministry of Economy emphasizes the adoption of effective measures to assess and control transactions, shipping, and associated documentation.
Defending Industry Interests
The implementation of due diligence regulations for responsible gold supply aims to safeguard the interests of companies involved in these activities. Adherence to these regulations helps companies avoid penalties and administrative sanctions resulting from non-compliance with the UAE’s AML/CFT legislation. These regulations empower companies to identify and mitigate risks within their supply chains, underscoring the importance of independent third-party audits for due diligence.
UAE’s Commitment to International Standards
These regulations form part of a broader series of initiatives and policies launched by the UAE government to develop and govern the gold trade in line with international standards. The objective is to strengthen the UAE’s standing as a primary global center for the gold trade, drawing in international enterprises and fostering a gold industry that is both sustainable and transparent.
As the UAE boldly reshapes its gold industry, the mandatory audits and responsible sourcing regulations represent a pivotal moment in the country’s commitment to international standards. By prioritizing transparency, due diligence, and risk management, the UAE is poised to sustain its leadership in the global gold trade, setting a noteworthy example for responsible and sustainable business practices in the precious metals industry.