Emirates Gold refinery suspended from UAE's 'good delivery list'
The UAE has taken the decision to temporarily suspend Emirates Gold DMCC, one of its largest gold refineries, from its approved "good delivery list." The certification scheme, designed to ensure responsible sourcing, sets stringent rules for the gold sector.
UAE Temporarily Suspends Emirates Gold Refinery from Approved "Good Delivery List"
Effective from July 7, the suspension of Dubai-based Emirates Gold, which has been operational for three decades, was revealed on the government website. Refiners are required to meet anti-money laundering and responsible sourcing standards in order to be included on the list, which grants them access to the UAE's gold market.
London Bullion Market Association (LBMA) Suspends Emirates Gold Affiliate Membership
Following the UAE's decision, the London Bullion Market Association (LBMA), the regulator for the world's largest gold trading hub, also suspended the affiliate membership of Emirates Gold. The LBMA cited a recent "due diligence review" as the reason for the suspension. As an independent authority for precious metals, the LBMA prioritizes setting standards and maintaining trust in the global market. Any violations of the rules are treated seriously, as adherence to these rules is a condition for continued LBMA membership.
UAE Strengthens Anti-Money Laundering Efforts and Compliance
The UAE has been actively working to enhance the effectiveness of its anti-money laundering and counter-terrorism financing regime. The country has taken significant measures to bolster its anti-money laundering infrastructure and combat the financing of terrorism. This includes establishing an Executive Office for Anti-Money Laundering and Counter-Terrorism Financing and passing legislation in 2018. In the first quarter of this year, the UAE issued fines totaling over Dh115 million ($31.3 million) to combat money laundering. Additionally, confiscations have increased, with frozen assets amounting to over Dh925 million seized between November 2022 and February 2023.
New Regulations on Gold Imports Strengthen AML and CTF Efforts
In line with international regulations aimed at preventing money laundering and the financing of terrorism and illegal organizations, the UAE introduced new regulations on gold imports in January. These regulations govern the responsible sourcing of gold by importers and refiners of precious metals. Entities found in breach of the regulations face fines ranging from Dh50,000 to Dh5 million ($13,623 to $1.36 million). The new policy mandates regulated businesses, including refineries and those involved in gold recycling, to comply with the provisions and enforce strict policies and procedures to prevent the misuse of gold imports in financial crimes.
Enhanced Oversight and Risk Management Framework for Gold Sector
To further strengthen oversight and risk management in the gold sector, the UAE has established the Emirates Gold Bullion Committee, which includes participation from private companies. A federal platform for gold trading has also been set up. The regulations define the entities affected, encompassing refining and recycling companies, the precious metals and gemstones trade sectors, as well as designated non-financial businesses or professions. Import centers are required to implement risk management policies, including a five-step framework that emphasizes governance systems, risk assessment, risk mitigation, independent reviews, and periodic reporting. Compliance tasks necessitate the appointment of an in-house officer responsible for due diligence.