Legislation hopes to improve gold sourcing due diligence © Photo by Carla Gottgens/Bloomberg via GettyImages
Legislation hopes to improve gold sourcing due diligence © Photo by Carla Gottgens/Bloomberg via GettyImages

Firms must establish 'control over gold supply chain'

20 September 2022

UAE companies will have to consider the risks of financial crimes when managing supply chains for gold and other precious metals under new due diligence guidelines.

The Ministry of Economy (MoE) has updated controls and standards for dealers in precious metals and stones in line with OECD guidelines.

Safeya Al Safi, director of the Anti-Money Laundering Department at the MoE, said the policy aimed to boost the commitment of gold refineries and companies towards due diligence when it came to sourcing gold.

Gold refiners will be obliged to appoint a compliance officer who is accountable directly to the CEO and has access to the board of directors. The compliance officer will be responsible for the 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,” said the MoE.

“The company holds long-term relationships with suppliers and must make them oblige to the supply chain policies following the regulations, and 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 of this matter.”

Firms are also obliged to carry out supply chain due diligence to identify potential risks and must continuously monitor risk and report to senior management within the company or establishment.

They must design and implement a management strategy and monitoring plan to respond to identified risks and carry out independent third-party reviews of due diligence practices in accordance with an audit plan.

Companies must submit all supply chain due diligence audit reports to the MoE annually.

Al Safi said the MoE would provide training for officials from relevant companies. “Our efforts in this regard fall in line with the ministry's commitment to supporting the efficiency and attractiveness of the UAE's business sector by ensuring compliance with international best practices in this field,” she said.

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