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Glimpse into the AML/CFT Obligations of DPMS in the UAE

A Dealer in Precious Metals and Precious Stones (DPMS) may be considered as a natural or legal person, who engages, as a regular component of their business activities in the production and/or trade of Precious Metals and Stones (PMS) which include:

  • Extraction, Refining, Cutting, Polishing or fabrication;
  • Import and Export;
  • Purchase and Sale;
  • Barter, Exchange or transfer of ownership;
  • Loan or lease arrangements;
  • Possession (for example – warehousing, part of a fiduciary, safekeeping etc.).

Dealers in Precious Metals and Precious Stones (DPMS) are identified under UAE law[1] as Designated Non-Financial Business and Professions (DNFBPs) when they carry out a single transaction or several transactions, interrelated in appearance, which value is equal to or greater than AED 55,000.

The legal framework requires for DPMS which qualify as DNFBPs to fulfill a number of obligations in regard to such transactions, namely:

  • To Identify and Assess ML/FT risks
  • To have policies and procedures in place to mitigate the identified ML/TF risks
  • Maintain risk-based customer due-diligence
  • Identifying and reporting suspicious transactions
  • Having the proper governance framework (Appointing a compliance officer and having in place staff screening and training)
  • Keeping proper records
  • Complying with the directives of the Competent Authorities of the State in relation to the United Nations Security Council resolutions under Chapter VII of the Charter of the UN and Cabinet decision No.20 of 2019 [2].

The UAE Ministry of Economy has reminded DPMS which qualify as DNFBPs, through a number of Circulars (No.1 of 2021, No2. Of 2021, No.3 of 2021 and No. 4 of 202) and then under Circular No.5 of 2021, to register themselves on the goAML[3] portal under penalty which may include, but not limited to, a financial penalty of AED 50,000 and no more than AED 5,000,000 for each violation. This registration is for the relevant persons to report all Suspicious Transaction Reports (“STRs”) to the Financial Intelligence Unit using the goAML portal.

The UAE Ministry of Economy has taken a step further with a Circular[4] addressed to DPMS in regard to their due diligence and reporting requirements in the goAML portal. The circular identifies three categories of transactions which DPMS should register on the newly created Dealers in Precious Metals and Stones Report (DPMSR) on the goAML platform with an obligation to keep records of all documents and information related to these transactions for a period of 5 years:

Transactions in cash equal to or exceeding AED 55,000 with resident individuals. Whereby the DPMS should obtain the Emirates ID or Passport copy of the individual and register the transaction on the FIU’s goAML platform using the DPMSR.
Transactions in cash equal to or exceeding AED 55,000 with non-resident individuals. Whereby the DPMS should obtain the ID or Passport copy of the individual and register the transaction on the FIU’s goAML platform using the DPMSR.
Transactions in cash or through wire transfer equal to or exceeding AED 55,000 with entities/companies. Whereby the DPMS should obtain the trade license, Emirates ID or ID or Passport copy of the person representing the company and register the transaction on the FIU’s goAML platform using the DPMSR.
Footnote:

[1] Cabinet Decision No. (10) of 2019 Concerning the Implementing Regulation of Decree Law No. (20) of 2018 On Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations.

[2] Cabinet Decision No. (20) of 2019 Regarding Terrorism Lists Regulation and Implementation of UN Security Council Resolutions On the Suppression and Combating of Terrorism, Terrorists Financing & Proliferation of Weapons of Mass Destruction, and Related Resolutions

[3] The goAML application is a fully integrated software solution developed specifically for use by Financial Intelligence Units (FIU’s) and is one of the United Nations Office on Drugs and Crime strategic responses to financial crime, including money-laundering and terrorist financing.

[4] Circular Number: 08/AML/2021 Date: 02 June 2021

About the Author:

Asif Sooltangos is a Director and the General Counsel of Gold Hive Trading LLC (www.goldhivellc.com), a licensed precious metals and stones trading company in UAE. He advises on DPMS compliance in regard to their AML/CFT and their responsible sourcing obligations. He also advises on cross-border precious metals and stones deals.

He may be contacted at asif@goldhivellc.com

Sources:

Federal Decree-law No. (20) of 2018 ON ANTI-MONEY LAUNDERING AND COMBATING THE FINANCING OF TERRORISM AND FINANCING OF ILLEGAL ORGANISATIONS

Cabinet Decision No. (10) of 2019 CONCERNING THE IMPLEMENTING REGULATION OF DECREE LAW NO. (20) OF 2018 ON ANTI- MONEY LAUNDERING AND COMBATING THE FINANCING OF TERRORISM AND ILLEGAL ORGANISATIONS

Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations Guidelines for Designated Non-Financial Businesses and Professions Supplemental Guidance for Dealers in Precious Metals and Stones

UAE Ministry of Economy Circular No. 5/2021 Dated 3/03/2021

UAE Ministry of Economy Circular 08/AML/2021

https://www.unodc.org/unodc/en/global-it-products/goaml.html

https://www.moec.gov.ae/en/registering-companies-in-goaml