How Can Audit Firms Help You With UAE’s Due Diligence Requirements for Gold Business?

The services of audit firms in Dubai have become more relevant to gold refiners as new due diligence guidelines are expected to take effect from January 2023.  The new requirement has been introduced by the government to create a responsible gold supply chain in the UAE in line with global standards.

Since only a few months are left for the new requirements to come into force, gold suppliers need to gather as much professional help to stay prepared. Failing to comply with the requirements may lead to hefty penalties and, therefore, it is advisable to avail of the best audit services in Dubai. Read ahead to know how audit firms can help the Gold suppliers comply with the upcoming due diligence requirements:

What Companies Fall Within the Scope of the New Regulation?

Companies in the precious metals and gemstones trade sectors, classified as DNFBPs, fall within the scope of the Due Diligence Regulations for Responsible Sourcing of Gold. The facilities under the ambit of the regulation include companies working in the field of gold refining and refineries and the recycling of gold products inside and outside the country. Such companies are advised to use the best audit services in Dubai to ensure compliance and avoid penalties.

What Should Be Done to Ensure Compliance?

The companies under obligation must assess the risk of financial crime while engaging in a business relationship with their suppliers. They should also inform the supervisory authority to determine an appropriate course of action to ensure the responsible supply of gold from conflict-affected and high-risk areas. The businesses under obligation, also called ‘controlled facilities’, are required to comply with certain risk-management policies by following a five-step framework. The five steps are given below:

  1. Create an effective system of governance
  2. Conduct a risk assessment on the supply chain
  3. Mitigate the identified risks
  4. Carry out an independent third-party review (audit firms in Dubai, UAE can help)
  5. Produce periodic reports

What Are the Requirements for Local Gold Importers?

The UAE Ministry of Economy (MoE) has also set out a number of due diligence requirements for the local importers of Gold. Read below to understand what these requirements are:

  • Submit audited reports to the MoE annually in line with the gold importing regulations. Approved auditors in the UAE are required to operate as per the UAE Good Delivery Standard for Gold
  • An in-house employee must be appointed to handle the compliance tasks within the registered companies. The employee should assume the direct responsibility for the due diligence process for the gold supply chain
  • The new regulations mandate the facilities to provide a training program for everyone participating in the due diligence process for the gold supply chain. The program should include a combination of general supply chain due diligence training and topics relevant to specific roles
  • The regulations also specify many conditions for choosing approved auditors in the UAE based on international best practices. Most importantly, the accredited UAE auditors must be aware of all the due diligence regulations related to the supply of gold. The companies are required to choose approved audit firms in Dubai, UAE from the list made available on the MoE website.

Is the New Regulations Part of the UAE’s AML-CFT Programme?

Yes. The new guidelines are designed to support the UAE’s legislation on Anti-Money Laundering and Combatting Financing of Terrorism (AML-CFT). The UAE’s new regulations on gold sourcing are in line with the directives of the Organization for Economic Cooperation and Development (OECD) and its annexe related to gold. The new guidelines on gold in the UAE are expected to improve the competitiveness of the country’s national business and investment landscape.

Are There Any Penalties for Non-Compliance?

Yes. The MoE has stated that the violators of the Gold regulations will be liable to pay hefty penalties and other consequences. The Ministry says the penalties may start from AED 50,000 and can go up to AED 5 million. Carry out annual audits through the best audit firms in Dubai to avoid penalties.

Hire the Best Audit Firms in Dubai, UAE

The new due diligence requirements are about to increase the compliance burden on the gold refineries in the country but consulting with the best audit firms in Dubai can help the businesses navigate the challenges. The best auditors in Dubai such as Jitendra Chartered Accountants (JCA) can help the DNFBPs to ensure compliance with the new regulations on the sourcing of gold. JCA is one of the top providers of audit services in Dubai with more than 20 years of experience. Apart from audits, we are also experienced in providing advice on AML-CFT laws for the DNFBPs.