Dealers in Precious Metals and Stones

Precious metals and stones (PMS) are attractive to criminals and terrorists because they offer a high level of liquidity and anonymity, in addition to their compact size, so that they can easily be stored or smuggled. As such, dealers in precious metals and stones (DPMS) are vulnerable to exploitation in money laundering (ML) and terrorist financing (TF) schemes. Within this context, DPMS are considered among the Designated Non-Financial Business and Professions (DNFBPs) under Cabinet Decision No. (10) of 2019 concerning the Implementing Regulation of Decree Federal Law No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations. Consequently, DPMS are subject to the DNFBPs requirements, including reporting suspicious transactions and any transaction equal to or more than AED 55,000 to the UAE Financial Intelligence Unit (UAEFIU), as well as identifying and mitigating any ML/TF risks encountered.

While the UAE is a major contributor to the global trade of PMS, the risk of DPMS being abused for ML/TF purposes is recognized as high, according to the UAE national and sectoral risk assessments. With this framework, this report addresses the typologies and risk indicators associated with DPMS in the UAE during the period of January 2021–June 2022, based on the UAEFIU strategic analysis of data derived from stakeholders and reporting entities. In such a manner, this report develops raw data and information into knowledge and intelligence to be used in policy and decision-making processes, as well as operational activities. Furthermore, it aims to assist UAEFIU stakeholders, as well as DPMS and financial institutions, in identifying and reporting suspicious transactions and activities associated with ML and TF in the DPMS sector. 

The following typologies and their associated risk indicators constitute the key findings of our strategic analysis, wherein the risk mitigation areas required in the DPMS sector are underlined:

1. Trade-based money laundering (TBML) by DPMS entities.
2. Money laundering through ‘foreign currency exchange’ by DPMS entities.
3. Possible gold/cash smuggling via DPMS entities (conflict gold supply chain).

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