AML Obligations for Precious Metals and Stones Dealers in the UAE

Regulatory Framework

The UAE’s AML/CFT regime for DNFBPs, including precious metals and stones dealers, is primarily governed by Federal Decree-Law No. 10 of 2025 on Anti-Money Laundering and Combating the Financing of Terrorism, which replaced Federal Decree-Law No. 20 of 2018, together with its implementing decisions.

These instruments establish the legal foundation for AML/CFT obligations across specified DNFBP sectors, including dealers in precious metals, stones, and jewellery. The Cabinet Decision sets out specific requirements for CDD, record-keeping, and STR filing.

Supervisory responsibility for precious metals and stones dealers varies depending on the entity’s location and licensing. DMCC operates as a major free zone for commodities trade, including precious metals and stones, and has its own compliance expectations for member companies.

The UAE Financial Intelligence Unit (UAEFIP) receives STRs from DNFBPs and coordinates with law enforcement on financial intelligence matters.

Customer Due Diligence Obligations

CDD measures include:

Identification: Obtaining sufficient information to identify the customer, including full name, date of birth, nationality, and address for individuals, or company name, registration number, legal form, and registered address for legal entities.

Verification: Verifying the customer’s identity using reliable and independent documents.

Beneficial ownership: Identifying the beneficial owner, defined as any natural person who ultimately owns or controls 25 percent or more of the customer entity, or who exercises significant control.

Source of funds: Understanding the source of funds for the transaction, including the origin of money being used for the purchase.

Source of wealth: For higher-risk customers, understanding the source of wealth, which refers to the origin of the customer’s overall financial standing.

Ongoing awareness: Maintaining awareness of customer activity and conducting periodic reviews.

Trade-Based Money Laundering Risk

The precious metals and stones sector is particularly vulnerable to trade-based money laundering, a method of moving value through the international trade system. Common trade-based money laundering techniques include:

Over-invoicing: Charging more than the market value for precious metals or stones in an export or import transaction, with the overpayment providing a mechanism to move illicit funds.

Under-invoicing: Charging less than the market value, often used to move funds out of a jurisdiction or to create artificial losses for tax purposes.

Multiple invoicing: Submitting several invoices for a single shipment to facilitate the movement of funds beyond legitimate transaction values.

Phantom shipments: Falsely documenting shipments that do not occur, creating the appearance of trade to justify financial transfers.

Gold smuggling: Transporting gold across borders to avoid customs declarations and reporting requirements, then selling the gold to generate clean proceeds.

Kimberley Process

The UAE participates in the Kimberley Process Certification Scheme for rough diamonds, which aims to prevent the trade in conflict diamonds. While the Kimberley Process addresses conflict diamonds specifically, it does not address broader money laundering concerns related to the diamond trade.

Dealers in diamonds should be aware of the Kimberley Process requirements and ensure that rough diamond purchases are accompanied by the required certification.

Red Flags for Precious Metals and Stones Transactions

Practitioners in the precious metals and stones sector should be alert to the following red flags:

Cash transactions: Large cash payments for gold, diamonds, or other precious items, particularly where the amount approaches or exceeds reporting thresholds, may indicate attempts to avoid the formal financial system.

Transactions inconsistent with customer profile: Purchases significantly larger than the customer’s apparent financial capacity or business activities may indicate money laundering.

Unusual payment patterns: Requests to split payments across multiple parties, use of third-party payments without clear justification, or requests to structure payments to avoid thresholds.

Customer resistance: Reluctance to provide identification documents, source of funds information, or beneficial ownership details.

Rapid transactions: Quick buying and selling of high-value items that appears inconsistent with normal market activity.

International transfers: Large transfers from or to jurisdictions with elevated corruption or money laundering risk, or from correspondent banks in such jurisdictions.

Gold bar or bullion transactions: High-value gold bar purchases, particularly in cash or through complex ownership structures.

Diamond transactions: Purchases of high-value diamonds, particularly uncut stones that may be easier to transport and conceal.

Supplier verification: Difficulties in verifying the legitimacy of gold or diamond suppliers, particularly where items originate from high-risk regions.

Record Keeping

Precious metals and stones dealers must maintain records of all CDD information, including copies of identification documents, for at least five years following the completion of the transaction or the end of the business relationship. Records must be made available to the UAEFIP and other competent authorities upon request.

STR Filing

Where a precious metals or stones dealer knows, suspects, or has reasonable grounds to suspect that a transaction or attempted transaction involves proceeds of crime or is related to terrorist financing, an STR must be filed with the UAEFIP promptly.

The tipping-off prohibition applies and is subject to criminal penalties.

DMCC and the UAE Precious Metals Ecosystem

DMCC operates as a major hub for precious metals and stones trade in Dubai, with thousands of member companies engaged in gold, diamond, and other commodity activities. DMCC member companies are expected to comply with applicable UAE AML/CFT requirements, including CDD obligations and STR filing.

DMCC’s ecosystem includes the Dubai Diamond Exchange, the Dubai Gold and Commodities Exchange, and various trading and storage facilities. The concentration of precious metals and stones activity in DMCC creates both opportunities for supervisory coordination and challenges in ensuring comprehensive compliance across the sector.

The UAE’s position as a global gold hub, handling significant volumes of gold imports and exports, means that the sector attracts legitimate business alongside potential financial crime risk. Effective AML/CFT compliance is essential for maintaining the integrity of the UAE’s position in global precious metals trade.

Implications for Compliance Leaders

The precious metals and stones sector in the UAE faces ongoing supervisory attention to AML/CFT compliance. The FATF’s 2020 mutual evaluation identified significant concerns about the effectiveness of supervision in this sector.

For organisations operating in this space, building robust compliance programmes is not merely a regulatory requirement. It is essential for maintaining business relationships with counterparties, financial institutions, and other parties who conduct their own due diligence on the organisations they work with.

Nexiant supports precious metals and stones organisations in the UAE with AI-assisted screening and compliance solutions. Contact our team to discuss your requirements.

This article was accurate at the time of publication in August 2026 and is intended for general informational purposes only. It does not constitute legal, regulatory or compliance advice. Organisations should seek qualified professional guidance in relation to their specific obligations.