The sector in brief
Gold and gemstones hold a great deal of value in a very small space. They can be carried across borders, sold quickly for cash and melted or recut so that their history is hard to trace. For anyone trying to launder money, they are close to ideal, and the UAE's position as a major trading hub has put the sector under particular scrutiny.
The rules treat dealers in precious metals and precious stones as designated non-financial businesses and professions. That covers the refinery and the wholesaler as much as the retail jeweller. If you buy or sell in cash at or above the reporting threshold, you have obligations that apply whatever your size.
Two questions run through the whole sector. Who is on the other side of this deal, and where did the metal or stone really come from? A dealer who can answer both, and show the paperwork, is in a far stronger position than one who cannot.
Where the risk sits
Cash
Many transactions in the trade are still settled in cash. Large or frequent cash payments, or payments split to stay under a limit, are the most obvious laundering route in the sector.
Origin of the metal or stone
Gold and stones can come from conflict-affected or high-risk areas, from illegal mining or from smuggling. Supervisors expect dealers to know their supply chain, and commonly refer to international due diligence guidance on responsible sourcing.
Scrap, recycled gold and melting
Scrap and melted gold has no visible history, which makes it easy to blend illicit metal with clean stock. Weight and purity checks, and a clear record of who sold it to you, matter.
Trade-based laundering
Invoices for shipments that are over-valued, under-valued or described loosely can be used to move money between countries under cover of genuine trade.
Third parties and walk-in customers
Customers who pay through someone else, buy on behalf of an unnamed person or are visiting briefly are harder to know. A high-value walk-in sale is not a reason to relax the checks.
Sanctions exposure
Gold has been used to get around sanctions. Dealers need to screen the customer, the counterparties and the countries involved, and act without delay on a confirmed match.
Who supervises you
It depends on where the business is licensed. Dealers on the mainland and in free zones that are not financial centres are generally supervised for AML by the Ministry of Economy and Tourism. Dealers in the Dubai International Financial Centre are covered by the DFSA's regime for designated businesses and professions, and those in Abu Dhabi Global Market by the ADGM Registration Authority. Trade bodies and free zones may add their own licensing rules, which are separate from AML supervision.
The supervisor decides the detailed rules for your licence category, so always read its current guidance alongside this page.
What supervisors expect
- A named compliance officer, and a goAML registration so that you can file the reports your supervisor requires.
- A written business risk assessment that covers customers, products, countries, payment methods and supply chain.
- Customer due diligence at the level of risk, including identifying beneficial owners of corporate buyers and sellers, and keeping copies of identification for every cash dealing that reaches the threshold.
- Supply chain due diligence for what you buy: who sold it to you, where it was mined or refined, and any red flags about its route to market.
- Screening against sanctions lists before you deal, with a record of how matches were reviewed.
- Dealers in precious metals and stones reports through goAML for cash dealings at or above the set threshold, and suspicious transaction reports when you suspect wrongdoing. The threshold has been AED 55,000, but always confirm the current figure with your supervisor or the Financial Intelligence Unit.
- Staff training, records kept for the required period, and independent testing of how the programme runs day to day.
Red flags to watch
- A customer who insists on paying in cash and gets uncomfortable when asked for identification.
- Repeated purchases just below the reporting threshold, or payments split across people or days.
- A seller who cannot say where the gold or stones came from, or whose documents look inconsistent.
- Prices that are well above or below the market for the weight and purity.
- Shipments or invoices that do not match what the customer says the business does.
- Customers from or paying through high-risk countries without a clear commercial reason.
A worked example
A cash buyer who keeps returning
A visitor buys a gold bar in cash and returns three days later for another, each time paying just under the reporting threshold. When asked for identification he says that he is buying for a friend and cannot name him. A dealer who treats each sale on its own sees two ordinary sales. A dealer who looks across the sales sees a pattern designed to stay under a limit, and an unnamed beneficial owner. The sensible response is to record both transactions together, ask for identification and an explanation, consider whether a report is required and escalate to the compliance officer. If the buyer refuses to cooperate, that refusal is itself a reason to decline the next sale and to think about a report.
How Adventant helps
Questions answered
Does a small jewellery shop have to follow these rules?
The rules apply to the activity, not to the size of the shop. A small retailer that deals in precious metals or stones in the ways the rules cover has duties, although the programme can be proportionate to the risk. Check with your supervisor if you are unsure whether a particular activity is in scope.
What is a DPMSR?
It is a report submitted through goAML by dealers in precious metals and stones for cash dealings at or above a set threshold. It is a routine report triggered by the size and form of the payment, not by suspicion. A suspicious transaction report is separate and applies whenever you suspect wrongdoing, whatever the amount.
Do I need to check where gold came from?
Yes, in proportion to the risk. Supervisors expect dealers to understand their supply chain and to take extra care with scrap, with gold from high-risk areas and with sellers who cannot show where it came from. Many dealers follow international responsible sourcing guidance and keep records of each step.
Can I accept payment in cryptocurrency?
The AML duties do not disappear because the payment method is a virtual asset. You still need to know the customer, understand where the funds came from and report where the rules require it. Because virtual assets carry their own risks, many dealers choose not to accept them. Check your supervisor's current position.
How long do I need to keep my records?
The rules set a minimum period, which is commonly at least five years, and your supervisor can explain how it applies to your records. Keep identification, transaction records, risk assessments and the reasons for your decisions together so that they can be produced quickly.