Page 26 - Focus Group

ALL THAT

GLITTERS

IS NOT GOLD

CA Honey Mehtani

COVID-19 has created many Dealers in Precious Metals and Stones (DPMS)
uncertainties, but one thing engage in the business of production, mining or
is certain and that is financial trading of precious metals or jewelry. This is a
crimes do not stop based on high-risk sector as it offers a lucrative market for
economic conditions. The appeal criminals who want to hide, transfer or invest their
of precious metals and stones has illicit proceeds.
amplified due to the global geopolitical and market
conditions, especially for the segment classified as DPMS gets adequately covered in the UAE AML/
Dealers in Precious Metals and Stones (DPMS). CFT Legal Framework, and makes it mandatory for
compliance, through:
What are Precious Metals and Stones (PMS)?
1. Decree Federal law No. (20) of 2018 on AML and
Precious Metal consist of gold, silver, and the CFT and Illegal Organizations.
so-called platinoid metals (principally platinum
and palladium) and precious stones consist of 2. Cabinet Decision No. (10) of 2019 concerning
diamonds, emeralds, rubies, and sapphire that the implementing regulation of Decree Law
have high quality, intrinsic value, and rarity. While No.(20) OF 2018 on AML and CFT and Illegal
not technically gemstones, pearls are often also Organizations.
included in the category of precious stones.
Under the AML-CFT Decree Law and Cabinet
The overall large size and openness of the UAE Decision, DPMS are obliged to apply the
Financial Sector, its geography, the large proportion
of foreign residents, the use of cash in transactions, required AML/CFT measures when they
and the high activity in gold and precious metals qualify as DNFBP (Designated Non-Financial
trade makes the market inherently open to ML/TF Business and Professions). This occurs
abuse by criminals.
whenever a DPMS carries out any single
Why DPMS need to understand and comply with
Anti-Money Laundering (AML) and Combating transaction, or series of transactions that
the Financing of Terrorism (CFT)? appear to be related, and who’s monetary

26 TAX JOURNAL 2020 The Institute of Chartered Accountants of India (Dubai) Chapter NPIO