Dealers in precious metals and precious stones (DPMS) are classified as Designated Non-Financial Businesses and Professions (DNFBPs) under the UAE AML-CFT law, Cabinet Decision No. (10) of 2019. DPMS qualify as DNFBPs when they conduct any monetary transaction of AED 55,000 or more, including aggregated interrelated transactions that exceed this threshold.
Research indicates that DPMS are particularly vulnerable to money laundering and terrorism financing due to the unique characteristics of precious metals and stones, such as gold and diamonds. Criminals often exploit DPMS as a front for money laundering activities. AML compliance officers must be vigilant in identifying these risks to detect and prevent money laundering. Below are some common money laundering risks that DPMS face.

Using Precious Metals as a Currency Alternative
The inherent value of precious metals and stones makes them an attractive alternative currency for criminals. These items are often used to make payments for terrorist activities. Recent studies have shown that gold, silver, and diamonds are commonly smuggled to finance terrorism due to their high value and ease of concealment.
Precious Metals as Proceeds of Crime
Precious metals’ ability to store value, combined with international acceptability and ease of transport, makes them a prime target for criminal activity. Criminals can store these metals until their value increases and then sell them for a profit, or alter their form to facilitate terrorism financing. DPMS must stay vigilant to prevent such illicit activities.
Laundering Illicit Precious Metals
The complexity of the precious metals supply chain, with multiple intermediaries, creates opportunities for criminals to exploit loopholes. AML officers need to be aware of the methods used by criminals to acquire illicit money or metals.
Using Trade for Smuggling Precious Metals
Criminals often use trade tactics to smuggle precious metals due to their high value-to-weight ratio. They may disguise illegal smuggling as legitimate trade to deceive authorities.
How Can Dealers Overcome These Risks?
DPMS must take proactive steps to mitigate money laundering risks. Here are some strategies to consider:
Report Suspicious Transactions: If DPMS suspect any client involvement in criminal activities, they should report the transaction to the relevant authority or AML officer.
Maintain Accurate Records: Keeping detailed records of all transactions, especially large or suspicious ones, is crucial. These records can serve as evidence against criminals.
Conduct Customer Due Diligence: Verify the identity of customers and perform due diligence to ensure transparency and prevent dealings with suspicious individuals.
Follow AML Compliance Regime: Adhere to AML compliance regulations, including appointing a compliance officer and establishing specific rules and procedures.
Provide Training: Educate employees about money laundering risks and train them to identify suspicious transactions.
Monitor Payment Methods: Track the source of funds used by clients to ensure they are not illicit.
How Can Unicorn Global Solutions Help?
DPMS face significant exposure to money laundering risks and must remain vigilant in all transactions. Adhering to AML and CFT compliance regimes is essential for early detection of malpractices. Unicorn Global Solutions offers expert assistance in maintaining a robust compliance structure. We provide professional advice to help clients counter these risks effectively. In addition to compliance services, Unicorn Global Solutions offers comprehensive AML Services accounting services, ensuring clients have solutions for all their business challenges. Contact Unicorn Global Solutions to learn more about how we can support your business needs. Text us on WhatsApp or call us today