**Intensified Compliance Efforts in Dubai's Gold Souq

The Gold Souq in Dubai is currently facing increased regulatory scrutiny as the Minister of Economy and Tourism, Abdulla bin Touq Al Marri, conducted an inspection to evaluate merchants' adherence to regulations aimed at preventing money laundering and financing of terrorism.** During the inspection, which took place recently, Al Marri focused on the compliance practices of traders and jewellers operating in one of Dubai's key retail and wholesale gold markets. The visit is part of the United Arab Emirates' broader initiative to enhance financial crime controls ahead of an upcoming international assessment of its anti-money-laundering framework. Key areas of review included customer due diligence, transaction monitoring, record-keeping, and the ability of businesses to identify suspicious activities in high-value transactions. The Minister emphasized the importance of ensuring that the gold and jewellery market operates with the highest compliance standards. He indicated that the inspection aimed to facilitate accessibility and the availability of accurate information, highlighting a dual approach of enforcement coupled with direct engagement with merchants. This reflects a commitment to fostering a compliant trading environment while maintaining open lines of communication with industry participants. In addition to the inspection, the Ministry of Economy and Tourism is establishing an anti-money-laundering task force specifically for the gold and jewellery sector. This initiative seeks to enhance oversight of dealers in precious metals and stones, ensuring that all stakeholders, including jewellers, refiners, wholesalers, and traders, adhere to the same risk-based compliance standards expected of other regulated sectors. The regulatory framework for gold and jewellery businesses categorizes them as Designated Non-Financial Businesses and Professions, subject to various obligations related to anti-money-laundering and counter-terrorism financing. Dealers are required to implement controls for transactions exceeding AED55,000 and to scrutinize payments that may be structured to evade thresholds or raise concerns regarding customer behavior. As the UAE aims to maintain the progress achieved after its removal from the Financial Action Task Force grey list in February 2024, the gold sector's significance is underscored by its potential for facilitating cross-border value transfer and converting illicit proceeds into tradeable assets. The total value of gold traded in the UAE reached approximately AED683 billion in 2024, equivalent to around $186 billion, highlighting the importance of regulatory consistency for international confidence in the market. To further elevate standards within the sector, authorities have implemented several measures, including a federal policy for the gold market and the UAE Good Delivery Standard for Gold. These initiatives are designed to enhance traceability, mitigate exposure to illicit financial flows, and align the market with global best practices. However, compliance challenges persist due to the complexity of the gold supply chain, necessitating a focus on responsible sourcing and the alignment of transactions with normal market behavior. For merchants in the Gold Souq, this inspection signifies a shift towards more rigorous and visible supervision tailored to the specific needs of the sector.

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