UAE endorsed a global initiative by the Organisation for Economic Cooperation and Development yesterday to curb the trade in gold from conflict zones.
Dubai embraces global ethics effort on 'conflict gold'
The Dubai Multi Commodities Centre (DMCC), which helps to promote the local trade in precious metals, yesterday endorsed a global initiative to curb the market for gold mined in conflict zones.
The UAE came under scrutiny two years ago after a report by the United Nations on the Democratic Republic of the Congo said customs officials in the Emirates had allowed shipments of gold into the country with "minimal documentation" and without requiring importers to say where their metals were purchased or would be sold.
Dubai is a long-established market for gold bullion and jewellery. Its trade is fuelled by demand from India, the world's number one gold consumer.
The new guidelines require traders to track the metal from the mine to the jeweller or bank vault.
"DMCC recognises the imperative to ensure that Dubai remains at the forefront of this global trade sector, which requires the highest regulatory and ethical standards for both our member companies and the global trade of gold," said Ahmed bin Sulayem, the executive chairman at the free-zone authority, which is based in Jumeirah Lakes Towers in Dubai.
"Its purpose is to assist DMCC-licensed members and other industry participants in the UAE to enforce acceptable standards of due diligence and responsible supply-chain management when sourcing gold and precious metal from conflict-affected and high-risk areas," Mr bin Sulayem said.
The new rules echo the Kimberley process for diamonds.
That 2003 protocol restricted the global trade in diamonds mined from conflict zones such as Sierra Leone.
The Organisation for Economic Co-operation and Development (OECD), a group comprising 28 industrialised economies, invited the UAE and India last year to be part of the drafting process.
The DMCC published a practical guide tailored for the UAE in the spirit of the OECD's due-diligence manual.
It introduced a certification programme that will be available to members first and then will be gradually offered to non-members.
The regulator will periodically audit companies to ensure that they maintain standards to keep the DMCC certificate.
Mohamed Shakarchi, the owner of Emirates Gold,a refinery in Dubai, said the new rules would make it more difficult for warlords to smuggle gold out of conflict zones.
"We'll finish from the gold warlords," he said. "The regulations will bring more benefit to the owners offering the concessions to mine, it will make the trade more transparent, and return some of that money to those countries that are already in need."