UAE’s gold and jewelry industry is going to witness the biggest change ever, as the UAE government has decided to implement new laws to ensure more transparency in sectoral operations.
As per the new changes, there will be a special committee to oversee the operations of the industry, while a database will be prepared to list all entities involved in the handling of gold directly or even indirectly.
More importantly, a ‘UAE Good Distribution Standard’ will also be implemented, which will have a huge effect on local gold refiners and the wider metal trade. The Standard would clearly describe how bullion (physical gold and silver) should be sourced and used by local refiners and everyone involved in the venture, according to the industry sources.
There are numerous refineries in the UAE, mostly owned by private companies. Much of what they bring out end up as exports.
According to an industry source, “Once put into practice, this will immediately raise the level of transparency across the gold trade, including refining. We are not talking about minimum standards – the latest UAE Government policy on gold and jewelry goes well beyond that. This is on par with just about all the updated international standards in place for the gold business.”
What is meant by ‘UAE Good Distribution Standard’?
UAE Good Distribution Standard will be considered as the “Standard for Quality and Technical Specifications for Gold Production” in the UAE. There will be a set of rules that describe the physical properties of the gold used in the settlement within the wholesale trade. The standard also sets the criteria for creditworthiness, efficiency, and appropriate production procedures, ensuring high-quality gold production.
The gold trade in the UAE was raised to the level of a high priority industry just over a year ago, and the federal government declared that it will work to boost the country’s profile as one of the global gold or jewelry hubs.
Dubai, with its ‘City of Gold’ status, remains the main focus of the gold trade in the region. But the industry is changing, and at the same time, maximum transparency in the sourcing, usage, and distribution of gold is needed.
“Such transparency will also help UAE or Dubai to compete with other regional centers that aspire for a piece of the action. With the UAE Good Delivery Standard, the country will raise its benchmarks,” stated a reliable source.
As in diamonds
The global diamond trade is already working under strict sourcing laws, with the “Kimberley Process” banning any precious stones from being traded from conflict-ridden countries or zones. The gold market also has its own controls and balances, allowing all parties involved in these transactions to trace all aspects of its origin.
According to a metal trader in the region, “The global bullion market is moving towards greater transparency, led by government initiatives and industry groupings such as the LBMA. Across every industry, the ESG (environmental, social, and governance) movement is becoming influential, and that’s why every effort must be taken to encourage best practices.”