UAE’s Gold Trade Moves Closer to ‘Responsible Sourcing’

“So far, individual businesses in the local gold trade have signed up to this “responsible jewellery sourcing” requirements,” said Abdul Salam K.P., a member of Dubai Gold and Jewellery Group and Executive Director at Malabar Gold & Diamonds. “More will follow, and the DMCC (Dubai Multi Commodities Centre) is the entity overseeing the process.”

One of the main requirements is that everyone in the business needs to clear a two-step process on each purchase. The gold sold should be traceable to “two suppliers who dealt in it previously”. “If you cannot identify this, the deal should not go ahead,” said Salam.

Industry sources point out gold coming in from “informal mining sources” is not a problem at the retailer level. “Instead, it’s something that refiners everywhere need to guard against,” said Cyriac Varghese, General Manager at Sky Jewellery. “Non-certified gold could come in the form of granules straight to refiner factories, escaping duties. The factories could buy these granules at a discount, refine and convert them into bars.

“Retailers don’t take raw gold, so the process would work best at the refiner level more than anything else. But from an industry perspective, if all those in the business sign up for this certification, it will create more transparency across the board.”

So far, the DMCC has been engaged in educating the trade on ethical sourcing and how to ensure a business can conform to best practices. According to Salam, the process could be tightened up further, if needed, by excluding businesses who do not conform from dealing in government tenders, etc.