HOW DOES DIJLLAH GOLD MITIGATE MONEY LAUNDERING AND THE FINANCING OF TERRORISM RISKS IN DUBAI?

From refineries to bullion reserves to gold trading, Dijllah Gold is one of the largest precious metal dealers in the region. Dijllah Gold strictly follows the international standards of AML/CFT (Anti-Money Laundering and Combating the Financing of Terrorism) controls, to exercise their statutory obligations of identifying, assessing, and mitigating the risks of money-laundering, the financing of terrorism, and the financing of illegal organizations under the legal and regulatory framework enforced in the UAE.

Dijllah Gold Refinery is deeply committed to combating money laundering and the financing of terrorism and illegal organizations. It is well known to adhere to the legislative, regulatory, and institutional frameworks for preventing, detecting, and deterring financial crimes, including Money Laundering and the Financing of Terrorism throughout its modus-operandi.

They also continue to work towards improving their effectiveness and reinforcing the capabilities by implementing the internationally accepted standards recommended and promoted by MENAFATF (the Middle East and North Africa Financial Action Task Force), FATF (Financial Action Task Force), and the other FSRBs (FATF-Style Regional Bodies), as well as by the United Nations (UN), the World Bank and the International Monetary Fund (IMF).

AMT /CFT INTERNATIONAL STANDARDS IN DUBAI

When thinking about security standards, whether or not the precious metal is safe, it is essential to have stringent security. Precious metals attract money launderers and terrorist financiers.

The trade is conducted on a cash basis, and it is highly negotiable worldwide. Gold is easy to smuggle. It can be cast, melted, and formed in different shapes. Gold also has high malleability and ductility. Because of this, a large stack of Gold is easy to transport.  

The exchanging of money in bulk for Gold had been in practice for years. The community that preserves Gold has raised its voice against the act of financial terrorism and money laundering and urged to implement AML/CFT controls. The cases were abundant and getting out of count. However, after implementing the act and regulations, crime rates have been reduced to a large extent. And therefore, a significant shift in the global economy has been observed, resulting in an increased demand for balanced value commodities and investments. 

Dijllah Gold(Dijllah Gold Refinery FZC) was one of the first organizations to adopt the AML/CFT laws to ensure the effective implementation and supervision of the framework to support the strategic initiative of combating Money Laundering and the Financing of Terrorism.

Implementation of the AML/CFT Standard to Stop Gold Laundering

Every element is tested uniquely, and so is Gold. The AML/CFT standard compliance runs through several tests depending on internal policies, procedures, and controls. 

Below are 4 major FATF (Financial Action Task Force) guidelines that are implemented in the following manner: 

FATF R1: The gold reserve faces many risks. These risks are properly assessed first. Further, a risk-based approach (RBA) is applied and monitored. This allows the authorities to provide more resources to the monitoring of the Gold in case the company is receiving high amounts of threats. 

FATER 22: FATF simply refers to dealers in precious metals and stones. The second recommendation requires gold dealers to procure Customer Due Diligence (CDD) measures. Transactions have to be safely carried out at such locations. Therefore, if any transaction is performed in cash equal to or above a threshold, such information is constantly monitored. Consequently, these dealers are required to know their customers and collect data for safe payment.  

FATF R.23: this policy requires the gold dealers to send suspicious transaction reports if any robbery or unacceptable behavior is witnessed. The action is immediately reported to the Financial Intelligence Unit (FIU) for analysis if the dealer suspects any criminal activity during transactions. 

FATF R.28: Dealers are regulated and monitored for compliance with AML/CFT requirements, such as CDD, records, and reports. One must be thorough with the former tasks as a large amount of Gold

is at stake. Furthermore, the guilty and his associates must be prevented from accreditation, license, and curbed from being the beneficial owner of a dealership management function. 

BENEFITS OF AML/CFT FORMULATION TO STOP GOLD LAUNDERING

● The FATF (Financial Action Task Force) recommendations, CDD (Customer Due Diligence), Enhanced Due Diligence (EDD) and recordkeeping helps combat illegal mining. Moreover, the AML/CFT controls prevent other environmental crimes and human trafficking. 

● Smuggling is very common. Gold being highly malleable can be easily beaten into thin sheets. Therefore, blocks of Gold can be melted and transported to different States. The AML/CFT action prevents the Gold from being illegally moved out. Furthermore, the purpose of the movement is checked, and the identity of the transporter is cross-checked. 

● Implementing the AML/CFT framework

leads to the registration and formalization for the increased transparency in transactions. This made the tax laws easier to enforce. Dealers in precious metals and stones are subjected to monitor and ensure compliance as per the framework's requirements. 

● A well-established concept of a risk-based approach (RBA) eases the identification and assessment of ML/FT risks. According to its framework, enhanced due diligence should be performed in cases where high risks are identified. In contrast, simplified due diligence may be performed in instances where low risk is identified, unless there is suspicion of ML/FT.

IN A NUTSHELL, being one of the strongest players in the Precious Metals Industry in the UAE, Dijllah demonstrates effective compliance with the directives of the legislative authorities of the UAE with regards to global AML/CFT watchdogs such as the United Nations (UN), the World Bank, Financial Action Task Force (FATF) and the International Monetary Fund (IMF).

The organization's work process focuses on establishing, documenting, and updating AML / CFT policies regularly to identify and assess risks related to money laundering. Moreover, it always applies sufficient AML/CFT mitigation measures using a risk-based approach (RBA), such as performing Customer Due Diligence (CDD), and where necessary Enhanced Due Diligence (EDD). They are the core preventive measures that help identify and manage all customers' risks, particularly higher-risk customers. 

Nevertheless, Dijllah’s HR policy firmly maintains a robust AML/CFT mitigation framework, such as appointing an AML/CFT Compliance Officer and training staff to educate their employees and improve their awareness of anti-money laundering measures and policies. Also, conduct regular onsite inspections and developing supervisory strategies for each dealer.