KYC, KYB and customer due diligence

The global standard for anti-money laundering and countering the financing of terrorism and proliferation is set by the Financial Action Task Force. The consolidated FATF Recommendations, in the version most recently updated in October 2025, require countries to ensure that financial institutions and Designated Non-Financial Businesses and Professions, a category that expressly includes dealers in precious metals and stones, must:1

Velcura’s own obligations arise under UAE federal law, and they were reset in late 2025.

If a counterparty’s policies, questionnaires or declarations still cite Federal Decree-Law No. 20 of 2018 or Cabinet Decision No. 10 of 2019, they cite repealed law. Velcura will ask for the updated version, and so, in our experience, will your bank.

Non-compliance carries administrative fines commonly cited in the range of AED 50,000 to AED 1,000,000 per violation, with substantially higher ceilings for serious cases, alongside licensing consequences and, in the gravest cases, criminal exposure for the entity and for the individuals responsible.

Gold carries a due diligence regime that sits on top of general anti-money laundering law and that has no equivalent in most other trades. It asks a different question. Anti-money laundering law asks who the money belongs to. Responsible sourcing asks where the metal came from, who was harmed in producing it, and whether every step of the chain can be evidenced.

The reference text is the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, third edition of 2016, together with its Supplement on Gold.9 It sets a five-step process: a company management system, identification and assessment of supply chain risk, a strategy responding to identified risk, independent third-party review, and public reporting. Every serious scheme in this market is built on those five steps.

The Ministry of Economy issued the Due Diligence Regulations for Responsible Sourcing of Gold, which follow the OECD five-step framework and became applicable from the audit period beginning 1 January 2023, with review reports submitted to the Ministry within 90 days of the completion of each review cycle.10, 11 Ministerial Decree No. (68) of 2024 extended the first three steps beyond refiners to the wider gold supply chain, so that traders, recyclers and other participants must also be able to demonstrate that the gold they handle did not originate in conflict conditions or under human rights abuses.10 Reviews are conducted by auditors on the approved list maintained under the UAE Good Delivery standard.12

Refiners on the London Bullion Market Association Good Delivery List operate under the Responsible Gold Guidance, version 9, and from 1 January 2026 under Disclosure Guidance version 3, which requires public disclosure of the identity of the refiner and the local exporter in locations flagged by the OECD Guidance, and of the countries from which mined material was received.13, 14, 15

The practical consequence is straightforward: a refinery cannot accept material whose chain it cannot document and disclose. Its questions travel down the chain, and the same questions travel on to a supplier. A gap anywhere in the chain stops the parcel, usually at the point where it is most expensive to stop it.

Velcura does not take title to, present for refining, or arrange transport for material where the lawful export from the country of origin cannot be evidenced by documents issued by the competent authority of that country. This is not negotiable and it is not a question of trust in any individual counterparty. Material that arrives without a complete export and customs record cannot be settled, cannot be banked, and exposes every party in the chain.

The European framework is relevant whenever a counterparty, a bank or a payment route touches the Union. It is currently in transition. Directive (EU) 2015/849, as amended and as transposed into national law, continues to apply until 10 July 2027.18 From that date the single rulebook takes over: Regulation (EU) 2024/1624 applies directly in all Member States, Directive (EU) 2024/1640 governs national mechanisms including beneficial ownership registers, and the Authority for Anti-Money Laundering in Frankfurt, operational from 1 July 2025, coordinates supervision.16, 17

Three points matter here. Traders in high-value goods, including precious metals and stones, are obliged entities in their own right above defined thresholds. Cash payments in a business context are capped at EUR 10,000 across the Union. And beneficial ownership identification moves from self-declaration towards evidenced verification. European counterparties should expect to be asked for the same documentation their own supervisor will shortly require of them.

Switzerland matters to this trade because much of the world’s refining capacity sits there. The framework is built on the Anti-Money Laundering Act and the FINMA Anti-Money Laundering Ordinance, under which entities within its scope must not accept assets of criminal origin, must establish the identity of clients and beneficial owners, must clarify the economic background of unusual transactions, and must retain adequate documentation.19, 20

On 1 October 2026 a revised Act enters into force together with the new Federal Act on the Transparency of Legal Entities and the Identification of Beneficial Owners, which creates a central, non-public federal register of beneficial owners with transitional registration periods running from that date.21 Swiss counterparties should anticipate that the beneficial ownership information they provide will need to match what they file.

United States rules reach this trade in two ways, and the second is the one that bites. First, under the Bank Secrecy Act and its implementing regulations, dealers in precious metals, stones and jewels are treated as financial institutions for anti-money laundering purposes and must maintain written anti-money laundering programmes.22

Second, and more importantly for a Dubai counterparty, any settlement that clears in US dollars passes through the US financial system and is therefore exposed to the sanctions administered by the Office of Foreign Assets Control. A correspondent bank will block first and ask later.

One recent change should be noted, because outdated compliance packs still assert the opposite. Beneficial ownership reporting under the Corporate Transparency Act no longer applies to entities formed in the United States or to US persons. FinCEN issued an interim final rule to that effect in March 2025 and made the position permanent by a final rule effective 14 August 2026; only entities formed abroad and registered to do business in a US State remain in scope.23, 24 This changes a filing obligation in the United States. It does not reduce anything Velcura is required to collect under UAE law.

The full file is requested at the outset, typically at the stage of a letter of intent, an offer or a first indication of a transaction, and before detailed terms are discussed, a parcel is introduced to a refinery or a bank is approached. There are four reasons.

The exact file depends on the counterparty’s role and on the risk profile of the transaction. The following is the normal scope. The consignment table is the part specific to gold, and it is where files are most often incomplete.

Where a transaction involves a conflict-affected or high-risk area, a politically exposed person, an unusually complex structure, or a route or settlement pattern that does not follow the commercial logic of the deal, enhanced measures apply. In practice that means independent corroboration rather than declarations, documentary evidence of source of funds and source of goods, and approval at management level before the position proceeds.

All counterparties and their beneficial owners are screened against the United Nations Consolidated List, the UAE Local Terrorist List, and the sanctions and adverse media sources applicable to Velcura and to its banking partners, at onboarding and periodically thereafter. Screening is not risk-dependent and applies regardless of transaction size.

Business relationships are monitored on an ongoing basis, and transactions are checked for consistency with what is known of the counterparty and its business. Records of identification, transactions, correspondence and analysis are retained for at least five years.

Where information held becomes outdated, or where ownership, control, authorised signatories or banking arrangements change on the counterparty’s side, Velcura asks to be told promptly. A change discovered by a bank before it is disclosed is treated as a risk indicator.

Information provided in the course of due diligence is handled under strict confidentiality and applicable data protection rules, including the UAE Personal Data Protection Law, Federal Decree-Law No. (45) of 2021, and, where a counterparty falls within its scope, the EU General Data Protection Regulation.

The data is used solely to meet legal and regulatory obligations, to protect the integrity of the transaction, and to satisfy the compliance requirements of banking, refining and institutional partners. It is not disclosed to third parties beyond what is necessary for those purposes or what is required in response to a lawful request from a competent authority. Documents are held in access-controlled storage and retained for the statutory period.

For a serious counterparty this framework is a safeguard rather than an obstacle. It increases the willingness of reputable banks, refineries and institutional partners to work with the chain you are part of. It reduces the risk that a transaction is blocked, reversed or investigated at the point where the metal has already moved. It protects every party from inadvertent involvement in money laundering, sanctions breaches or the financing of conflict. And over time it is the only thing that makes a supply relationship bankable, which is to say repeatable.

Requests for KYC, KYB and due diligence documentation are therefore best treated not as a formality but as a working part of the transaction. Questions about what is required in a specific case, or about the legal basis for any individual request, are answered on request.