World gold Council
Works with DMCC in Dubai to Stop Hand Carry of Gold by Air Passengers
Currently, there is no
accepted standard globally for passengers carrying gold bars, coins and
jewellery in their luggage
The
World Gold Council (WGC) will work with Dubai to tackle challenges associated
with hand-carried gold. Andrew Naylor, head of Middle East and Public Policy,
WGC, told Khaleej Times that gold transported in the hand luggage of passengers
poses specific challenges like “risks related to the legitimacy of the gold's
origin, potential for financial crimes, and compliance with international
standards”.
The
council — which recently opened a new office and regional headquarters for the
Middle East in the Dubai Multi Commodities Centre (DMCC) — had last year
announced a project to address the challenges posed by the illicit trade of
hand-carried gold.
“Alongside
the DMCC, we plan to address these issues by enhancing regulatory frameworks,
improving surveillance and enforcement mechanisms, and promoting strict
adherence to due diligence practices. These efforts aim to ensure that gold
trading globally is conducted responsibly and in line with global best
practices,” said Naylor.
There
is no accepted standard when it comes to passengers carrying gold bars, coins
and jewellery in their luggage. While some countries impose limits on how much
yellow metal can be carried, others require travellers to declare them.
Announced
in November 2023, the council’s project is set to “strengthen and standardise
international regulations and procedures, addressing a crucial gap in the
responsible sourcing and trade of gold”.
The
project aims to result in a set of policy recommendations that will address the
forms of gold that can be hand-carried, definitions of acceptable personal
limits, and the establishment of standardised customs declaration and digital
tracking processes.
Ahmed
bin Sulayem, executive chairman and chief executive
officer, DMCC, had said then that stricter measures on hand-carry gold are an
“urgent priority”.
Retail
gold principles
As
it announced the opening of its new office in Dubai, the WGC said it has signed
an agreement with the DMCC to advance the gold industry within the UAE. It
includes implementing the council’s retail gold investment principles in Dubai.
The
voluntary framework — which has been launched in several markets around the
world including India, Germany, Singapore, and the US — ensures gold sellers
around the world adhere to a set of universal, best practice principles “that
will help customers feel confident and trust in the gold they invest in”.
“These
voluntary principles work side-by-side with our Gold Guidance to help the
investor differentiate between providers, understand which products are the
most suitable for them and ultimately equip them with the knowledge they need
to responsibly invest in gold.
“The
ultimate goal is to foster a gold investment landscape in the UAE that is
resilient, sustainable, and aligned with the best interests of both the industry
and its participants,” said Naylor.
Safe
haven asset
Referring
to Dubai as a city with a deep-seated cultural affinity for gold, Naylor said
the metal is considered a “safe-haven asset, offering portfolio
diversification, long-term returns, and a source of liquidity”.
“The
prospects for gold investment in Dubai remain robust, supported by strong
market infrastructure, extensive trading networks, and a stable investment
environment. Investors in Dubai are well-positioned to capitalise on the
intrinsic and enduring value that gold offers, especially in times of economic
uncertainty,” he said.
Gold
prices hit record highs in the UAE last Thursday, with the 24K variant of the
precious metal trading at Dh266.75 per gram as compared to Dh261.75 the
previous day.
Market research
One
key area for the council is conducting gold market research in Dubai. This
entails analysing various facets of the market, including demand and supply
dynamics, investment trends, trade flows, and regulatory landscapes.
“Through
working with our partners, the research will focus on understanding the unique
attributes of the UAE and regional gold market, consumer perceptions of gold,
the role the UAE and the region plays in the global gold market, identifying
opportunities for growth, and addressing potential challenges. This endeavour
will provide valuable insights that can inform policymaking, enhance market
efficiency, and foster sustainable development in the gold sector.”
According
to Naylor, the council’s new office in Dubai signifies a strengthening of the
gold industry in Dubai and the UAE as a whole. It will lead to “enhanced global
market integrity, increased innovation, and greater investment in the gold
sector within the region”.