Dealers in Precious Metals and Stones (DPMS) operate in one of the most closely monitored sectors under the UAE’s Anti-Money Laundering framework. Gold, diamonds, gemstones, and high-value jewelry are attractive to criminals due to their portability, liquidity, and global tradability. As a result, businesses in this sector are subject to strict reporting obligations, including the requirement to file a Dealers in Precious Metals and Stones Report (DPMSR).

For audit, accounting, tax, and advisory firms supporting DPMS businesses, understanding how to properly file a DPMSR is critical. Inaccurate, delayed, or incomplete reporting can lead to penalties, regulatory scrutiny, and reputational damage.

Understanding DPMS reporting obligations in the UAE

DPMS entities are classified as Designated Non-Financial Businesses and Professions (DNFBPs) under UAE AML laws. They are required to conduct customer due diligence, maintain records, monitor transactions, and submit relevant reports when thresholds or suspicion criteria are met.

A DPMSR is typically required when certain high-value cash transactions occur or when specific reporting thresholds are triggered. Filing this report correctly demonstrates that the business is actively monitoring risk exposure and complying with regulatory requirements.

Why high-value sectors are vulnerable to financial crime

High-value goods sectors, including precious metals and stones, share risk characteristics with real estate. Criminals prefer real estate because properties are high in value, allowing large sums of money to move in a single deal. Real estate has historically been less regulated than banks, making it easier to conceal beneficial ownership or obscure the origin of funds. Once money is invested in property, it becomes harder to trace or seize, and in some countries this activity has inflated property prices and harmed communities.

Precious metals and stones present similar vulnerabilities. Gold and diamonds can store significant value in compact form, be transported across borders, and converted quickly into cash. Without strong AML controls, these assets can be used to layer or transfer illicit funds.

Because of these risks, DPMS entities are expected to apply rigorous due diligence and reporting controls.

The role of the risk-based approach in DPMS reporting

A risk-based approach (RBA) is central to AML compliance in the UAE. Rather than applying identical controls to all clients and transactions, businesses must identify where money laundering and terrorist financing risks are highest and respond proportionately.

Guidance from the Financial Action Task Force emphasizes that professionals must assess risk exposure and apply enhanced measures where necessary. High-risk clients, large cash transactions, and unusual transaction patterns require greater scrutiny.

For DPMS entities, this means that filing a DPMSR should not be viewed as a mechanical process. It should be part of a broader framework that includes client risk assessment, transaction monitoring, and escalation procedures.

Step 1 Identify reportable transactions

The first step in filing a DPMSR is determining whether the transaction meets reporting thresholds or triggers regulatory requirements. Businesses must monitor high-value cash transactions and identify patterns that may indicate structuring or unusual behavior.

Staff should be trained to recognize situations where multiple smaller payments are made to avoid reporting thresholds. These scenarios often require enhanced review and may still trigger reporting obligations.

Step 2 Conduct proper customer due diligence

Before filing a DPMSR, the business must ensure that Know Your Customer procedures have been properly conducted. This includes verifying customer identity, collecting identification documents, and identifying ultimate beneficial owners where corporate entities are involved.

Understanding the client’s business activities and the purpose of the transaction is essential. If the transaction appears inconsistent with the customer’s profile, additional checks may be required.

Step 3 Verify source of funds where necessary

For high-value transactions, especially those involving cash, businesses should assess the origin of funds. While DPMSR filing may be threshold-based, unusual funding patterns or unexplained wealth may require enhanced due diligence.

Source of funds analysis is particularly important in sectors dealing with easily transferable high-value assets.

Step 4 Register and access the reporting system

DPMSR filings in the UAE are generally submitted through the relevant regulatory reporting platform designated for AML reporting. Businesses must ensure that they are properly registered and that authorized personnel have access credentials.

The MLRO or designated compliance officer typically oversees the submission process.

Step 5 Complete the report accurately

When preparing the DPMSR, accuracy is critical. The report should include complete transaction details, customer information, and supporting documentation where required.

Information must be consistent with internal records and due diligence documentation. Errors or inconsistencies can lead to follow-up inquiries from regulators.

Step 6 Maintain documentation and audit trail

After submission, businesses must retain all supporting records, including customer identification documents, transaction receipts, and internal review notes.

Proper recordkeeping ensures that the organization can demonstrate compliance during inspections and respond effectively to regulatory queries.

Supervisory expectations in the UAE

AML/CFT supervision in the UAE is led by the Anti-Money Laundering and Combating the Financing of Terrorism Supervision Department under the oversight of the Central Bank of the UAE.

Supervisors assess whether DPMS entities:
– Conduct regular risk assessments
– Apply enhanced due diligence for high-risk transactions
– File required reports accurately and on time
– Maintain effective internal controls

Where sectors are still developing compliance maturity, regulators may apply closer monitoring and conduct targeted inspections.

Common mistakes when filing DPMSR

Incomplete customer identification is a frequent issue. Failure to identify beneficial owners in corporate transactions weakens reporting quality.

Late filing can result in penalties or increased scrutiny.

Treating threshold-based reporting as a substitute for suspicious transaction reporting is another common weakness.

Failure to train frontline staff to recognize reporting triggers often leads to missed obligations.

Practical steps to strengthen DPMS reporting compliance

Businesses can enhance compliance by implementing structured due diligence checklists and automated transaction monitoring tools.

Regular AML training ensures employees understand reporting triggers and documentation requirements.

Internal escalation procedures should clearly define when compliance officers must review transactions.

Periodic internal audits can identify gaps in reporting processes before regulators do.

Engaging experienced AML advisors in the UAE can help DPMS entities design robust reporting frameworks aligned with regulatory expectations.

The precious metals and stones sector plays a critical role in the UAE economy. At the same time, it carries inherent financial crime risk due to the high value and liquidity of assets involved. Filing a Dealers in Precious Metals and Stones Report correctly is not just a regulatory requirement—it is a key component of responsible risk management. Businesses that integrate risk-based controls, strong due diligence, and accurate reporting are better positioned to maintain compliance and protect their reputation.