The Dubai Multi Commodities Centre (DMCC) said it will step up its fight against money laundering by ensuring transparent trade in gems and precious metals.
Dubai, a leading centre for the import and re-export of gold and known as the City of Gold, is also becoming an important diamond hub.
Authorities are keen to promote the city as a place that cracks down on illegal financial activities.
A senior DMCC official said several procedures have been put in place to support domestic and global efforts aimed at fighting money laundering and the financing of terrorism.
DMCC operates the Dubai Gold and Commodities Exchange (DGCX) and Dubai Diamond Exchange (DDE).
Ahmad Bin Sulayem, chief operating officer of DMCC, told Gulf News the centre only accepts those trading members whose sources of funds can be "reasonably established as legitimate."
"If a company applies for DMCC membership and we are even a little uncomfortable it does not get through," Bin Sulayem said in an interview.
He said global criminals and terrorists can use any form of business for money laundering but the gold, diamond and property trades attract them more.
All three sectors are booming in Dubai.
"So we have to take extra care and we have to set systems in place to prevent illegal activities happening under our umbrella," Bin Sulayem said.
According to DDE, the total trade in rough diamonds was about $2.41 billion between January and August 2006.
Certified
Gold trade through Dubai reached $14.7 billion in 2006, up 37 per cent from 2005, according to DGCX.
Bin Sulayem said DMCC is committed to the UN-backed Kimberley Process, which bans trading in conflict diamonds."We set up the Kimberley Process a few years back to eliminate the trade in conflict diamonds. It has been progressing very well," he said. Under the process, rough diamonds are sealed in tamper-proof containers and certified conflict-free by a system of forgery-resistant documents and serial numbers.
The papers are certified each time a rough diamond crosses an international border.
From next month DMCC will start training programmes for its staff and members so that they can help in countering illegal activities.
The training focuses on the "identification, verification and know-your-customer" measures.
Colin Griffith, chairman of DGCX, said the exchange falls under the Emirates Securities and Commodities Authority (Esca) and this provides additional safeguards against money laundering.
The exchange does not accept cash from its members and deals with them only through banks, he said.
http://www.gulfnews.com/business/Commodities/10104066.html
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