“Dubai is simply the best organized, regulated and competitive market in the world for gold and diamond jewelry. 1www.gold.org/goldhub/research/gold-demand-trends/gold-demand-trends-full-year-2017/jewellery If you are a visitor to the UAE and have purchased gold jewelry or artifacts, you can claim the VAT refund at the airport. President His Highness Sheikh Khalifa bin Zayed Al Nahyan has enacted a federal law on precious metals and jewellery in the UAE. This decrease was not purely related to VAT. The contacts I met showed how the struggling economy led to job cuts, especially in expat-dominated industries, which put pressure on the real estate sector. The demand for gold jewelry is a victim of the negative wealth effect. 5 This applies to gold transported by hand. Four documents are required for air cargo gold: an import declaration, an air waybill, a delivery note and an original invoice. However, none of them is an export permit or a certificate of origin; Anyway, most of the gold is now transported by hand. See Alan Martin and Bernard Taylor, “All That Glitters Is Not Gold: Dubai, Congo, and the Illicit Trade of Conflict Minerals,” Partnership Africa Canada, May 1, 2014, www.africaportal.org/publications/all-that-glitters-is-not-gold-dubai-congo-and-the-illicit-trade-of-conflict-minerals/. 14. Under Law 31-article, persons involved in the counterfeiting of precious metal hallmarks and/or precious stone jewellery certificates or in the sale, offering, possession or trade of jewellery bearing counterfeit hallmarks or certificates shall be liable to imprisonment for at least two years and/or a fine of AED 500,000 to AED 1000,000.

President His Highness Sheikh Khalifa Bin Zayed Al Nahyan has signed into law a federal law that regulates the trade, hallmarking and certification of precious metals and stones, as well as gold, silver and platinum jewelry. 
 Persons involved in the trade of jewellery made of precious metals or stones without proper hallmarking or certification by authorized institutions will be sentenced to one year`s imprisonment and/or a fine of between AED 250,000 and AED 500,000. • Mandatory hallmarking is imminent. The UAE will introduce mandatory minting (hallmarking) for gold jewellery. This will help protect consumers – and trade – from fraud, increase the credibility of the UAE`s gold jewellery market and support international trade in these metals. 8 “City of Gold: Why Dubai`s First Conflict Gold Audit Never Saw the Light of Day”, Global Witness, February 2014, www.globalwitness.org/sites/default/files/library/dubai_gold_layout_lr.pdf. The main message is that the demand for jewelry is still suffering due to the recent tax change. As a reminder, January 1, 2018 marked an important change for consumers in the UAE: for the first time, they had to pay VAT. The 5% consumption tax has been well marked by the government.

And the reaction to demand for gold jewelry was not surprising: it increased in Q4 2017 before the tax change, before collapsing after it went into effect. The demand for gold jewelry in 2018 was only 36-25% lower than the previous year. For years, buying jewelry in the gold souks in Dubai has meant not only high-quality workmanship and variety of design, but also assured purity. The relentless vigilance of the Dubai government also deserves recognition for the clear and long-standing trust of buyers in the company. In addition to conducting mandatory appraisals, government agencies are known to visit jewelers unexpectedly to unexpectedly assess the purity and price of their goods. “There are no restrictions on how much gold you can bring, and there are no restrictions on how much you can withdraw, whether in the form of bars or jewelry,” he said. The assessment begins with verifying retailers` compliance with local and federal regulations, the suitability of jewelry labeling, and product quality assurance. The inspector(s) will record the results while monitoring the outlets to ensure compliance with the rules. Voluntary certification complements the inspection required by the DCLD of the quality of shop standards and the purity of gold jewellery sold. Typically, authorities inspect a retailer`s store at least three times a year. In a strong spirit of consumer protection, the law requires jewelers to sell gold jewelry that bears the purity mark of the precious metal.

When a buyer asks for it, jewelers are known to be happy to meet and display the seal of approval as a sign of their commitment to quality and compliance. The brand is usually the manufacturer`s stamp and the caratage stamped on the jewelry The Chairman of the Emirates Authority for Standardization and Metrology (ESMA) noted that the UAE`s annual consumption of gold, gemstones and pearl jewelry is estimated at AED 60 billion, while the sector accounts for 37 percent of the country`s non-oil trade. Jewelry buyers should be aware that fees when reselling jewelry in Dubai are not counted. and jewellers are not required by law to take back gold or jewellery already purchased, a senior official from Dubai Economy`s consumer protection department said. We urge consumers who buy jewelry to make sure of the gold price and manufacturing cost, which vary depending on the different jewelry models. Buyers should also be aware that manufacturing costs are not taken into account when reselling jewelry, as they only buy raw gold. When a piece of jewellery is redesigned or used to make a new item, the value of the manufacturing can be restored,” said Mohammed Ali Rashed Lootah, CEO of Commercial Compliance & Consumer Protection (CCCP) at Du Economy.Au bai. According to UAE law, the consumer is defined as any person who receives goods or services to meet their personal needs. Therefore, those who wish to sell gold and jewelry are not considered consumers, and the trader has the right to set the terms of the purchase process within the framework of the commercial rules and conditions agreed between the two parties. Official figures show that gold, jewellery and diamonds were the most traded commodities in terms of value in 2019, contributing AED 370 billion to Dubai`s non-oil trade of AED1.37 trillion. AED 169.5 billion of gold was traded last year, while jewellery was traded AED 116.6 billion and diamonds AED 83.9 billion. Jewelers shared the trend of the local market, revealing that most new jewelry is usually bought by tourists, while residents tend to sell their existing jewelry and buy new designs.

Lootah added that the regulations and procedures put in place to maintain the attractiveness of the market and guarantee the rights of traders and consumers have complemented the growth of the local gold and jewellery sector. Gold and jewelry purchases accounted for just 0.5 percent of total consumer complaints received in 2019, according to Dubai`s annual report Economy.waheedabbas@khaleejtimes.com In addition, the federal tax authority imposes a 5 percent import duty on gold jewelry, although no customs duty is payable on the re-export of jewelry. This happens in the UAE as the country is a hub for the rest of the Middle East and some jewelry is imported and re-exported to countries in the region. Dubai`s efforts to maintain the reliable status of its gold are not limited to hallmarking jewelry, certifying retailers, and inspecting jewelry sold in the marketplace. There are other initiatives – Dubai Good Delivery (DGD) and Market Deliverable Brand (MDB) – that cast a net wide enough to cover not only the quality of refining and production, but also responsible sourcing. If a traveller wants to import more gold jewellery, they must declare the amount to customs and pay import duties to the government. Gold jewelry is also subject to a 5% VAT, although this VAT is passed on to it when retailers sell the items to their customers. The UAE is one of the largest importers and re-exporters of gold and jewellery, partly because there is no import tax or VAT on imported gold bars into the country. Certification is granted to stores that follow true and fair practices for the jewelry trade. Companies and stores that have Bareeq certification can display it on their premises and in advertising. According to the inspection reports, the compliance rate is 98%, that is, only 2% of jewelers have committed fraud.

And often, it`s involuntary. Most of the problem occurs with imported jewelry, which is not the purity indicated in the packaging and is unique in the countries from which the piece originates. The purity of gold jewellery sold in Dubai is ensured by the Dubai Central Laboratories Department (DCLD) through Bareeq certification. These problematic practices therefore raise the question: does the DMCC give false legitimacy to gold transiting through the jurisdiction from high-risk sources? In accordance with Article 3 of the Legislative Decree (VAT) and Article 36 of the Implementing Regulation (VAT), final consumers of gold, diamonds and gold and diamond jewellery are subject to the standard VAT rate of 5%.