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MoCI to issue 2nd set of decisions to regulate precious metals sector

E-record aims to fight money laundering

KUWAIT CITY, July 15: The Ministry of Commerce and Industry (MoCI) is preparing to issue a second set of decisions to regulate the precious metals sector, including requiring gold and jewelry shops to create an electronic record, reports Al-Rai daily quoting related sources.

The sources pointed out that the idea of the electronic record is to disclose in detail the names of corporate clients, the sales movement of each customer, the volume of purchases, and the number of times precious metals are bought, indicating the quantities bought, and of course oblige the customer to sign the ‘know your customers’ source of funds.

The sources pointed out that the ministry’s action in this regard coincides with the global and local procedures that regulate anti-money laundering operations and the financing of terrorism.

The ministry pointed out it will link the adoption of the electronic registry with the renewal of gold shop licenses. The sources said that the existence of an electronic record showing the purchases and identities of dealers in precious metals, will contribute to clean the gold market significantly from any suspicious operations, especially as the application of this procedure requires an increase in the number of checks conducted by the assignee on the data of their customers.

The processes that are carried out, and ensure that they are consistent with the identity of the real trader and his true financial solvency. In a related context, sources learned that after the traders of precious metals are obliged to announce the prices of the factories in their shops, the ministry is seeking to standardize the selling prices of gold before the calculation of making charges (workmanship) in all shops, after having detected a difference in prices of up to about 300 fils per gram.

The sources pointed out that the ministry recently reviewed with officials in the sector its dissatisfaction with the existence of more than one price of gold, pointing out that this discrepancy may expose the consumer to commercial fraud when buying precious metals, stressing the keenness to set a uniform daily price for the sale of gold in all shops.

Gold prices may see some slight variation in the price of various calibers as they are subject to the supply and demand mechanism, which changes with the rise or fall of the global market, and directly linked to the dollar prices in the parallel market of the dollar and the banking market.

The variation in prices is because each place determines its prices based on the prices of a particular international stock exchange, pointing out that the changes recorded between these exchanges lead to the presence of more than one price in the local market.

In contrast to this discrepancy, the ministry suggested that the price of gold be determined domestically by setting a daily average that combines the announced prices of the largest international gold exchanges, specifically the Tokyo, London and Dubai bourses, adding 50 dinars per kilo of gold, to the proposed premium, and then set a uniform price for the sale of gold on a daily basis.

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