All That Glitters Is Governed: Global Rules, Gold Trade and the Legal Framework

Gold has long been both a financial safe-haven and a complex cross-border commodity. When prices climb, as they have recently, the legal and regulatory scaffolding around gold -- spanning trade law, customs, anti-money-laundering (AML) rules and responsible-sourcing mandates -- becomes especially important. This report explains the principal international legal regimes that govern gold trade and how two major hubs, the UAE and India, have adapted their rules to balance trade, market integrity and security.

 

The International Architecture

At the broadest level, cross-border trade in gold is subject to classical trade and customs disciplines. World Trade Organisation (WTO) agreements govern import licensing procedures, tariffs and non-discrimination obligations that apply to goods of precious metal. While members can impose import/export restrictions, such measures must conform to WTO commitments and national schedules; routine trade in bullion and manufactured gold articles therefore moves within this existing trade law framework.

 

Beyond tariff law, customs regimes also require documentation, valuation and sometimes prior declarations for raw shipments: many jurisdictions treat large consignments of raw gold and doré as goods that require advance customs declarations and proof of origin to prevent illicit trade and tax evasion.

 

As Sunil Ambalavelil, Chairman of Kaden Boriss, notes: “Gold occupies a unique position in international trade law. While it is a commodity, it is also quasi-monetary in nature. That means the rules governing its movement are more sensitive, and enforcement tends to be stricter than for other metals.”

 

AML, DNFBPs and the Special Risks of Gold

Because gold is compact, high value and easily convertible, it is especially attractive to money-laundering and terrorist financing schemes. Global AML architecture therefore treats dealers in precious metals and stones as designated non-financial businesses and professions (DNFBPs) subject to customer due diligence, record-keeping, suspicious-transaction reporting and, where appropriate, enhanced due diligence. The Financial Action Task Force (FATF) has published detailed guidance and risk assessments highlighting how vulnerabilities arise at every step from artisanal mining through refining to retail.

 

Practical consequences for traders and refiners include KYC checks on sellers and buyers, limits on cash transactions, traceability measures for the provenance of material and regular reporting to authorities.

 

Ambalavelil emphasises the importance of strict oversight in this area: “Gold is one of the easiest mediums for laundering illicit wealth. That is why regulators worldwide -- and particularly in hubs like Dubai and Mumbai -- are tightening AML rules to ensure traceability and accountability at every stage of the supply chain.”

 

Responsible-sourcing Regimes and Supply-Chain Due Diligence

Alongside AML concerns, responsible-sourcing rules address human-rights, environmental and conflict financing risks associated with mining and refining. International best practice emphasises origin documentation, chain-of-custody standards and independent auditing -- concepts now written into national measures in major trading hubs.

 

These regimes aim to curb trafficking in conflict gold, environmental abuses in artisanal mining and trade in stolen or illegally exported metal.

 

“In the current compliance landscape, responsible sourcing is not just good ethics — it is a legal necessity,” says Ambalavelil. “Failure to document provenance can expose traders to sanctions, reputational harm, and even criminal liability.”

 

UAE: a Global Trading Hub Tightening the Rulebook

The United Arab Emirates -- and Dubai in particular -- is one of the world’s largest gold trading centres. UAE authorities have taken significant steps in recent years to channel that trade through regulated channels and to strengthen due-diligence standards for refiners, traders and free-zone operators.

 

At the policy level, the DMCC (Dubai Multi Commodities Centre) operates a prominent gold ecosystem and bullion programme that sets market standards for fineness, storage and trading in the free-zone. DMCC’s initiatives, including bullion coins and regulated trading platforms, seek to consolidate Dubai’s market while enhancing transparency.

 

More broadly, the UAE has introduced ministerial rules requiring responsible sourcing and due diligence for those involved in refining and recycling gold. Recent ministerial decree(s) impose specific obligations on refiners and other supply-chain participants, with notably severe administrative penalties for non-compliance -- penalties that industry sources report can reach from Dh50,000 up to Dh5,000,000 for serious breaches.

 

Ambalavelil observes: “The UAE’s reforms are a direct response to international scrutiny. By introducing strict sourcing rules and heavy penalties, Dubai is telling the world that it wants to remain a credible global gold hub.”

 

Operationally, UAE regulators now focus on registration of dealers, tighter vaulting and auditing, and closer supervision of free-zone activities -- all designed to preserve Dubai’s competitiveness while meeting global AML and responsible-sourcing expectations.

 

India: Cultural Demand, Duty Policy and Formalisation

India is the world’s largest consumer of gold for jewellery and investment, and its legal framework reflects both cultural demand and efforts to bring more of the chain into formal, taxable channels.

 

A notable policy development in recent years has been the sharp reduction in customs duties on gold imports -- a move intended to increase official imports, shrink smuggling and lower domestic premiums. In 2024 India reduced total customs duty on gold substantially, a policy that analysts credited with encouraging legal imports and reducing clandestine channels. Observers reported a marked rise in official imports and a significant fall in smuggling seizures following the duty cut.

 

India’s institutional framework also includes hallmarking standards enforced by the Bureau of Indian Standards (BIS) to assure gold quality, and customs rules that govern baggage allowances, non-resident Indian (NRI) concessions and quantitative limits. On the monetary policy side, the Reserve Bank of India has special powers and arrangements -- at times allowing the RBI to import gold under tailored conditions -- reflecting the metal’s macroeconomic significance.

 

On AML, India treats dealers and jewellers as reporting entities; enforcement challenges remain (as highlighted by international AML assessments), but recent legal and administrative reforms are focused on strengthening investigation and prosecution capacity.

 

Ambalavelil comments: “India’s decision to cut duties was pragmatic. It recognized that over-taxing gold only fuels smuggling. By formalising imports and tightening BIS standards, the government is ensuring both revenue collection and consumer protection.”

 

Practical Implications for Traders and Policymakers

1. 1. Compliance costs vs market access. Tight AML and sourcing rules raise compliance costs for small refiners and dealers, but they are increasingly necessary for access to reputable vaulting, banking and export markets.

2. 2. Customs and tariff policy matters. Duty changes alter official flow patterns rapidly: India’s duty cut shows how fiscal measures can shrink smuggling and shift market share back to formal channels.

3. 3. Traceability is central. Both the UAE’s recent decrees and FATF guidance converge on traceability: provenance documentation and audit trails are the new currency of trust in bullion markets.

 

“For traders and refiners, the era of opaque transactions is over,” Ambalavelil stresses. “Those who fail to comply with due diligence and AML requirements will find themselves shut out of legitimate financial systems.”

 

Conclusion

Rising gold prices inevitably sharpen incentives to exploit regulatory gaps -- but they also accelerate regulatory evolution. Internationally, the legal toolkit combines WTO trade disciplines, customs enforcement and FATF-driven AML obligations; on top of that, national regulators in major hubs such as the UAE and India have tailored rules to protect market integrity.

 

For participants -- from miners and refiners to retail jewellers and cross-border traders -- the message is clear: provenance, compliance and transparent documentation are now indispensable. Robust adherence to these norms protects firms from reputational, criminal and regulatory risk and preserves the liquidity and international credibility of the gold trade.

 

Ambalavelil concludes: “Gold will always be a symbol of security and wealth. But in today’s environment, only those who operate within a transparent and lawful framework can truly benefit from its shine.”

 

 

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