Gold Purchasing Procedures

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CONSEC Commodities (trading as CONSEC Commodity Trading DMCC) is a company registered with the Government of the U.A.E. and has a license for Pearls & Precious Stones Trading and Non-Manufactured Precious Metal Trading (such as gold). This means that we have gone through all due diligence and compliance procedures with the relevant Authorities.

The company has bank accounts with the major banks in the U.A.E. for which we have again gone through detailed due diligence and compliance procedures for money laundering by the bank’s Legal and Compliance Departments, as well as the U.A.E. Central Bank.

We have also gone through the due diligence and compliance process with several specialized transport companies, as well as the Dubai Government Authority in the form of Dubai Multi Commodities Centre (DMCC).

We are a company that will always protect our standing and reputation by ensuring all deals we are involved with are fully compliant with all applicable laws.

Every prospective Seller to CONSEC also has to undergo full due diligence and compliance procedures undertaken by our Legal Department in order to satisfy our Precious Metals Trading License requirements from the UAE Government, our banks, local authorities in the Seller’s exporting country, police, Interpol, United Nations, Scammers List, export country embassies Black Lists, security, transport and customs clearance companies, and DMCC, in order to be able to do business with CONSEC Commodities. We are not interested in doing any business with scammers, criminals, terrorists, or any other illegal entity.

Banks will be unable to process a transaction that involves a breach of sanctions, and authorities may require the disclosure of information. The bank is not liable if the Seller, or any other person, fails or delays to disclose information resulting in an actual or apparent breach of such sanctions.

Shipments to, from or through Iran, Cuba, North Korea, Sudan, and Syria are prohibited, as well as any party which is sanctioned by the United Nations, European Union, United States, United Kingdom, or the United Arab Emirates. No party in any of those countries (which includes any aircraft or vessel flagged in or owned or operated by a party in such country) is to be involved in the transaction in any manner. The banks may not complete a transaction which involves such a party.

TRUST

Trust nobody. Over our many years of experience, we have had cases where not only Sellers or Brokers were attempting a scam, but also customs officials, major security and transport companies, airlines, police officials, lawyers, refineries, and bankers were part of the scam sharing the profits from their victims.

ASSAY

While not necessarily a scam, many countries use the Water Density Method to provide a formal assay of gold bar melted at the mine in which the gold was mined. However, gold as an alloy will always contain other metals which can offset the whole density of the material being tested, based on the mass and density of the other material(s). Therefore, CONSEC will never accept an assay based on the Water Density Method or an XRF Analyzer (X-Ray Fluorescence, which measures the purity only on the surface of a bar) as the final assay result for payment. The only accepted assay for payment would be a Fire or Chemical Assay (where drillings from multiple points of a bar are melted and chemically tested for gold purity) done by our nominated and licensed assayer in the U.A.E.

INTERMEDIARIES/BROKERS

A fraudster will pretend to be acting as an Intermediary or Agent Mandate for some important person, for whom discretion, confidentiality, and anonymity are essential, or for Mines or Traders of gold. The story concocted may be that a Foreign Embassy Official or member of the aristocracy needs to sell one or more gold bars. The Intermediary may ask the Buyer for a cheque to reassure the principal, on the understanding that the cheque is not going to be cashed. The con man then attempts to clear the check by special clearance. Some small-time crooks may settle for a small advance payment or loan towards their expenses.

To create an image of respectability, some fraudsters will instruct a solicitor/lawyer, accountant or other professional to communicate with the intended victim. The professional may be an innocent party but may also be in on a conspiracy to defraud. 

CONSEC will not pay any fees or sign any NCNDA (Non-Competing Non-Disclosure Agreement) with any Intermediary/Broker for a referral to a Seller. We highly recommend that you secure any commission for your services with an Intermediary Master Fee Protection Agreement executed between you and the Seller, as you are entitled to payment for your valuable services to the Seller.

IMPORT DUTIES & CUSTOMS FEES

We will only buy gold CIF Dubai. We will not pay any fees in advance, and if the Seller requires funding to pay for the export duties, freight, insurance, documentation, etc., then our advice to the Seller is to sell a few kilos of gold locally to get the necessary cash flow for the above and be able to export the gold CIF Dubai..

We will only buy Doré bars on a CIF Dubai basis, if all required legal documentation, together with the Certificate of Origin and proof of taxes paid are submitted for clearance.

When the gold has arrived in the U.A.E., CONSEC Commodities can then import the Gold using either our Customs Clearance and Import License for Precious Metals or via one of the nominated and licensed Customs Clearance Brokers.

After the gold has been cleared through customs, an internationally recognized and licensed security transport company with bonded warehouse facilities will transport the gold to our nominated refinery for additional smelting if needed, and Final Assay.

When the assay is done by the licensed assayer and the results are accepted by the Seller, then the Seller and the Buyer will formally sign the Final Commercial Invoice as per the terms of our Sales & Purchase Agreement (SPA).

When the gold arrives in the UAE, we always expect and want the Seller or his nominated representative to accompany the gold through all stages of customs clearance, weighing, assaying (and if found to be non-homogeneous then re-smelting, re-assaying and weighing again) and the gold will only change ownership when the Final Commercial Invoice is issued after the Final Assay and signed by both the Seller and Buyer (or their representative as stated in the SPA), and in the presence of one of the Buyer’s bank officers in the U.A.E. We will then transfer the agreed funds within 3 banking days and always according to all the terms and conditions in the SPA.

1. Seller (Miner or Owner) fills in and sends to Buyer a Seller Corporate Offer (SCO).
2. Buyer reviews the SCO, makes comments, if any, and if both Buyer and Seller agree on principle, then the Seller fills in and sends to Buyer the Client Information Sheet (CIS).
3. Buyer reviews the CIS for due diligence and compliance check.
4. If everything is in order, the Buyer sends the Sales & Purchase Agreement (SPA) for review and approval.
5. Buyer sends sample verbiage of the Proof of Funds (PoF) that must be issued by the Buyer’s Bank.
6. Seller and his bank approve the sample verbiage of the PoF, and both parties sign the SPA.
7. Seller, after paying all export document processing, taxes, duties, freight, insurance costs, and any other expenses imposed on or required up to the delivery of the gold bars to the Nominated International Airport, notifies the Buyer three days before the date of transport with all the details of the shipment. Failure to do so would result in delays in Customs Clearance, smelting, weighing, and assaying, and the Buyer shall be held harmless and blameless.
8. Seller ships the commodity to the Buyer’s Nominated Airport in the name of the Buyer and Consignee. See the next section for the required Delivery Documents.
9. Buyer will clear the gold bars through Customs and organise transport to the Nominated Refinery where the smelting/refining, weighing, and Final Assay will take place. Buyer pays for Customs Clearance, Security Transport, Storage, Smelting/Refining, and Assay costs in Dubai, U.A.E., and deducts these expenses from the final price.
10. If, after assay, the gold is found non-homogenous, it will be smelted. Note that this takes additional business days before being able to do the Final Assay. All associated costs incurred for the transfer of the Gold Bars to the smelting facility, their smelting and their return to the Bonded Warehouse shall be borne and paid by the Buyer on behalf of the Seller and shall be deducted from the Final Commercial Invoice Price.
11. After smelting, weighing, and assaying, the gold will be placed in sealed boxes. From that point on, the Seller will not be able to touch the gold anymore. In case the seal has been tampered with, the smelting and weighing process will have to be repeated. The smelting and weighing can be done in the presence of the Seller or a representative, if required.
12. On receipt of the Final Assay results, the Seller will issue the Final Commercial Invoice (accounting for any additional expenses made by the Seller as per points 9 and 10). The Invoice must be signed by the Seller and the Buyer (or their authorized representatives) in the presence of one of the Buyer’s Bank Officers certifying the amount on the invoice. The ownership of the gold automatically transfers to the Buyer.
13. Payment will be sent by SWIFT within three banking days.

Each shipment and delivery shall be identified with all appropriate contract numbers. If available, copies of the documents shall be sent for customs preclearance.

MANDATORY DOCUMENTS FOR CUSTOMS CLEARANCE

Original documents to be provided with shipment at the port of destination:

1. Three (3) original Proforma Commercial Invoices in favour of the Buyer with Consignee, the Buyer’s nominated Customs Clearance and Security Transport and Storage Company, based on the weight and purity of the Gold Bars ascertained by the Preliminary Assay Report, minus the discount offered and based on the second fixing of the previous day’s price LBMA (for customs purposes only).
2. Certificate of Origin and Certificate of Circulation of Merchandise.
3. Original Bill of Lading / Bill of Entry (BOE) / Customs Declaration Form with no marking of any kind.
4. Air Waybill marked “Air Freight Pre-Paid”, Gross Weight, Net Weight, and the shipment description as “Believed to contain gold” cargo with the Harmonized Custom Code for Raw Gold Ingot Form 71081210.

ADDITIONAL DOCUMENTS REQUIRED

The following documents are required for the due diligence and compliance process. They are required by the refinery, bank, customs, and other governmental authorities. To avoid any delays, the Seller is strongly advised to submit these on time:

1. Inventory of goods - packing list with gross and net weight of the gold content, net weight of each gold bar, number of gold bars per box, serial numbers of packing boxes.
2. Insurance Certificate.
3. Export license.
4. Certificate of Ownership stating that Seller is the lawful owner of the goods.
5. Export Permit.
6. Preliminary Assay Report.
7. Customs Certificate and Tax Receipt of the country of origin.
8. Title of Exportation and declaration by Seller stating that payment of all duties, charges, and taxes to the relevant authorities at origin have been completed, and that the gold bars are of non-criminal origin, unencumbered and free of any liens, transferable and exportable.
9. Shipping Approval Certificate.
10. Any other documentation requested by the customs authorities or refinery in the import country. This may include providing full details of the mine that the gold was produced from.
11. Further required documentation dependent on any additional requirements from either exporting- or importing country.
12. Confirmation that the gold contains no Deleterious Elements:

DELETERIOUS ELEMENTS

The Seller shall advise Buyer in advance prior to shipment if the gold contains any of the following deleterious elements:

More than:

2.0% Iron

10.0% Copper

5.0% Zinc

2.5% Lead

2.0% Nickel

0.5% Bismuth

0.5% Cadmium

0.5% Antimony

0.2% Mercury

0.2% Arsenic

0.2% Beryllium

0.2% Selenium

0.2% Tin

0.2% Tellurium

Should the gold delivered to Buyer contain excess levels of these elements, additional charges due to the impurity content of the gold will be deducted from the amount payable to the Seller. Buyer has the right to refuse acceptance of the gold.

In the following the most common impurities in refining material are specified and limits are formulated below which the material is acceptable without additional amounts being charged to the Supplier.

These limits are to be considered as indications by Buyer and must be re-evaluated depending on the material and the process of refining it is destined for.

Class I (Impurities, which are hazardous to personal and environment)

Element Acceptable levels

Radioactive None

Mercury [Hg] None

Arsenic [As] Max. 100 ppm

Cadmium Max. 100 ppm

Class II (Impurities, which can disturb the refining process and as well influence the environmental protection processes)

Element Acceptable levels

Lead [Pb] Max. 2.5%

Tin [Sn] Max. 3%

Selenium [Se] Max. 500 ppm

Tellurium [Te] Max. 500 ppm

Bismuth [Bi] Max. 100 ppm

Antimony [Sb] Max. 100 ppm

There are other elements which may be present in refining material that do not have hazardous properties or disturb the processing significantly if present in minor quantities but may severely disturb the homogenization and sampling since they produce a heavy segregation when the Gold solidifies. These elements are Iron (Fe), Nickel (Ni) and Cobalt (Co). This list is not representative for all material compositions and subject to adjustment if required.

In case the gold supplied by the Seller contain impurities that are deleterious to other persons or to the refining process, the Buyer shall have the right to either:

Reject the Shipment; and all expenses incurred by the Buyer in connection with the rejected Shipment being for the account of the Seller, or

Ask for additional payments from the Seller to cover any additional cost that the Buyer incurs due to handling the deleterious elements.