Dubai is one of the world’s leading centers for gold and precious metals trading. As a result, importing raw gold into Dubai can form part of a high-value international commercial transaction, particularly when the shipment is destined for a refinery or a company specializing in precious metals processing.

However, the value of the transaction is not the only concern. The contract governing the transaction determines who bears the risks associated with the shipment, how the origin of the gold is established, how weight and purity are determined, when the supplier becomes entitled to payment, who is responsible for delays or rejection of the shipment, and what happens if the supplier’s assay result differs from the refinery’s analysis.

For this reason, a contract for importing raw gold into Dubai should not be treated as an ordinary international sales agreement. It should address the commercial, technical, tax, customs, regulatory, anti-money laundering, and responsible-sourcing aspects of the transaction.

In this article, Legal Consultant Mohammed Jasem explains the key provisions that should be reviewed before signing a contract to import raw gold into Dubai and the principal risks that should be addressed from the outset.

What Is Raw Gold or Doré?

Raw gold, commonly referred to as gold Doré, is semi-refined gold containing gold together with other metals. It normally requires further refining and assaying to determine its final purity.

This is why the contract is particularly important. The final price may not depend solely on the weight of the bar. Instead, it may depend on the actual gold content established through assay and refining.

The contract should therefore specify from the beginning:

• Shipment weight.
• Expected purity.
• Associated metals.
• Sampling method.
• Laboratory or refinery responsible for the assay.
• Method for calculating recoverable gold.
• Final pricing mechanism.

What Types of Contracts Are Used When Importing Raw Gold into Dubai?

Before drafting the agreement, the parties should identify the actual commercial relationship because a gold sale agreement is different from a refining agreement.

1. Raw Gold Sale and Purchase Agreement

Under a sale agreement, the supplier undertakes to deliver the raw gold to the buyer in exchange for a purchase price determined according to the agreed pricing formula.

The price may be linked to:

Quantity of gold × actual gold content × agreed reference price

The parties may then deduct refining, transportation, or other agreed costs.

2. Toll Refining Agreement

In some transactions, the owner of the gold remains the actual owner while the refinery processes the gold in exchange for a refining fee.

In such circumstances, the contract should provide detailed provisions concerning:

• Ownership of the gold.
• Shipment weight upon receipt.
• Assay results.
• Recovery percentage.
• Acceptable loss percentage.
• Refining fees.
• Ownership of the refined output.
• Refining period.
• The refinery’s liability for unexplained shortages.

A standard sale agreement should therefore not be used for a transaction that is actually structured as a toll-refining arrangement.

What Are the Key Clauses in a Raw Gold Import Contract?

1. Details of the Parties and the Beneficial Owner

The contract should contain the complete legal details of each party rather than merely the commercial name.

The parties should verify:

• Legal company name.
• Registration number.
• Trade licence.
• Registered address.
• Country of incorporation.
• Authorized signatory.
• Ultimate beneficial owner.
• Bank account details.
• Relevant business licences.

These details should form part of the due diligence process before the transaction is executed.

2. Description of the Gold

One common mistake is to describe the subject matter simply as “raw gold” without providing sufficient technical details.

Depending on the transaction, the contract should specify:

• Type of gold.
• Number of bars.
• Gross weight.
• Net weight.
• Expected purity.
• Bar identification numbers.
• Country of origin.
• Source of the gold.
• Shipment number.
• Supporting documents.

It is advisable to attach a technical schedule describing the shipment and have both parties sign it as an integral part of the contract.

3. Proof of Gold Origin and Chain of Custody

The origin of the gold is one of the most important legal and compliance considerations in the transaction.

The raw gold import contract should therefore include representations from the supplier confirming that the gold:

• Was lawfully obtained.
• Does not constitute proceeds of crime.
• Is not connected to a sanctioned party.
• Was extracted, collected, or traded in accordance with applicable laws.
• Has a verifiable source and documented chain of custody.

The buyer or refinery should also have the contractual right to request documents relating to the source of the gold whenever necessary.

A general certificate from the supplier may not be sufficient. The supporting documents should be capable of being independently reviewed and verified.

4. When Does Ownership of the Gold Transfer?

The contract should clearly determine when ownership of the gold passes from the supplier to the buyer.

The parties may agree that ownership transfers:

• Upon delivery.
• After completion of the assay.
• After full payment.
• Or at another contractually agreed stage.

The agreement should also address:

• The consequences of non-payment.
• The seller’s right to suspend delivery.
• What happens to the gold if the shipment is rejected.
• The relationship between transfer of ownership and transfer of risk.

5. When Do the Risks of Loss or Damage Transfer?

Ownership and risk should not be confused.

For example, the seller may retain ownership of the gold until payment is completed while the risk associated with the shipment transfers to the buyer when the goods are delivered to the agreed carrier.

The contract should therefore expressly identify the point at which the risk transfers.

If the parties use Incoterms, the specific Incoterm, applicable version, and place of delivery should be clearly stated.

6. How Is the Weight of the Gold Determined?

The contract should establish how the shipment will be weighed instead of leaving this issue to be determined after arrival.

It is advisable to specify:

• Location of weighing.
• Weighing equipment.
• Calibration method.
• Whether representatives of both parties will be present.
• Permitted weight tolerance.
• Acceptable margin of error.
• Procedure for resolving weight discrepancies.
• The party or expert responsible for resolving a dispute.

The agreement should also distinguish between gross weight, net weight, and the weight attributable to the actual gold content.

7. Assay: How Is the Gold Purity Determined?

Assay is one of the most sensitive stages of a raw gold transaction because the assay result can directly affect the value of the shipment.

The contract should therefore establish a clear assay procedure covering:

• Sampling method.
• Number of samples.
• Sample storage.
• Approved laboratory.
• Testing method.
• Acceptable variance.
• Objection procedure.
• Independent laboratory in the event of a dispute.
• Whether the final assay result will be binding on both parties.

What Happens If the Supplier’s Assay Differs From the Refinery’s Assay?

The contract should preferably require multiple samples, including a sealed arbitration sample that will only be used if a dispute arises.

If the assay results differ, the sealed sample can be sent to an independent laboratory agreed upon in advance.

The contract should specify whether the independent laboratory’s result will be final and binding.

This provision is particularly important because the absence of an agreed dispute-assay mechanism can result in a dispute over the final value of the shipment itself.

8. How Is the Price of Raw Gold Determined?

For large international transactions, it is generally not advisable to use a vague clause such as “price according to market price.”

The contract should specify:

• Reference price.
• Source of the reference price.
• Pricing date.
• Pricing time where relevant.
• Currency.
• Applicable exchange rate.
• Discount or premium.
• Refining charges.
• Assay costs.
• Permitted loss percentage.
• Method of calculating the final output.

This makes the pricing formula objectively calculable and reviewable instead of leaving the parties to renegotiate the price after the shipment arrives.

9. Payment Terms

One of the most important aspects of the transaction is determining when and how the purchase price will be paid.

The contract should regulate:

• Advance payment, if applicable.
• Payment date.
• Currency.
• Bank account.
• Documents required for payment.
• Effect of the assay result on the final price.
• Guarantees.
• Letters of credit.
• Circumstances allowing payment to be suspended.

For high-value transactions, the parties may consider payment mechanisms that provide greater contractual and banking protection, depending on the structure of the transaction.

10. Secure Transportation and Insurance

Raw gold should not be treated as an ordinary commercial shipment.

The contract should identify:

• Security transportation company.
• Party responsible for contracting the carrier.
• Transportation costs.
• Collection point.
• Delivery point.
• Insurance value.
• Insurance beneficiary.
• Liability for loss of the shipment.
• Incident reporting procedures.
• Responsibility for delays.

The parties should also ensure that transportation, export, and import documentation complies with the applicable requirements in both the country of origin and the United Arab Emirates.

11. Documents the Supplier Must Provide

It is advisable to include a clear list of required documents before the transaction is executed.

Depending on the structure of the transaction, these may include:

• Commercial invoice.
• Certificate of origin.
• Export documentation.
• Gold-source documentation.
• Chain-of-custody documents.
• Assay certificate.
• Bar details.
• Packing list.
• Transportation documents.
• Insurance policy.
• Corporate documents.
• Beneficial ownership information.
• Tax documents.
• Required licences and permits.

The contract should also specify the consequences of failing to provide any material document.

12. Anti-Money Laundering Clause

Gold transactions require clear compliance provisions, particularly because precious metals transactions can present elevated money-laundering risks.

The contract should regulate the parties’ obligations concerning:

• Know Your Customer (KYC).
• Verification of the beneficial owner.
• Source of funds.
• Source of gold.
• Sanctions screening.
• Provision of supporting documents.
• Cooperation with compliance requests.
• Suspension of the transaction where a legal or regulatory obstacle exists.

The UAE regulatory framework applicable at the time of contracting should also be reviewed rather than relying on an outdated contract template that may no longer reflect current requirements.

13. Responsible Gold Sourcing

Compliance should not be limited to anti-money laundering requirements.

The buyer or refinery may also require information concerning the gold supply chain, its origin, and associated risks.

The contract may therefore require the supplier to provide information necessary for the other party to conduct responsible-sourcing due diligence.

The buyer or refinery may also be given the contractual right to:

• Request additional documents.
• Review the information provided.
• Suspend the transaction.
• Reject the shipment where its origin cannot be adequately established.

14. What Happens If the Bank Refuses to Process the Transfer?

This possibility should be addressed in the contract rather than treated as an unexpected event.

A bank may request additional documents or suspend a transfer as part of its compliance procedures.

The contract should therefore determine:

• Whether the buyer may suspend payment.
• Whether an alternative bank may be used.
• The maximum suspension period.
• When either party may terminate the contract.
• Who bears banking charges.
• What happens to the gold already held by the buyer or carrier.

15. VAT on Gold

One legal mistake is to insert a general statement in the contract such as:

“VAT on raw gold is 5%.”

The VAT treatment depends on the nature of the gold, the supply, and whether the applicable conditions for a particular VAT treatment are satisfied.

Qualifying investment precious metals, including gold meeting the applicable purity and trading requirements, may benefit from zero-rating, while other rules may apply to certain supplies and transactions between VAT-registered persons.

The contract should therefore specify:

• The party responsible for VAT.
• The agreed tax treatment.
• Required tax documents.
• Tax registration details.
• The reverse-charge mechanism where applicable.
• Each party’s responsibility for penalties or liabilities resulting from its own error.

16. Customs and Clearance

The contract should identify the party responsible for import procedures and customs clearance.

This includes:

• Official importer of record.
• Customs broker.
• Required documentation.
• Duties and fees.
• Expenses.
• Customs inspection.
• Delays.
• Refusal of clearance.
• Liability for incorrect declarations.

The existence of a reduced customs treatment or exemption for a particular commodity does not necessarily eliminate the applicable customs declaration and procedural requirements.

17. Force Majeure

The contract should include a force majeure clause addressing circumstances beyond the parties’ reasonable control, such as:

• War.
• Border closures.
• Government restrictions.
• Natural disasters.
• Airport closures.
• New sanctions.
• Restrictions on financial transfers.

However, the contract should also clarify whether the supplier’s failure to obtain a required licence or document qualifies as force majeure or constitutes a contractual breach.

18. Breach of Contract and Remedies

The consequences of a breach should be clearly defined rather than left to future litigation.

The contract may regulate situations involving:

• Delayed shipment.
• Weight shortages.
• Lower-than-agreed purity.
• Failure to provide documents.
• Compliance violations.
• Non-payment.
• Misrepresentation.
• Breach of gold-source requirements.

Depending on the agreement, the affected party may have the right to:

• Reject the shipment.
• Request replacement.
• Request a price reduction.
• Suspend performance.
• Terminate the agreement.
• Claim compensation.

19. Governing Law

Because importing raw gold into Dubai will often involve an international transaction, the contract should clearly identify the law governing the agreement.

General wording such as:

“This agreement shall be governed by applicable laws.”

should be avoided.

Instead, the contract should clearly identify the chosen governing law and explain its application to the contractual relationship.

20. Arbitration and Dispute Resolution

The parties may agree to commercial arbitration for resolving disputes, particularly in international contracts.

The arbitration clause should be carefully drafted and may specify:

• Seat of arbitration.
• Arbitration rules.
• Number of arbitrators.
• Method of appointment.
• Language of arbitration.
• Governing law.
• Scope of disputes covered by the arbitration agreement.

The parties may also agree to a negotiation or mediation stage before arbitration, provided that the contract specifies a clear time period for that process.

What Are the Most Common Mistakes in Raw Gold Import Contracts?

Some seemingly minor mistakes can result in significant financial losses.

Common examples include:

1. Paying the full value of the gold before verification.
2. Failing to verify the supplier and beneficial owner.
3. Failing to establish the source of the gold.
4. Failing to define the sampling procedure.
5. Failing to retain an arbitration sample.
6. Failing to identify an independent laboratory.
7. Confusing transfer of ownership with transfer of risk.
8. Failing to establish a clear pricing formula.
9. Ignoring tax implications.
10. Failing to address a bank’s refusal to process the transfer.
11. Failing to allocate transportation and insurance responsibilities.
12. Using an unclear arbitration clause.

Raw Gold Import Contract Checklist for Dubai

Before signing the agreement, ask the following questions.

About the Supplier

• Is the company properly established and licensed?
• Who is the beneficial owner?
• Have sanctions checks been completed?
• Is the source of the gold clear?

About the Gold

• What is the weight?
• What is the purity?
• What is the country of origin?
• What supporting documents are available?

About the Assay

• Who will conduct the assay?
• What sampling method will be used?
• Is there an arbitration sample?
• Who will resolve discrepancies?

About the Price

• What is the reference price?
• When will pricing take place?
• What discounts apply?
• What are the refining charges?

About Payment

• When is the purchase price due?
• Is a guarantee required?
• Is a letter of credit being used?
• What happens if the bank refuses the transfer?

About Shipping

• Who bears the risks?
• Who is responsible for insurance?
• Who contracts with the security carrier?
• Where will delivery take place?

About Compliance

• Has KYC been completed?
• Has the source of the gold been verified?
• Are chain-of-custody documents available?
• Is the transaction consistent with applicable banking and regulatory requirements?

About Disputes

• What is the governing law?
• Will disputes be resolved by a court or arbitration?
• What is the seat of arbitration?
• What language will be used in the proceedings?

Do You Need a Lawyer to Review a Raw Gold Import Contract?

Raw gold contracts differ significantly from ordinary commercial sales agreements because they combine commercial, technical, tax, customs, anti-money laundering, responsible-sourcing, and international dispute-resolution considerations.

For this reason, reviewing the agreement before transferring funds or shipping the gold can help identify risks relating to pricing, ownership, assay procedures, payment, source of gold, and regulatory compliance.

Legal Consultant Mohammed Jasem provides legal services to companies and investors in the UAE, including the review and drafting of international commercial contracts, assessment of contractual risks, and drafting of payment, security, and dispute-resolution provisions appropriate to the structure of the transaction.

Conclusion

The success of an agreement for importing raw gold into Dubai does not depend solely on the shipment reaching the UAE. It also depends on having a clear and comprehensive contract governing every stage before and after the gold arrives.

The agreement should expressly address the source of the gold, ownership, weight, assay, pricing, payment, transportation, insurance, customs, taxation, anti-money laundering requirements, responsible sourcing, governing law, and dispute resolution.

The larger and more complex the transaction, the more important precise contractual drafting becomes. Resolving a dispute after the shipment arrives may be considerably more costly and difficult than addressing the relevant risks when the contract is drafted.

If you are preparing to sign an agreement for importing raw gold into Dubai, having the contract legally and regulatorily reviewed before committing to the transaction can help clarify the obligations, risks, and rights of each party.

Frequently Asked Questions

What Should a Raw Gold Import Contract in Dubai Include?

The contract should identify the parties, describe the gold, specify its weight and purity, establish its source, define the assay procedure, pricing, payment terms, transfer of ownership and risk, shipping and insurance arrangements, taxation, compliance requirements, governing law, and dispute-resolution mechanism.

How Is the Price of Raw Gold Determined?

The price is generally calculated according to a formula linked to the actual quantity of gold, assay results, and an agreed reference price, together with applicable discounts, costs, refining charges, and any permitted loss percentage.

What Happens If the Gold Assay Results Differ?

The parties should follow the assay dispute mechanism established in the contract. A sealed arbitration sample and independent laboratory analysis can be used where the parties have agreed to such a procedure in advance.

Must the Source of Gold Be Verified Before Importing It?

The source of the gold and relevant chain-of-custody documents should be verified according to the nature of the transaction and applicable regulatory requirements, particularly where the parties are subject to due-diligence and responsible-sourcing obligations.

Is Raw Gold Subject to VAT in the UAE?

The VAT treatment depends on the nature of the gold, the transaction, and whether the applicable conditions for a particular VAT treatment are satisfied. The applicable tax treatment should therefore be reviewed before inserting a VAT clause into the contract.

Can the Parties Agree to Arbitration in a Raw Gold Import Contract?

Yes. The parties may agree to arbitration, but the arbitration clause should clearly identify the seat, rules, procedures, language, and governing law, as applicable to the transaction.

How Can a Foreign Supplier Protect Its Right to Payment?

Payment protection may be structured through payment terms, guarantees, letters of credit, and by linking certain payment stages to specified documents, assay results, and contractual obligations.

Legal Consultant Mohammed Jasem – Legal Support for Gold Import Transactions

Legal Consultant Mohammed Jasem assists companies and investors in the UAE with commercial contracts and complex transactions, including international supply agreements, contractual risk assessment, payment and security arrangements, compliance provisions, and dispute-resolution clauses.

For high-value gold transactions, legal review before signing the agreement can help ensure that the commercial arrangement is properly reflected in the contract and that key risks are addressed before funds or goods are transferred.

Legal Disclaimer

This article is provided for general legal information and does not constitute legal advice regarding any specific transaction, contract, company, or set of circumstances. UAE laws, regulations, and regulatory decisions may change, and the applicable legal and tax requirements should be reviewed based on the current legislation and the specific facts and documents of each transaction.