Licensing precious metals and gemstones and avoiding penalties

Licensing precious metals and gemstones and avoiding penalties

Commercial products traded in the Saudi market, particularly with government facilities provided to traders to meet increasing customer demand.

Among the most important products in high demand are gold and jewelry, which are distinguished by their precious value and are a safe type of investment. Therefore, the procedures for licensing their sale and manufacture are regulated by the Precious Metals and Precious Stones System, which is supervised by the Ministry of Commerce to prevent fraud and manipulation by merchants and workers in this field.

What are precious metals in Saudi Arabia?

The executive regulations of the Precious Metals and Precious Stones System stipulate that precious metals are defined as including gold, silver, and platinum, and are either in the form of artifacts used for decoration or in the form of currencies withdrawn from circulation.

Gemstones include diamonds, rubies, sapphires, emeralds and natural pearls.

Is selling gemstones prohibited?

Is selling gemstones prohibited?

The sale of precious stones is prohibited unless they meet the following conditions in accordance with Article 11 of the Precious Metals and Precious Stones Law:

• Obtaining a valid license from the Ministry of Commerce.
• The presence of an identification card for the gemstone indicating the weight.
• A written decision must be attached, stating the following information:
  • Name of the stone, its class, type and quality level.
  • The purity of the stone, its properties, and its safety from fractures and scratches.
  • Mention defects and identify them if any.

The system also prohibits the sale of the following items:

• Precious metal artifacts that are not stamped according to the calibers specified in the executive regulations of the system.
• Semi-precious and artificial stones unless accompanied by a card showing the stone’s information.
• Counterfeit coins and commemorative gold, silver or platinum medals.
• Precious metal and gemstone artifacts with coin and medal shapes mounted on them.
• Imitation stones.

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What are the merchant’s obligations under the Ministry of Commerce’s Precious Metals and Gemstones System?

Trader Obligations in the Precious Metals and Gemstones System Ministry of Commerce

A merchant who engages in the manufacture and sale of precious metals and gemstones must adhere to the following controls:

• Maintain a precious metals license and the store’s commercial register.
• Register a distinctive trademark for him in which he stamps all products he has manufactured or imported.
• The sources of all minerals and precious stones must be proven when requested from the competent authorities.
• Keeping records showing the sources and artifacts of all his precious metals and gemstones for ten years.

How do I get a precious metals and gemstones license?

A merchant or jewelry store owner can obtain a license to manufacture and sell precious metals and gemstones through the Ministry of Commerce website by following these steps:

• Log in to the Gemstones and Precious Metals Licensing Service on the Ministry of Commerce website via the National Unified Access Account.
• Select “Request a new license” from the Actions icon.
• Fill in the applicant’s personal data and the facility’s data.
• Click “Submit Application” to be reviewed by the Ministry of Commerce.
• Print the license after approval.

What are the penalties for violating the provisions of the Ministry of Commerce’s Precious Metals and Gemstones Law?

Anyone who commits the following acts shall be punished by imprisonment for a period not exceeding two years and a fine not exceeding 400,000 Saudi riyals, or by one of these two penalties:

• Fraud or deception in the type, weight or caliber of precious metals and gemstones.
  • Amending precious metals or their artifacts after stamping them, making them not conform to the caliber and specifications specified by the executive regulations of the system.
  • Selling, displaying, or possessing for the purpose of sale precious metal alloys or their unstained artifacts.
  • Anyone who practices the profession of manufacturing precious metals and gemstones without a license shall be punished with imprisonment for a period not exceeding 6 months and a fine not exceeding 90 thousand Saudi riyals, or with one of the two penalties.
• Suspension of the license and closure of the store for a period not exceeding three years.

You can contact a specialized lawyer from the office of Lawyer Abdul Majeed Al Rashid who will help you resolve commercial issues, prepare legal memoranda, review your contracts, and complete all precious metals and gemstone licensing requirements easily and quickly.