Saudi Arabia’s jewellery and precious metals business is regulated by tight laws and regulations. These impose fair trade practices, safeguard consumers, and maintain high-quality standards. As a business owner in this field, you must understand these rules in order to ensure compliance and long-term success.
The Foundation of Precious Metals and Gemstones Legislation
The Law of Precious Metals and Gemstones was introduced on 24th April 1983, replacing the Goldsmiths’ Law of 1941. This updated legal framework comprises 22 articles that govern the trading, inspection, and hallmarking of precious metals and gemstones. The initial executive regulations were issued in 1985 and underwent a major revision in 2018 to address the growing and changing needs of the industry.
Key Responsibilities of the Ministry of Commerce
The Ministry of Commerce is the authority responsible for enforcing this law and regulating the jewellery and precious metals industry. Its primary duties include:
- Inspecting, analysing, and hallmarking precious metal products, including those plated, coated, or inlaid with precious metals.
- Establishing legal standards for metal purity and defining the Kingdom’s official hallmark.
- Monitoring gemstones and identifying which types fall under the scope of the law.
- Issuing licences for the production and sale of precious metals and gemstones.
- Determining fees for inspection, hallmarking, and the issuance of certificates.
Requirements for Selling Precious Metals and Gemstones
To operate in this industry, businesses must adhere to specific legal requirements:
- All items must carry an official hallmark that verifies their purity as determined by the Ministry of Commerce. Products that are plated or inlaid must also include a mark indicating the percentage of pure metal.
- Each gemstone must be sold with a written statement detailing its type, weight, colour, quality, and any imperfections.
- Imported jewellery and gemstones must be inspected, analysed, and hallmarked by the Ministry before being placed on the market.
Licensing and Compliance
Operating in the jewellery and precious metals sector without a valid licence is strictly prohibited. Businesses that fail to comply with these regulations face significant penalties.
Penalties for Violations
The law imposes harsh penalties to ensure compliance, including:
- Up to two years of imprisonment or fines of up to SAR 400,000 for fraud or tampering with hallmarked items.
- Suspension of licences or permanent closure of businesses for repeat offenders.
- Additional fines of up to SAR 200,000 for other violations.
- Publication of violations in local media at the violator’s expense, depending on the seriousness of the offence.
Abiding by the Law of Precious Metals and Gemstones is not solely about avoiding penalties. It is also essential for earning your customers’ trust and maintaining a strong reputation in the market. Adopting compliance as an integral part of your operations ensures long-term success in a competitive industry.
The Role of SUNFACET ERP in Simplifying Compliance for Your Business
Managing legal requirements can be complex, but our ERP system, SUNFACET, is designed to ease this burden. SUNFACET offers tools that help your business remain fully compliant by:Tracking and documenting the purity and hallmarking of your jewellery.Maintaining detailed records for gemstones, including their quality and any defects.Automating compliance with legal standards.Generating accurate invoices and certificates that meet regulatory requirements.Monitoring inventory and supply chain operations effortlessly.
Understanding and complying with these regulations not only protects your business but also builds a trustworthy brand. SUNFACET, our ERP solution, is your reliable partner in simplifying compliance.
Take the next step towards compliance and growth. Contact us today to learn more about how SUNFACET ERP
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