Dubai has long been a global leader in the diamond trade. After hosting the 2024 plenary, the UAE will assume the role of Custodian Chair of the Kimberley Process (KP) and is poised to play an even greater role in shaping the future of ethical diamond trading.

The United Arab Emirates (UAE) has begun its crucial role as chairman of the Kimberley Process (KP), a significant UN effort to keep conflict diamonds out of the world’s rough diamond market. This is the second time the UAE has served as the KP’s chairman; the first was in 2016.

Key focuses during the UAE’s chairmanship include operationalizing the permanent secretariat in Botswana, a proposal initially put forth by the UAE in 2016. Additionally, the KP aims to complete its review and reform cycle, an initiative led by Angola. 

A significant aspect of the UAE’s agenda is modernizing the KP’s operational framework, including the transition from paper-based to blockchain-based KP certificates. This move is intended to enhance security and prevent forgeries, solidifying the KP’s role in the future of the diamond trade.

Additionally, a new UN resolution (A/79/L.63) that expands the definition of conflict diamonds to include environmental damage, labor abuse, and all types of violence is one of the significant changes to the regulatory environment in 2025.

In this article, we will cover key things to start a diamond trading business in the UAE. Continue reading further to learn more. 

Key Regulatory Changes You Must Know

Significant changes have been made to the rules governing the Kimberley Process (KP), an international certification program designed to keep conflict diamonds out of the world market. 

These modifications strengthen compliance standards, broaden the definition of conflict diamonds, and impose increased penalties for noncompliance.

1. Conflict Diamond Definition

Conflict diamonds are “rough diamonds used to finance wars against governments,” according to the KP. This does not include other types of violence or violations of human rights that are connected to diamond mining, like forced labor, child labor, rape, torture, environmental damage, corruption, and tax evasion.

Moreover, the Kimberley Process does not cover the trade in polished diamonds; it only covers rough ones. This means that conflict diamonds can be “cleaned” by simply taking them to a polishing factory.

2. Enhanced Compliance Requirements

New compliance measures have been implemented in an effort to increase accountability and transparency:

• Annual Reporting: Participants are required to provide the KP Secretariat with comprehensive reports detailing the steps they have taken to keep conflict diamonds out of the supply chain.
• Blockchain Traceability: By improving the traceability of diamonds from the mine to the market, blockchain technology will lower the possibility of illegal trade.
• Corporate Social Responsibility (CSR) for Small-Scale Miners: CSR regulations, which guarantee fair labor practices and environmental responsibility, are now mandatory for small-scale miners in order to promote ethical mining operations.

3. Penalties

Trading raw diamonds without adherence to KP regulations could result in legal consequences, restricted access to markets, and damage to the company’s reputation. 

Companies must consider KP compliance as a component of risk management in order to reduce their exposure to the financial and reputational risks related to conflict diamonds.

UAE-Specific Updates

Dubai Customs’ modern processes and services have lately received praise from the World Customs Organization, or WCO.

During his recent visit to Dubai Customs, WCO Deputy Secretary-General Ricardo Treviño Chapa said the department has a significant impact on the growth of customs activity worldwide.

According to him, other customs organizations worldwide should take inspiration from Dubai Customs’ approach and work methods.

Dubai Customs demonstrated considerable changes in its smart risk engine, which boosts predictive powers by 80 percent. By integrating modules in risk prediction, fraud detection, valuation price assessment, HS CODE Classification, and exception automation, the AI Predictive Risk Engine leverages machine learning algorithms in customs vertical systems to increase the amount of time Dubai Customs spends executing valid declarations.

Dubai Customs created a number of tools and programs that made work easier and reduced the amount of time customers needed to clear their shipments. These consist of the Smart Workspace Platform, Smart Risk Engine, and Mirsal.

The Dubai Multi Commodities Centre (DMCC) has shown a dedication to corporate social responsibility regarding free zone companies’ ethical sourcing requirements.  

The largest business sustainability program in the world, the United Nations Global Compact, welcomed DMCC as its first Free Zone in August 2017. The goal of this collaboration is to promote ethical business practices across the 14,100-company DMCC Free Zone and related industries, such as diamonds and precious metals.

Step-by-Step Diamond Business Setup (2025 Edition)

A well-planned strategy is necessary when starting a business in the United Arab Emirates to maximize operational effectiveness, guarantee regulatory compliance, and set up your company for long-term success. 

This guide describes the key stages of business setup in 2025, with an emphasis on the choice of Free Zone, license, and operating requirements.

Phase 1: Pre-Launch

Choose a Free Zone  (DMCC vs. DAFZA)

When setting up your business in Dubai, choosing the appropriate free zone is essential. The Dubai Multi Commodities Centre (DMCC) offers specialized infrastructure for commodity traders, particularly diamond companies. 

As an alternative, the Dubai Airport Free Zone (DAFZA) offers convenient access to international markets because of its advantageous location and logistical support.

Businesses should work with knowledgeable consultants like JSB Incorporation to guarantee smooth compliance with the Kimberley Process (KP) rules. These experts help with risk assessments, regulatory framework navigation, and compliance paperwork.

Phase 2: Licensing & Compliance

Entrepreneurs are required to submit an in-depth sourcing strategy that complies with KP regulations. This guarantees ethical sourcing methods and transparency, which are essential for securing license approvals in the United Arab Emirates.

Companies should work with recognized mines that adhere to the World Diamond Council’s (WDC) Due Diligence Toolkit in order to maintain ethical standards. This partnership makes the diamond trade appear more trustworthy and makes transactions easier.

Phase 3: Operations

Using blockchain technology guarantees real-time tracking and verification of diamonds from mine to market, in compliance with DMCC’s 2025 requirements. This reduces risks associated with conflict diamonds and increases trust.

By November 30 of each year, businesses are required to submit their yearly KP compliance reports to the UAE Ministry of Economy. On-time submission improves the company’s regulatory position and avoids fines.

Opportunities in Dubai’s Diamond Market

Golden Visa Incentives: The UAE Golden Visa offers a streamlined residency pathway for ethical traders, granting them long-term stability and exclusive business advantages.

This initiative is designed to attract entrepreneurs who uphold transparency and integrity in their trade, rewarding them with a 10-year residency, 100% business ownership, and tax benefits in a thriving economic environment. 

Ethical traders also gain the flexibility of multiple entries, the ability to sponsor family members, and access to a dynamic global marketplace. By prioritizing responsible business practices, the UAE reinforces its commitment to fostering a fair and prosperous trading ecosystem.

Ethical Branding: Long-term brand loyalty and consumer trust are greatly enhanced by ethical branding. Displaying a “Conflict-Free” certification in the diamond sector not only increases credibility but also draws in international buyers who value ethical sourcing. 

This dedication to ethical behavior makes Dubai’s diamond companies more marketable and establishes them as leaders in sustainability and transparency. Businesses may attract ethically conscious customers who appreciate honesty and integrity in their purchases by making sure that their supply chains comply with ethical standards.

Key Statistics and Trends on Diamond Business in the UAE 2025

• Diamond Trade Value:

The UAE’s diamond trade reached $40 billion in 2024, marking a significant milestone and creating its position as the third-largest diamond trading hub globally, after India and the United States. (source)

By mid-2024, the trade volumes for rough and polished diamonds rose 12% year-on-year, reaching nearly 120 million carats.

• Market Share:

The UAE accounts for over 15% of the global diamond trade, highlighting its pivotal role in international markets.

• Segment Growth:

The polished diamond segment saw a 32% year-on-year growth in 2023, contributing $16.9 billion to Dubai’s total diamond trade value of $38.3 billion.

The rough diamond trade remained robust, totaling $21.3 billion in 2023 despite a global price drop of approximately 20%.

• Lab-Grown Diamonds:

The UAE’s lab-grown diamond market grew by 10% year-on-year, reaching a value of $1.6 billion in 2023, reflecting increasing demand for ethical and sustainable gemstones.

• Future Projections:

The UAE diamond market is expected to grow at a CAGR of 6.84% through 2031, driven by demand for high-quality gemstones and ethical sourcing trends. (report)

Common Mistakes to Avoid

• Ignoring artisanal miner partnerships: KP 2025 requires collaboration with small-scale and artisanal miners. Penalties for non-compliance and limited market access may follow failure to interact with these miners.
• Missing Deadlines for Annual Compliance Reports: Participants in the KP are required to submit annual reports detailing their implementation of the Kimberley Process Certification Scheme (KPCS). Delays may result in penalties, harm to one’s reputation, and even expulsion from the Kimberley Process certification program.

Risk Mitigation Checklist

• Pre-Audits: To find possible problems early on and fix them, conduct routine compliance audits.
• CSR Frameworks: To increase the legitimacy of ethical sourcing, implement corporate social responsibility (CSR) programs into action.
• WCO Collaboration: Collaborate with the World Customs Organization (WCO) to facilitate easier compliance with international trade regulations.

Future Trends & Action Steps

Lab-grown diamonds under KP scrutiny: The lab-grown diamond jewelry sector is on hold after seeing tremendous growth and sales that approached USD 9 billion in 2024. Future obstacles include market saturation, competition, declining pricing, sustainability issues, more stringent restrictions, and a decline in perceived value.  

Nonetheless, there are potential customers through omnichannel tactics, product diversity, and global development. Jewelry brands must have strong branding and positioning in order to overcome these obstacles and drive future expansion.

UAE-led KP reforms are boosting Dubai’s trade volume: A “Year of Best Practice” has been committed by the UAE, which has agreed to chair the Kimberley Process as a custodian in 2025. 

This year will focus on strengthening compliance mechanisms, improving processes, and making sure the KP continues to be a model of cooperation and efficacy in securing the long-term future of the global diamond industry.

Next Steps for Entrepreneurs

Attend DMCC Workshops: The Dubai Multi Commodities Centre (DMCC) offers industry-specific workshops on diamond trading, compliance, and market trends. These sessions provide insights into

• The Ethical Sourcing and the Kimberley Process (KP)
•  Possibilities for the diamond trade in Dubai
• Operational and legal prerequisites for starting a diamond trading company

Use JSB’s KP Compliance Packages: To guarantee that your diamond trading company complies with global ethical standards, JSB offers customized Kimberley Process (KP) compliance packages. Their services may include:

• Documentation & Certification to verify conflict-free diamonds
• Regulatory Guidance for hassle-free trade
• Custom Compliance Solutions tailored to your business

Conclusion: Turn Compliance into Profit

Ethical diamond trading isn’t just about meeting regulations—it’s a gateway to market trust, UAE incentives, and long-term success. By aligning with the Kimberley Process (KP), you unlock opportunities in a thriving, transparent industry.

Ready to elevate your diamond trade? Get expert guidance on KP compliance with JSB.

Book your free consultation call today with the experts of JSB Incorporation to set up your diamond business in the UAE.