Page 26 - Bullion World Issue 7 November 2021

Bullion World | Issue 07 | November 2021

and will take time to achieve its carried out by the supplier rather channels from the point of export
objectives. Since sending the than the refiner’s direct supply in the country of production to any
initial letter, all 12 IBCs have been chains only. onward counterparty. This ASM
supportive of LBMA’s initiative practice and/or cash transaction
and are proactively developing The revision categorises types below the stipulated threshold
their own agenda to support the of recycled gold by the level of should be supported by verifiable
development of Responsible risk posed and provide additional information and approved by a
Sourcing practices. In addition, the due diligence and enhanced due refiner’s Compliance Officer.
OECD engaged directly with all 12 diligence guidance per category.
centres, starting with a meeting in To address calls to extend Provision of support for
May 2021 to further the countries’ due diligence beyond Tier 1 responsible ASM
work on implementing the Due suppliers, version 9 stipulates the The guidance will continue to
Diligence guidance. requirement for secondary refiners stipulate LBMA’s support for
supplying recycled melted gold to measures to create economic and
Furthermore, LBMA, together with LBMA Good Delivery refiners to development opportunities for
external consultants, is developing undergo independent assurance ASM miners and assist legitimate
a methodology to help review the on conformance with an OECD- ASM producers to build secure,
Responsible Sourcing progress approved responsible sourcing transparent, and verifiable gold
in each IBC. This will help LBMA scheme. supply chains from mine to market.
strengthen its constructive dialog The guidance will be updated to
with each centre in 2022. The disclosure of disaggregated provide streamlined due diligence
* China, Hong Kong SAR, India, data in their confidential country of requirements for legitimate ASM
Japan, Russia, Singapore, South origin filings will provide LBMA with supply chains.
Africa, Switzerland, Turkey, UAE, more accurate data with which to
UK and USA. monitor and analyse market trends. Environmental Social
Governance (ESG)
2. Advancing Standards: Elimination of cash Builds on the ESG requirements
Responsible Gold Guidance transactions that were first introduced in version
version 9 Is a first step toward prohibiting 8. It requires refiners to consider
Version 8 of the Responsible Gold cash transactions except in and report on adverse ESG
Guidance (RGG), launched in 2018, jurisdictions with rigorous checks factors in their gold supply chain.
marked a major strategic expansion and balances or when dealing While LBMA acknowledges the
to include Environmental, Social with ASM between mine site and inclusion of ESG to be a significant
and Governance (ESG) issues. national level aggregator only. step change for refiners, LBMA’s
RGG version 9 will be released in vision is to deploy a graduated
2021 after undergoing a thorough For transactions over $10,000 in programme of implementation for
public stakeholder consultation, value, refiners must make and this important aspect of precious
and is applicable for all GDL receive payments for gold through metals due diligence.
refiners with effect from 1 January official banking channels and
2022. should not undertake any cash- Disclosure guidance
based transactions. Refiners may Reaffirms our commitment to
The main changes reflected in only make cash transactions with ongoing improvements to the public
version 9 include: suppliers who have successfully disclosure of information. This
passed an identity check and are is particularly relevant as LBMA
Recycled Gold issued with an official tax receipt. meets the challenge of complying
Provides further clarity on the due Such suppliers are limited to a with OECD reporting requirements
diligence expectations for recycled maximum of two such transactions relating to high-risk supply
material including what forms of in a calendar year. chains and any discontinuance of
paperwork are required to give relationships due to concerns about
assurance of origin and legality. It Cash purchases of legitimate ASM a supplier’s sourcing practices.
will be expected that the refiner’s gold may be permissible as long as
assessment of the supplier should all transactions involving legitimate After consultation with the OECD,
cover all precious metals activities ASM gold are made through formal refiners will begin to disseminate

26