 "gold")
The move comes after some instances came to light where pure gold was imported as dore. Indian Bullion and Jewellers Association also wrote to the government to address this issue.
Customs duty on dore is of 8.75 per cent while for pure gold it is 10 per cent. IBJA has proposed, “that gold refiners follow stringent client acceptance procedures. Refiners shall be asked to commit to gold supply chain policy consistent with Annex II of OECD due-diligence guidelines.” It said gold dore should be sourced only from mining companies that comply with the guidelines and this should be made an integral part of the import license issued by Directorate General of Foreign Trade (DGFT).
The suggestion assumes significance on two counts. As a global forensic auditor told this paper, globally the gold and jewellery sector has been identified as most vulnerable to money laundering and diverting of funds for financing terror organisations.
According to a report prepared by Rhona O’Connell of GFMS, Thomson Reuters, in February, “In China, the government, embracing its role as a UN Security Council Permanent Member, has expressed support for the OECD guidelines. While measures are widely promoted by government authorities, the regulations are not being strictly enforced and implemented within the country.” However, the report said in India “there is a lack of initiative from the government; the OECD has stated its intention to work closely and raise awareness.”
The norms assume significance because gold mined from some African and Latin American nations were reportedly used to finance terror organisations. GFMS estimates such trade at 118 tonnes in 2015, four per cent of global output.
ACTION PLAN TO SAVE YELLOW METAL
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Adopt, and clearly communicate to suppliers and the public, company policy for the supply chain of minerals originating from conflict-affected and high-risk areas
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Structure internal management to support supply chain due diligence
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Establish a system of controls and transparency over the mineral supply chain
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Strengthen company engagement with suppliers. A supply chain policy should be incorporated into contracts and/or agreements with suppliers
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Establish a company-level, or industry-wide, grievance mechanism as an early-warning risk-awareness system
- Apart from OECD, many other organisations like LBMA and others have also prescribed such practices to be followed by gold refiners
