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Govt to work with OECD to prepare norms for gold imports, refining

India’s government and bullion industry will joins hands with the Organisation for Economic Cooperation and Development (OECD) to prepare a policy on responsible sourcing of gold, covering import, refining and delivery. A task force is being set up, according to sources. Tyler Gillard, head of responsible sourcing and sector projects at OECD, recently in Delhi for a conference organised by the Bullion Federation of India (BFI), said in a telephone interview, “After meeting minister of state for finance (Arjun) Meghwal and various industry representatives, I am optimistic about India implementing the OECD Due Diligence Guidance for Responsible Gold Supply Chains.”

Its guideline for gold prescribes sourcing of dore or unrefined gold so as to ensure it is not from mines which are illegal or mined or sold by entities which are anti-social and so on. It also audits and certifies refineries. Gold sold by refineries following the OECD norms are eligible for delivery on exchange platforms and for use by exporters. At present, only gold from refineries approved by the London Bullion Market Association (LBMA) and Dubai Gold Delivery are considered good for delivery in Indian exchanges and for export. Gillard added, “The next move would be to form a working group of representatives from the Indian government, OECD and the Indian gold industry, including the BFI, Gems & Jewellery Export Promotion Council and the Indian Bullion & Jewellers Association. It will seek to propose a responsible gold audit system, based on the OECD Guidance and taking into account India’s own market characteristics.”

Implementing the OECD Guidance would, he said, help India to increase its jewellery export, attract more quality investment in the sector and tackle illicit activity linked to the gold trade. Harish Acharya, secretary of BFI, said: “LBMA norms are not conducive for the Indian business situation and OECD norms will be prepared keeping in mind the Indian industry situation. We will be setting up four zonal training and facilitation centres, where government, industry and OECD will have representatives. Under OECD guidelines, refineries will have to be annually checked by certified auditors and “these centres will be facilitating points”, said Acharya.

Courtesy: Business Standard