Policies & Issues

Open Letter Calls for Heightened Gold Supply Chain Vigilance

Policies & IssuesMar 10, 2022

Open Letter Calls for Heightened Gold Supply Chain Vigilance

Penned by the Global Gold Transparency Initiative, it outlines steps the industry can take to ensure it’s not sourcing Russian gold.

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New York—The jewelry industry needs to make sure the Russian government can’t use the gold supply chain to evade sanctions and fund its ongoing invasion of Ukraine, several organizations said in an open letter to the trade.

Included on the list of U.S. sanctions are diamond miner Alrosa and its CEO along with several key Russian banks, measures taken to cut Russia off financially. 

To ensure gold doesn’t provide a way around sanctions, a group of experts recently met to evaluate the risk and identify possible actions the jewelry industry can take to avoid being exploited by Russia. 

The group, referring to itself as the Global Gold Transparency Initiative, includes industry experts and groups working in responsible jewelry supply chains, the Jewelers Vigilance Committee, Amazon Aid Foundation, Jewelers of America, MJSA, Responsible Jewelry Transformative, the U.S. State and Treasury Departments, the Organisation for Economic Co-operation and Development, and experts on global anti-illicit trade and security.  

In the letter, the groups said Russia may already be liquidating its gold reserves or using them for barter or trade, as the Bank of Russia has returned to buying domestic gold for the first time in two years. 

Reports also indicate increased Russian gold buying activity in Venezuela for the first time since the war against Ukraine started. 

The groups said they believe Russia, the third largest gold producer in the world, will push its gold through jewelry supply chains since jewelry accounts for nearly 39 percent of global gold demand, second only to gold purchased for investment. 

“We call on all worldwide jewelry industry organizations to be vigilant,” the groups said in their letter. 

 Related stories will be right here … 

Recommended actions for the industry made in the letter are as follows:
--Verify sources of gold;
--Contact refiners and suppliers to communicate that a double-check of their sources of gold is expected; and
--Make it clear to supply chain partners that those who assist Russia by buying its gold or using it in trade will not be tolerated.

The groups also noted the industry in some countries merits “heightened attention”—China, India, and the United Arab Emirates, for example, abstained from voting on the UN Security Council resolution condemning Russia’s invasion (though UAE later voted to condemn them during the UN General Assembly), and Turkey indicated it has no intention of imposing sanctions on Russia.

While the reasoning behind these decisions are complicated and don’t necessarily indicate support for Russia, these countries are key jewelry-producing and trading countries, and it is important to let suppliers in these regions know that gold sources are expected to be well-documented and not purchased from Russian origin after Feb. 24, 2022, the letter states.

To read the full letter and view the organizations’ complete guidance, visit GlobalGoldTransparency.com.

A communications toolkit has also been created, which can be accessed online here

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