Introduction
The Suppliers and Customers Code of Ethics applies equally to and is fully observed by International Precious
Metal Refiners (IPMR) branches in Abu Dhabi, Sharjah, and Dubai. Any reference to “IPMR” in this document
refers equally to each of the above companies.
1. Purpose
This Standard governs the conduct of all Suppliers of all types and forms of precious metals and/ or products
to “IPMR”.
This Standard governs the conduct of all Customers buying any product from IPMR.
It sets the standards of ethical conduct that is required from the supplier community, provides for selfcertification against all standards, validation of the self-certification, and procedures for proceeding or
terminating contracts with suppliers that do not meet these standards.
2. Application
Social responsibility guides the operation of “IPMR” in the conduct of its business in the global precious
metals industry. This Standard has been designed to help Suppliers and/ or buyers, understand their
responsibilities and to create an awareness of the business and ethical standards that they must follow in
their business dealings with “IPMR”. The key attributes expected from Suppliers and/ or Customers are:
- Integrity
- Transparency
- Honesty and
- The Highest Ethical Standards
3. Definitions
For the purpose, of this document the below are defined
Suppliers: Parties that source any kind of metal to IPMR (Gold, Silver, Platinum, and Palladium).
Parties that source any kind of chemicals or any other element that is used in the refining
process.
Customer: Parties that initiate a business relationship with IPMR to buy our products and not sourcing any
metal to IPMR.
4. Administration and Interpretation
Enquiries, comments, and recommendations related to this Standard and supporting Procedures must be
communicated to the Compliance Officer of “IPMR”.
Definitions applicable to the understanding and application of the requirements contained in this
Standard located in Appendix A, Appendix B, Appendix C, and Appendix D.
Suppliers and/or customers must read, understand, and accept in writing the following conditions of
dealing with “IPMR”.
5. Compliance with Laws
Suppliers and/or customers must comply with all applicable laws, rules, and regulations in every jurisdiction
in which they do business with “IPMR”. Local laws might change in restriction to this Standard in some
instances. In such events, Suppliers and/or are expected to comply with this Standard, even if the conduct
would otherwise be legal under applicable laws. If local laws are more restrictive than this Standard,
Suppliers and/or Customers are expected to, at a minimum, comply with applicable local laws.
UN Global Compact (see Appendix A) The ten principles of the Global Compact are based on
internationally recognized norms and conventions in four critical areas: Human Rights, labor related
standards, the Environment, and Anti-corruption. In all business dealings with “IPMR”, Suppliers and/or
customers must comply with the principles of the UN Global Compact (see appendix A for reference). UN
principles apply to customers when dealing with IPMR and other downstream parties.
MOE Due Diligence Regulations for Responsible Sourcing of Gold (see Appendix B). The Regulations
aim to inform the regulated Entities of the measures to be adopted in relation to responsible sourcing of gold
from CAHRAs as part of their overall AML/CFT controls framework. Regulated Entities must comply with
all sections of the Regulations and should incorporate the requirements into their broader AML/CFT policy
and procedures. The Regulated Entities should also inform themselves of the scope and application of all
applicable AML/CFT Legislation targeted at DNFBPs. Regulated Entities should apply Due Diligence
proportionally to its identified risk in the business activities and to those involved in its gold Supply Chains.
OECD Due Diligence Guidance for Responsible Sourcing of Minerals from CAHRAs (see Appendix
C). In 2012 the OECD issued a “Supplement on Gold” to its paper on Due Diligence Guidance for
Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Area. It sets the framework
on conducting due diligence and developing a risk management framework for responsible supply chain
management of gold and precious metals when sourcing from conflict-affected and high -risk areas. The
guidance provides a common reference for all actors in the supply chain on a step-by- step basis to ensure
responsible sourcing and chain of custody of the gold and precious metals and to eliminate the risk of direct
or indirect support to any kind of conflict in accordance with international standards. (See Appendix C for
reference).
Emirates Bullion Market Committee Rules for Risk Based Due Diligence in the Gold Supply Chain
(see Appendix D) The Rules for RBDG follow the 5-step framework for risk- based due diligence for
responsible supply chain of minerals from conflict-affected and high -risk areas.
The Regulations apply to all regulated entities established and / or operating in the territory of the UAE and
all commercial free zones and the members of their boards of directors, management and all employees.
6. Certification process applies to Metal suppliers and Customers (buying IPMR products)
“IPMR” will certify and approve suppliers and accept their products once the supplier has passed our
internal (Risk Based Approach RBA) risk assessment process. All collected information and data is
reviewed and analyzed by the IPMR compliance team. Post certification, the supplier and/ or becomes a
nominated entity to enter any deal with “IPMR” whenever required. The certification will occur at the outset
of the relationship with the supplier and / or the customer and will be an on-going process and subject to
frequent review in accordance with the level of risk involved in accordance with IPMR internal policies.
“IPMR” has the right, but not the obligation, at its sole discretion to terminate the business relationship at
any point if the standards required are not met by the supplier and/ or the customer for any business’s related
reasons. At the time of any termination for the business relationship with the supplier and/ or the customer,
“IPMR” will decide at its sole discretion whether to disclose the reasons for any such action or not.
7. Certification process applies to Chemicals suppliers.
“IPMR” will certify and approve chemical and other elements suppliers and accept their products once they
satisfy IPMR internal requirements. All collected information and data is reviewed and analyzed by the IPMR
compliance team. Post certification, the supplier becomes a registered entity to provide IPMR with chemicals
and or other elements used in the refining process whenever required. The certification will occur at the
outset of the relationship with the supplier and will be an on-going process and subject to frequent review in
accordance with the level of risk involved in accordance with IPMR internal policies. “IPMR” has the right,
but not the obligation, at its sole discretion to terminate the business relationship at any point if the standards
required are not met by the supplier for any business-related reasons. At the time of any termination for the
business relationship with the supplier, “IPMR” will decide at its sole discretion whether to disclose the reasons
for any such action or not.
APPENDIX (B)
The Ministry of Economy Due Diligence for Responsible Sourcing of Gold
MOE Due Diligence Regulations for Responsible Sourcing of Gold, is based on the OECD guidance for
responsible sourcing of minerals from CAHRAs, it sets out a step-by-step framework for risk based due
diligence in the gold and precious metals supply, a summary of the key aspects is set out below:
STEP 1: ESTABLISHING AN EFFECTIVE GOVERNANCE FRAMEWORK
Companies involved in the responsible sourcing of gold are expected to establish a robust
governance framework based on the OECD Guidance for Responsible Sourcing of Minerals from
Conflict-Affected and High-Risk Areas (CAHRAs). The key requirements are outlined below.
1.1 Adopt and commit to a policy for gold supply chain due diligence.
A company adopts a documented gold supply chain policy that incorporates the risks and risk measures.
The policy and supporting procedures should include details on the Gold Supply Chain Due Diligence which
the company will assess itself and activities, and relationships of suppliers.
1.2 Establish management structure to support supply chain due diligence.
Regulated Entities must establish an internal governance system to effectively implement and maintain a
Supply Chain Due Diligence program on an ongoing basis.
1.3 Establish system for transparency, information sharing and control on gold supply chain
Regulated Entities must document the Supply Chain Due Diligence findings and information in a systematic
way which ensures visibility on the entire Supply Chain of gold. Regulated Entities should conduct Due
Diligence on immediate counterparty in a
1.4 Strengthen the company engagement with gold supplying counterparties
Regulated Entities should build long-term relationships with suppliers and should make their suppliers
commit to a Supply Chain policy consistent with the Regulations and Appendix II of the OECD Guidance.
This should be achieved by the following:
-
1.4.1
Communicating the expectations of the refiners to the supplier on due diligence for responsible Supply
Chains of gold from CAHRA. This should be done by requiring the supplier to commit to the refiner’s gold
Supply Chain policy; or through supplier’s own policy
-
1.4.2
Sharing the AML/CFT Legislation, the Regulations, OECD Guidance, and Gold Supplement with all
suppliers.
-
1.4.3
Incorporating the Supply Chain policy in line with the subject Regulations into commercial contracts
and/or written agreements with suppliers which will be legally binding.
-
1.4.4
Supporting suppliers through capacity building measures and information sharing to improve Supply
Chain practices of suppliers and other parties in the Supply Chain.
1.5 Establish a confidential grievance mechanism.
Regulated Entities must implement a grievance mechanism through which the employees or other
stakeholders in the Supply Chain should be able to raise concerns related to sourcing or trading of gold from
a CAHRA. The mechanism should ensure that: a. employees or other stakeholders are enabled to report any
misconduct, or an improper state or circumstances in a secured way that protects the identity and from
criminal and administrative liabilities.
STEP 2: IDENTIFICATION AND ASSESMENT OF THE SUPPLY CHAIN RISK
2.1 Conduct Supply Chain due diligence to identify potential risks.
Regulated Entities must identify and assess the risks in the Supply Chain to carry out required due diligence.
Due diligence must be undertaken before entering into a new business relationship with a supplier and should
be carried out on an ongoing basis. Conducting risk assessment will help to tailor the due diligence according
to the risks identified. Where high risk Supply Chain is identified, enhanced due diligence measures should
be taken to mitigate the risks.
The risk assessment should be carried out using risk factors as below:
- Counterparty Risk Factors
- Geographical Risk Factors
- Transaction Risk Factors
- Product Risk Factors
- Delivery Channel Risk Factors
2.2 Identify red flags/ high risk indicators in the gold supply chain.
Regulated Entities should identify the potential red flags in a Supply Chain of gold. Red flags can be broadly
categorized as below:
- Location Based Red Flags
- Supplier Based Red Flags
- Circumstances Based Red Flags
2.3 Undertake enhanced Due diligence measures for high-risk Supply Chain.
If there are high-risk elements or red flags identified in the Supply Chain or unknown information, Regulated
Entities should conduct EDD measures prior to engaging with such suppliers.
EDD consists of site visits, desk- based reviews, and reviewing of sample transactions of suppliers on an
ongoing basis.
EDD for high-risk relationships should be carried out during the establishment of relationship and on an
ongoing basis (at least on bi-annual basis).
STEP 3: MANAGEMENT OF THE SUPPLY CHAIN RISK
Regulated Entities should evaluate and respond to identified risks through EDD to mitigate the identified risks.
The following steps are minimum expected to mitigate the risks identified. Regulated Entities are encouraged to
consider the potential social and economic impacts of risk mitigation measures adopted by them. A risk
management plan should be subject to continuous review based on changes in circumstances related to business,
operations or supply base, risk nature, or a major change in applicable rules and regulations.
3.1 Devise a risk management strategy for the identified risk.
According to the risks identified as per procedures in Step 2 of this document, Regulated Entities should
adopt a risk appetite approach which should establish the methods of risk treatment as below. A Risk appetite
policy should be part of the overall Supply Chain risk policy.
- Establish or continue: Based on the documents and information gathered through EDD, Regulated
Entities may establish or continue existing relationships if it assesses that the supplier is managing the
risks to a reasonable extent.
- Suspend: If EDD concludes that there is a founded suspicion of Money Laundering, Terrorist Financing,
human rights abuses, environmental degradation direct or indirect support to illegitimate non state armed
groups, fraudulent misrepresentation of origin of goods, the Regulated Entity should suspend
engagement with such supply chain till risk mitigation measures are adequately completed.
- Terminate: Upon identifying instances of Money Laundering and Terrorist financing, human rights abuse
and support to armed conflicts, Regulated Entities should immediately terminate its relationship with the
supplier. During such instances, the Regulated Entity should submit an appropriate report to the FIU
3.2 Risk Control Plan
Regulated Entities that adopt an ‘Establish/Continue’ or ‘Suspend’ approach, shall adopt a Risk Control Plan
which should include, at minimum:
- Reporting mechanisms for identified risks to the senior management.
- Enhanced engagement with suppliers through establishing a Chain of Custody and/or traceability system
where a red flag has been identified.
- Enhancement of the physical security practices.
- Physical segregation and security of shipments where a red flag has been identified.
- An agreement with the supplier which facilitates timely and accurate provision of additional information
related to supply chain with identified risks.
- Disengaging with suppliers for at least 3 months, when they fail to comply with the mitigating controls
within a period of 6 months, and/or disengaging entirely if such controls are not feasible and/or
unacceptable in the light of the cost-benefit analysis and the capabilities of the Regulated Entities
conducting the due diligence.
- Reviewing on a regular basis the results of the mitigation measures, undertaking additional fact & risk
assessments for identified risks requiring mitigation or after a change of circumstances.
3.3 Continuous Monitoring
Continuous Monitoring Supply Chain Due Diligence is a dynamic process and requires ongoing risk monitoring.
After implementing a Risk Control Plan Any changes in the Supply Chain may require the Regulated Entity to
repeat some due diligence steps to ensure effective monitoring of risk.
3.4 Senior Management Reporting
The identified risks in the Supply Chain and Risk Control Plan should be reported to a Regulated Entity’s board
of directors (or equivalent) and senior management on periodic basis (at least every 3 months). The report should
include counterparties identified as high-risk and the respective Risk Control Plan
STEP 4: INDEPENDENT THIRD-PARTY AUDIT OF DUE -DILIGENCE
Regulated Entity’s compliance with the Regulations will be subject to annual independent third-party audit by
an accredited Reviewer as stipulated in the Review Protocol (ANNEX I). Review of a Regulated Entity’s Supply
Chain Due Diligence framework should be carried out by an approved Reviewer and should be arranged at the
Regulated Entity’s own cost.
4.1 Audit Plan
Regulated Entities should plan the audit in line with the Regulations and consider the below elements.
- Audit scope: the audit scope should include all the major elements of a Supply Chain Due Diligence
framework as outlined in the Regulations. These are Supply Chain Due Diligence policy and procedures,
the processes and systems, Supply Chain risk assessment and risk mitigating measures, supplier
engagement details, chain of custody, and other traceability information.
- Audit criteria: The audit should determine the conformity of the implementation of a Regulated Entity’s
Supply Chain Due Diligence framework against an audit standard that is based on the Regulations. This
should also determine conformity to and compliance with the Regulations in all communications with
participants across the entire Supply Chain.
- Audit principles: The Reviewer organization and all of its members must be independent from the
Regulated Entity as well as from the Regulated Entity’s subsidiaries, licensees, contractors, and
suppliers.
- Competence: Reviewers should be competent enough to conduct the review efficiently.
- Accountability: List of accredited Reviewers shall be published on the MoE’s website.
- The Audit activities must cover audit preparation that covers the objectives, scope, language, and criteria.
- Onsite investigation: The reviewers must conduct onsite investigations and gather evidence and verify
information by conducting interviews with management, making observations; The review should
include visits of all sites where the Regulated Entity carries out business and should thoroughly review
sample from suppliers of Regulated Entities.
- Document Review: Sample documents gathered during the review i.e., documents retained as
part of a Regulated Entity’s Supply Chain Due Diligence framework.
- Audit Conclusions: Reviewers should generate audit findings based on the evidence gathered with the
audit standard that is consistent with the recommendations of this section of the Regulations. Auditors
should also make recommendations in the audit report for the Regulated Entity to improve their due
diligence practices.
- The Report should also be published in line with step 5 of the MOE Due Diligence Regulations for
Responsible Sourcing of Gold.
4.2 Audit implementation.
Audit should be implemented in accordance with the audit scope, criteria, principles, and activities as documented
in Step 4 of the MOE Regulations. Regulated Entities should co-ordinate the relevant stakeholders to carry out
audits in line with recommended audit standard as set out in this document.
STEP 5: ANNUAL REPORTING ON DUE-DILIGENCE
Regulated Entities should submit all audit reports stipulated under section 12 of ANNEX I to the MoE on an
annual basis. The Comprehensive Management Report issued by the Reviewer should consist of the following
elements at a minimum.
5.1 Management systems
The Regulated Entities Comprehensive Management Report should include the management systems
requirements as set out in Step 1 of the Regulations. The Comprehensive Management Report should include:
The Regulated Entity’s management structure, roles and responsibilities with regard to Supply Chain Due
Diligence.
- Policy & procedures.
- KYC & information collection procedures.
- Database & record keeping system.
- Procedures for identification and verification of all counterparties in the Supply Chain system.
5.2 Risk Assessment
Regulated Entities should include in their Comprehensive Management Report the risk assessment procedures
(Step 2). In particular, Regulated Entities should include:
- How the red flags are identified,
- Details of the red flags identified.
- Describe the steps taken to map the factual circumstances of those red flag operations and red flagged
Supply.
- Methods of assessment teams including collaboration with other stakeholders in the Supply Chain.
- Actual or potential risks identified.
5.3 Risk Management
Risk Management Regulated Entities should include, in their Comprehensive Management Report, the risk
management procedures (Step 3). In particular, Regulated Entities should include:
- The internal controls that would have assisted in gathering required information on red flagged Supply
Chain.
- Describe the steps taken to manage risks, including a risk strategy for risk mitigation, procedures, and
mechanism in place to monitor remediation activities.
- Details of actions taken as part of risk mitigation (number of instances where a Regulated Entity has
- decided to continue, suspend or terminate relationships) without disclosing the identity of those
suppliers, except where law allow to do so.
APPENDIX (C)
OECD Guidance for Responsible Supply Chain Management of Gold and Other Precious
Metals from CAHRAs
In 2012 The Organization for Economic Co-operation and Development (OECD) issued a “Supplement on
Gold” to its paper on Due Diligence Guidance for Responsible Supply Chains of Minerals from ConflictAffected and High-Risk Areas. It sets guidelines on conducting due diligence and developing a risk management
framework for responsible supply chain management of gold and precious metals when sourcing from conflictaffected and high- risk areas. The guidance provides a common reference for all actors in the supply chain on a
step-by-step basis to ensure responsible sourcing and chain of custody of the gold and precious metals and to
eliminate the risk of direct or indirect support to any kind of conflict in accordance with international standards
“IPMR” has adopted these rules and it is the responsibility of everyone involved in the global precious metals
business, including our suppliers, to fully understand these OECD rules to ensure that they are in full compliance
with the principals of responsible supply chain management of precious metals.
While supplies from those refineries that hold an international accreditation such as the London Bullion Market
Good Delivery or the UAE Good Delivery standards can be categorized as low risk in as much as they have to
adopt and follow the MOE/OECD rules in order to obtain and retain their approval status, nevertheless the rules
below do apply to all supplies of precious metals, particularly gold with its high value and geographic locations
of production in possible high -risk areas.
A. A company must ensure that robust systems are in place in the gold and precious metals supply chain
to ensure that its conducts effective due diligence on the supply chain.
- A company must assign a dedicated compliance or risk officer with the following conditions:
- The Compliance Officer should be a senior staff member; and should have the necessary competence,
knowledge, experience and training in supply chain due diligence; and must be equipped with the
necessary resources to perform the relevant duties and be able to communicate critical information to
top management, staff and suppliers.
B. A company must ensure that adequate documentation, records of supply chain and due diligence are
maintained which should include the following:
- Physical form, type and physical description of gold and precious metals including any Imprints and/or
hallmarks.
- Weight and assay of gold and precious metals after proper own verification and/or through third party
verification.
- Full KYC due diligence of all suppliers including their due diligence practices, which need to conform
to international standards. The KYC form should also include the company’s suppliers and locations.
- Unique reference number for each entry/input and exit/output.
- Name, stamp, and logo of refiner/producer/manufacturer (if applicable).
- Year of refining/production (if applicable).
- Dates of purchases and sales.
- Inventory list classified as per supplier
All documentation should be kept for at least five years and we must have a mechanism for tracing products
back to the origin of the purchased material, known as ‘Track and Trace’. Documents should include the
following:
- Shipping/transportation documentation.
- Sales documents with specific lot numbers.
- Mining license and related permissions.
- Import/export licenses and forms
C. A company must ensure that we have strong relationships with suppliers through the following:
- Maintaining adequate KYC due diligence process for suppliers including reviewing suppliers’ own
due diligence practices.
- Establishing long-term relationships.
- Sharing with suppliers the EBC/MOE/ OECD guidance and acknowledging the receipt and
compliance of the suppliers with the EBC /MOE/ OECD rules.
D. A company must conduct regular training for all Staff involved in the responsible supply chain
process.
This includes initial training for new staff and refresher sessions for existing staff based on the level of risks
and job profiles in engaging with the supply chain participants.
E. A company must Identify and assess the risks in the supply chain.
The objective of this is for companies in the supply chain to identify and assess the risks associated with
gold and precious metals, which they either: produce, distribute, transport, export or purchase. A company
must conduct a risk-based assessment on each party included in the supply chain from the mines including
suppliers, exporters and transporters of newly mined, or recycled gold and precious metals. Factors to take
into consideration for conducting the risk assessments are as follows:
The geographical location of gold and precious metals supply:
- Origin and transportation.
- The level of government regulation and supervision in the country of origin.
- The extent of cash transactions used in the country of origin.
- The level of conflicts or human rights abuses in the country of origin.
- Payment systems used in the country of origin. I.e. formal banking versus informal systems such as
money exchanges and ‘Hawalas’.
- Level of involvement of criminal organizations in the country of origin.
- Level of high-risk businesses (such as gaming and casino, etc.) in the country of origin.
- Level of access from a country to nearby markets or processing operations that are termed as conflict
and/or high-risk areas.
- Level of enforcement of laws addressing significant criminal activity in the country of origin.
- Existence of sanctions and/or embargoes that have been directed against the country and
individuals/entities in that country.
When assessing counterparty risk in the supply chain a company should focus on the following:
- KYC information of the company’s suppliers, which should include information about the origin and
transportation of the gold and precious metals.
- Red flags (obvious high risks) in any aspect of the entire supply chain.
- Number of suppliers i.e. the greater, the higher the risk.
- Level of control that the counterparty has over its suppliers.
- Level and adequacy of due diligence practices of the counterparty.
- Whether the counterparty has due diligence practices that have been audited by a qualified third-party
auditor.
- How long the counterparty has been in the gold and precious metals business (longer = lower risk).
- No indication and/or disclosure of beneficial owners of the counterparty.
- Seeking anonymity by intermediating third parties such as lawyers, accountants, etc.
- Scale of mining operations of the supplier, if applicable.
- Politically exposed persons that have been entrusted with prominent public functions or individuals
who are closely related to such persons.
When assessing transaction risk in the supply chain a company should focus on the following:
- Due diligence should be proportional to the value of the transaction.
- Gold and precious metals that are transited and/or exported which are not reasonably reconciled with
the declared location of the origin.
- Unexplained geographic distance in the supply chain.
- Melted recyclable gold and precious metals is higher in risk than unprocessed recyclable gold and
precious metals.
- Unusual circumstances which are not consistent with the local practices (amount, quality, potential
profit, level of discount etc.).
- Use of cash in excess of government thresholds.
- Payment by cash and/or physical delivery to unrelated third parties.
- Structuring to make payments in smaller multiple transactions to avoid the government thresholds.
F. A company should adopt a system of red flags (high risk warnings) with respect to the location of
supply, the nature of the suppliers, and circumstances of the supply with an in -depth review of any
supply that raises a red flag.
Location-based red flags of gold and precious metals related to origin and transportation include the
following:
- The gold and precious metals originate from or have been transported through a conflict-affected or
high-risk area.
- The gold and precious metals are claimed to originate from a country that has limited known reserves
or stocks, likely resources or expected production levels of gold and precious metals (i.e. the declared
volumes of gold and precious metals from that country are in excess of its known reserves and/or
expected production levels).
- The gold and precious metals are claimed to originate from recyclable/scrap or mixed sources and has
been refined in a country where gold and precious metals from conflict-affected or high-risk areas is
known or reasonably suspected to transit.
In each of these location-based red flag considerations, the risk is increased when anti-money laundering
laws, anti-corruption laws, customs controls and other relevant government laws are weakly or not enforced,
where informal banking systems operate, and when cash is extensively used.
Supplier-based red flags include the following:
- Suppliers or other known upstream companies operate in one of the red-flagged locations of gold and
precious metals’ origin and transportation or have shareholder(s) or other interests in suppliers of gold
and precious metals from one of the above-mentioned red flag locations of gold and precious metals’
origin and transportation.
- Suppliers or other known upstream companies are known to have sourced gold and precious metals
from a red flagged location of gold and precious metals origin and transit in the last 12 months.
Circumstances-based red flags include the following:
-
Anomalies or unusual circumstances that are identified through the information collected in the KYC
process give rise to reasonable suspicion that the gold and precious metals may contribute to conflict or serious abuses associated with the extraction, transportation of and/or trading in gold and precious
metals.
A company should conduct enhanced research on red-flagged suppliers prior to engaging with them, which
would include some or all the below mentioned research methods based on the outcome of the risk
assessments and the pertinent cost-benefit analysis in proportion to the level of the risks identified:
Desk research:
- Identify each company in the supply chain.
- Identify the beneficial owner(s) of each company in the supply chain.
- Obtain financial information on each company in the supply chain.
- Ensure that each company in the supply chain holds the necessary permits and licenses.
- Ensure that each company in the supply chain is not listed on any sanctions and/or embargoes list
On-site visits to gold and precious metals suppliers and/or keeping independent or joint on-theground assessment teams to generate and maintain information on the circumstances and processes
of the following activities:
- Gold and precious metals extraction (physical access to mines, mine capacity against recorded mine
production and discrepancies)
- Gold and precious metals processing (consolidation, blending, crushing, milling, smelting, refining, etc.
and recording any discrepancies in the processing and/or production and related capacity of the facility
to perform relevant activities)
- Handling of gold and precious metals (inventory, trans-shipment, relabeling, etc.)
- Transportation of gold and precious metals
- The weight and assayed quality characteristics of the gold and precious metals that are used in the above
activities.
G. A company should develop and implement a risk mitigation/control plan with the objective of
controlling the identified risk(s) to mitigate any adverse implications.
This policy should include the following:
- A reporting mechanism for risks identified to company’s senior management and the concerned
compliance or risk (or supply chain) officers.
- Enhanced engagement with suppliers through establishing a chain of custody and/or traceability system
from a red-flagged supply chain.
- Enhancing the physical security practices.
- Physically segregating and securing shipments from a red-flagged supply chain, avoid co-mingling
supplies from a red flag area or supplier with those from a low- risk geographic area and/or an accredited
refinery.
APPENDIX (D)
Emirates Bullion Market Committee Rules for Risk Based DD
EMIRATES Bullion Market COMMITTEE Rules for Risk Based Due Diligence in the Gold Supply chain
the mentioned rules follow the 5-Step framework for risk- based due diligence of the OECD Due Diligence
Guidance for responsible Supply Chain of Minerals from conflict-affected and high- risk areas. As
elaborated in appendix ( ) and as summarized below
RULE 1. SUPPLY CHAIN MANAGEMENT SYSTEMS
Each member conducts business in the supply chain relating to mined gold and recycled gold must
implement and maintain systems and procedures which are sufficiently robust to effective due diligence on
the member’s supply chain. The complexity of the management system should depend on the volumes of
business, location, types of supplies processed, and complexity in the supply chain.
RULE 2. SUPPLY CHAIN RISK IDENTIFICATION AND ASSESSMENT
Each member conducts business in the supply chain relating to mined gold and recycled gold must be
individually responsible for applying and implementing its policy and management system and mapping its
supply chain in order to identify and assess the risks of contributing to conflict, Money Laundering,
Terrorism Financing serious human rights abuses or environmental and social issues associated with gold
which they produce, distribute, transport, export, sell, and/ or purchase.
If the accredited member can reasonably determine on the basis of the information collected under Rule 1
that it does not deal with gold mined, transported or traded in a conflict-Affected and High- Risk Area, no
additional due diligence is required.
The management system should be maintained and regularly reviewed, each member is expected to improve
its due diligence practices and risk assessments over time.
If the accredited member is not able to reasonable determine on the basis of the information that it does not
deal in gold mined, transported or traded in any of a Conflict-Affected and High-Risk area, it is mandatory
to carry out an additional, more depth due diligence.
RULE 3. RISK CONTROL PLAN
Each member conducts business in the supply chain relating to mined gold and recycled gold must develop
and control any identified risk (s), including emerging risks and incident reporting, and mitigate against any
adverse implications of such risk(s). (Risk Control Plan). The Risk Control Plan is designed to assist the
accredited member in making informed decisions in respect of:
a- Continuing to trade but with measurable risk mitigation for low -risk situations.
b- Temporarily suspending trade while mitigating is implemented for medium-risk situations.
c- Ceasing to trade with a concerned supplier for high-risk situations in accordance with the OECD
Guidance.
Members are encouraged to consider the potential social and economic impacts of risk mitigation members
should engage and support relevant industry programs while understanding the impact that this may have
on developing countries and relevance to other existing international recognized standards.
RULE 4. INDEPENDENT THIRD-PARTY AUDITS
Each accredited member is required to ensure its own compliance with these RBDG and arranging at their
own cost for this compliance to be reviewed by an independent third-party reviewer.
RULE 5. ANNUAL REPORTING ON RESPONSIBLE SUPPLY CHAIN DUE DILIGENCE
Each accredited member is required to publicly report annually on its supply chain due diligence in
compliance with Step -5 of the OECD Guidance to generate public confidence in the measures that it has
implemented.