RJC recognises release of SEC’s Dodd-Frank rule

RJC believes that the release confirming the implementation of the US Security and Exchange Commission’s (SEC) Act now turns the attention to the role of industry programmes in supporting compliance. Since 2010, RJC has worked with a wide range of stakeholders to develop a certification standard aimed at the responsible sourcing of precious metals and at assisting companies’ efforts to comply with Section 1502 of the Act.

Earlier this year RJC released its Chain-of-Custody (CoC) standard, under which three gold refineries in the USA, Switzerland and Hong Kong have already been certified following independent auditing.

After reviewing the Section 1502 final rule, the RJC doesn’t anticipate any changes to the CoC standard will be necessary at this time.

The Section 1502 rule explicitly recognises the OECD Supplement on Gold as an internationally recognised due diligence framework for fulfilling Dodd-Frank conflict mineral requirements. RJC’s CoC standard is aligned with the OECD Guidance and the RJC has recorded webinars available on its website to assist supply chain participants with information and awareness-raising about the OECD Guidance.

Analysis of the Section 1502 rule shows that the types of gold (mined; recycled and scrap; and existing stocks) sourced by companies have specific disclosure and due diligence implications, each of which can be met though use of RJC’s CoC standard. All gold transferred by RJC CoC Certified Entities is ‘DRC conflict-free’ as defined by the Dodd-Frank Act.

To support ‘reasonable country of origin inquiries’, information on whether gold-bearing shipments contain mined; recycled; and/or existing stocks is provided to customers of RJC CoC Certified businesses via CoC Transfer Documents. If any gold originated in, or was transported through, the DRC and adjoining countries, all CoC Transfer Documents for that gold must continue to identify the country or countries of origin, along with the refiner/s. A conflict-free declaration is provided which assures customers that due diligence in accordance with the OECD Guidance has already been carried out to confirm that the gold did not finance or benefit illegal armed groups.

Under the Section 1502 rule, existing stocks and inventories of gold are considered ‘outside of the supply chain’ before 31 January 2013, and are exempted from its application. RJC’s CoC standard adopts the same cut-off date as the OECD Supplement on Gold – 1 January 2012.

RJC believes that, in essence, the 13-month difference shouldn’t be too difficult for companies to manage, for companies sourcing gold between the dates under the RJC CoC standard will have their receipt of CoC Gold reliably represented by CoC Transfer.