Physical gold supply (Valcambi and conflict gold)

Industry associations are calling on Switzerland’s largest gold refinery to clarify the origins of its gold purchased from Dubai traders.

This content was published on August 16, 2020 - 17:06 August 16, 2020 - 17:06

According to the German-language paper SonntagsZeitung, a rift has emerged between the Swiss Association of Traders and Manufacturers of Precious Metals and the Ticino based refinery Valcambi.

The row concerns a report by the NGO Swissaid released in July, which alleges that Valcambi is sourcing gold from dubious sources in Dubai. The refinery’s purchases from the Kaloti Group are particularly concerning because of alleged links to gold from conflict regions in Africa.

Although the association doesn’t name a specific company, Cédric Léger, the CEO of the association, leaves little doubt.

"The association asked for clarification of the situation by letter," said Léger. “And only an answer that removes all doubts about wrongdoing is acceptable from our point of view. A simple denial is not enough for us."

In the letter sent on July 31, Léger asks Valcambi CEO Michael Mesaric to confirm or refute the allegations and also explain what corrective measures it will take if necessary.

Mesaric confirmed to SonntagsZeitung that the company received the letter but rejected the allegations.

The United Arab Emirates is now the most important country of origin of Swiss gold imports. Some 40% of the world’s gold now makes its way through Dubai. According to Swissaid, half of that is from Africa and much of it is mined illegally.

"It cannot be ruled out that the gold from Dubai is of dubious or potentially illegal origin or comes from regions that are higher risk," warns association president Léger. Another Swiss refinery Metalor decided several years ago to no longer process gold from Dubai.
...

Click to expand...

Chief executive Michael Mesaric said the claims by the non-governmental organisation Swissaid were unfounded.

In a report published earlier this year, Swissaid accused Valcambi of buying gold from the company Kaloti in Dubai, which allegedly imported the precious metal illegally from mines in conflict-stricken areas on the African continent.

“These allegations are wrong,” Mesaric told the French-language daily Le Temps in Lausanne.

He said Valcambi had been cleared of any wrongdoing in two audits by the LBMA – the London Bullion Market Association, the global authority on precious metals – over the past two years.

“We have been transparent about the origins of the gold deliveries, be it with the Swiss customs authorities or with the LBMA.”

Mesaric added that Valcambi had also given all the information required by the Swiss precious metal industry.

He did not confirm or deny whether Valcambi is still doing business with Kaloti.
...

Click to expand...

September 15, 2023

LBMA, the independent authority for precious metals, has launched a Request for Proposal for a digital ecosystem that will provide trust and confidence to support the integrity of the market and the gold that underlies it.

The move, which follows last year’s Gold Bar Integrity initiative, in concert with the World Gold Council, invites selected service providers to present solutions designed to establish a secure, efficient information-sharing framework. The new database will address challenges within the gold value chain, and strengthen the assurance to end-users, investors, banks, and other stakeholders of the integrity of the metal they trade or buy. This underscores LBMA’s commitment to setting industry standards based on transparency and responsible sourcing.

“Our goal is to establish an efficient platform combining information about the sources of LBMA Good Delivery metal, refinery production, vault holdings, and other key intelligence all within the context of enhanced standards for responsible and sustainable sourcing,” said Ruth Crowell, CEO, LBMA.

“Working with the 100+ LBMA accredited refiners, Banks, Traders and other groups, we aim to build a resource able swiftly to provide coordinated data, thus to increase the efficiency of LBMA's investigative processes and our ability to provide timely responses to enquiries from the precious metals community,” she continued.

Formal responses to the RFP are required by the end of September.
...

Click to expand...

...
Switzerland’s highest court ruled that the Federal Office of Customs and Border Security is not entitled to provide the Bern-based Society for Threatened Peoples (STP) with information concerning gold imports by Swiss companies. The ruling confirmed an earlier decision by the Federal Administrative Court.

“The disputed information is covered by the tax secrecy imposed by the VAT law and is therefore excluded from the right to obtain information under the Transparency Act,” the court said in a press release published after the public hearing held in Lausanne.
...
“It was hard to understand,” he told SWI swissinfo.ch. “They argued this on tax secrecy. We never asked for any money or transfer values. It was just quantities of gold and the name of the commerce… We are very disappointed even though we expected it because the pressure of the economic sector was very high. They did not want to have any transparency.”

He said the NGO would continue to put pressure directly on Swiss refineries to declare where their gold is coming from. ...

STP is part of a vocal cluster of Swiss NGOs, experts and academics calling for greater transparency in the gold trade. ...

Click to expand...