HomeMarketsGoldLBMC Issues Strict Guidelines to Address Conflict Producers of Gold

LBMC Issues Strict Guidelines to Address Conflict Producers of Gold

Big changes are coming to the gold industry. Conflict producers of precious metals will soon find themselves blacklisted by the biggest gold market authority. This should help put to rest any concerns regarding the origins of these metals once and for all. 

A Tougher Time for Conflict Producers

Over the past few years, there have been multiple incidents involving conflict producers of gold and other precious metals. So far, little has been done to counter this problem, as it is a very tough problem to address. That may soon come to change, as the London Bullion Market Association is introducing new standards.

As part of the new rules, all gold entering the mainstream market must be fully regulated and meet strict standards. Failure to do so will prevent that bullion from entering the market altogether. This may usher in big changes for regions such as the United Arab Emirates, who have a slightly colorful history on this front. 

All countries with large gold markets have been put on notice by the LBMA. The standards to be met include money laundering checks, gold sourcing, and so forth. Any metal not meeting these requirements will be automatically blacklisted. For conflict producers, that is very bad news, as they will no longer be able to freely move bullion as they see fit. For the broader industry, this is a crucial change that should have been introduced years ago. 

It is the first time any authority tries to curb the illegal or unethical production and trading of bullion. Conflict producers have had free reign for far too long, and the situation has gotten out of hand. Collaborating with key markets to ensure these new rules can be enforced will be a tall order. A bigger challenge ensues when it comes to enforcing these new rules and taking appropriate action if guidelines aren’t met in full. 

No one is Called out yet

Contrary to what some people may have expected, the LBMA is not calling out any specific nation at this time. However, the letter is addressed to all major gold producers, including China, Russia, South Africa, Turkey, and the US. Whether the new rules will be put into effect immediately, remains unclear. Weeding out the conflict producers is not something to be completed overnight. 

One interesting part of the letter reads:

“A lack of cooperation or unwillingness to publicly commit to these standards and share a proposed timeline with the LBMA will mean LBMA may no longer permit GDL Refiners to source material which has originated from or passed through the International Bullion Centre.”

Given how billions of dollars in bullion were smuggled to Dubai from Africa, this move was a matter of time. Unlike the other countries, Africa – except for South Africa – has no direct access to the international gold market. Once this illicit gold entered the UAE, it was ready for distribution on the market. Situations like that need to be avoided in the future. 

The post LBMC Issues Strict Guidelines to Address Conflict Producers of Gold appeared first on Vaultoro, buy gold with bitcoin.



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