recently added to the Dodd-Frank
Wall Street Reform and Consumer Protection Act could hurt users of
gold and other minerals. Jewelers of America alerted its members to the
issue yesterday in an email urging them to contact their local U.S. Senators and demand that the
provision—or the entire bill if the provision cannot be separated—be defeated.
Senators returned today to their offices from a summer break.
Section 1502 on
within H.R. 4173 aims to
ensure that minerals including gold, coltan, cassiterite and wolframite aren’t subsidizing conflict in
the Democratic Republic of Congo and nine surrounding countries (see
sidebar, “Countries Under Scrutiny”). But, details of the provision are such
that if implemented, gold users (suppliers, retailers, and manufacturers) would
be obligated to determine the source of all gold for the Securities
and Exchange Commission, as well as conduct third-party audits to validate the
reports. All information will have to be placed on firms’ Web sites for public
What legislators don’t realize is that gold in
the jewelry supply chain is co-mingled. “You usually don’t have the opportunity
to buy a bar of gold from a particular mine,” said Robert Headley, chief
operating officer, Jewelers of America, to JCK in a phone interview this
afternoon. Another problem: “Legislators are asking business to solve a
political problem, and while we fully support efforts to stop the trade in
conflict minerals, we don’t agree that this legislation is the right approach.”
An excerpt from
the JA plea is as follows:
This provision is meant to ensure
minerals aren’t subsidizing conflict in the Democratic Republic of Congo and
the nine countries (most of southern Africa) surrounding it – but it would put
an incredible burden on jewelry businesses if enacted, essentially requiring
suppliers to determine the source of ALL their gold inventory.
“It may happen that purchasers of gold will have
to avoid buying from the 10 countries in question all together,” adds Headley.
“Because the idea of certifying a particular region of any of those countries
as completely conflict free—as defined in the legislation—would appear to be
difficult to do.”
Finance Bill aims to prevent future economic meltdown in the U.S.
officials provided talking points about the legislation and a proposed letter
for jewelers to send to their Senate representatives on its Web site, where
jewelers can also obtain
their senators’ Washington office contact information.
Follow JCK on Twitter: @jckmagazine
Follow JCK on Facebook: @jckmagazine