On Sunday, President Joseph R. Biden, along with the other members of the Group of Seven (G-7), announced a collective ban on the import of Russian gold at the 48th annual G-7 summit in Schloss Elmau, Germany. Russia is generally considered the world’s second largest gold producer.
The G-7 consists of the United States, Canada, France, Germany, Italy, Japan, and the United Kingdom.
On Tuesday, the U.S. Treasury prohibited the import of Russian Federation–origin gold into the United States “with immediate effect,” unless licensed or otherwise authorized by the Office of Foreign Assets Control (OFAC). The edict specifically excludes Russian gold that was purchased prior to Tuesday.
As with diamonds, gold that is “substantially transformed” in another country is currently exempt from the export ban.
Sara Yood, deputy general counsel of the Jewelers Vigilance Committee, says the new prohibition is mostly aimed at imports of raw gold of known Russian origin, as well as direct dealings with Russian gold companies.
Given that gold is notoriously hard to track, it’s not clear whether the rule applies to raw gold where the provenance is uncertain or came from Russia without the importer knowing it.
“[Government agencies] haven’t said anything about that issue,” says Yood.
Still, OFAC’s statement warns “U.S.persons to be vigilant about attempts to circumvent OFAC regulations through gold-related transactions.”
Yood offers two tips for the industry to comply with the new rule.
– Jewelers and manufacturers should talk to any overseas suppliers and have them commit to not selling any Russian gold or products known to contain Russian gold.
– Check the London Bullion Market Association’s (LBMA) Good Delivery List for a list of vetted bullion suppliers that adhere to the LBMA’s responsible sourcing program.
Yood adds the ban will be easier to enforce now that the entire G-7 is on board.
“Considering the amount of gold that comes through Italy, that definitely helps,” she says, adding that many in the industry support this rule.
“Russia has a huge stockpile of gold and diamonds. There’s been lots of concern that it will start selling its gold to finance its war effort.”
In a tweet, President Biden called Russian gold “a major export that rakes in tens of billions of dollars for Russia.”
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