Does the gold you buy help finance Russia’s war against Ukraine? The jewelry industry is likely to be exploited if the Russian government uses gold supply chains as a tool to evade sanctions and further subsidize its military aggression against Ukraine. It is imperative that we work together to prevent this from happening.
As unprecedented financial sanctions against Russia prevent it from accessing most of its assets, Russia is likely to turn to liquidating its 2,300 metric tons of gold reserves or using them for barter and trade. This may already be the case, as the Bank of Russia has resumed buying domestic gold for the first time in two years and reports indicate an increase in Russian gold buying activity in Venezuela. since the start of the war against Ukraine. Russia has been quietly building up its gold reserves since 2012. According to the Financial Times (3/3/2022), Russia’s stock of gold is around $142 billion, roughly equivalent to GDP from Algeria. They also have reserves of 650 million carats of diamonds, unsubstantiated reserve values of platinum group metals, silver and rare earth metals, and are a world leader in gold mining, diamond, platinum group and rare earth metals.
Russia is likely to push its gold through jewelry supply chains, as the jewelry industry accounts for 36.8% of global gold demand, second only to gold used for investment (46.64% of world gold demand). Russia is also the third largest gold producer in the world.
We call on all global jewelery industry organizations to be vigilant. Check your gold sources. Contact your refiners and suppliers and tell them you expect them to verify their gold sources. Make it clear to your supply chain partners that you will not tolerate suppliers who help Russia by buying its gold or using it in trade.
Work to identify the highest risk jewelry supply chains is ongoing, but the jewelry industry in some countries deserves increased attention. Major jewelry trading nations, including China, India and the United Arab Emirates (UAE), abstained from voting on the United Nations Security Council resolution condemning Russia’s invasion of Ukraine ( although the UAE later voted in the UN General Assembly to condemn the invasion). Turkey has announced that it does not intend to join the sanctions. The reasons for these decisions are complicated and should not be interpreted as support for Russian military aggression. But since these are major jewelry producing and trading countries, it is important to let suppliers in these regions know that you expect gold sources to be well documented and not purchased from Russia after the February 24, 2022.
Jewelry companies engaged in production and trade with companies located in countries that have refrained from censoring Russia or do not support sanctions should also consult their council on how best to protect themselves in the event of further sanctions. anticipated affecting countries that abstain or do not support. All jewelers should ensure that they have an active anti-money laundering (AML) program with a rigorous know-your-counterparty (KYC) practice. It has never been more important to exercise due diligence and keep meticulous documentation of gold and diamond purchases.
Jewelry companies must purchase gold supplies from companies that have voluntarily submitted to formal supply chain standards. This includes buying from companies that have certification standards (like RMAP, LBMA, RJC*, IRMA**, Fairmined, or Fairtrade) or assurances (like Code CRAFT) in place. Companies that have adopted one or more of these voluntary certification standards have reviewed their operations and are subject to third-party audits.
The violation of Ukraine’s sovereignty and the senseless bloodshed of its people are unacceptable. All human rights abuses – past and present – associated with the extraction and sale of metals and minerals are also unacceptable. Right now, the world has come together more powerfully than at any time since the 1940s to oppose state-sponsored human rights abuses. So let’s use this moment to dedicate the jewelry industry to peace, human rights for all, and a safer world by vigilantly monitoring supply chains and raising the bar for transparency. supply chain.
— The Global Gold Transparency Initiative
*THERE ARE CONCERNS WITH RJC ABOUT ITS RELATIONSHIP WITH RUSSIAN DIAMOND MINING CORPORATION ALROSA. WE CONTINUE TO MONITOR THE SITUATION. COMPANIES THAT HAVE ADOPTED ONE OR MORE OF THESE VOLUNTARY CERTIFICATION STANDARDS HAVE REVIEWED THEIR OPERATIONS AND ARE SUBJECT TO THIRD-PARTY AUDITS.
** NO MINE IN RUSSIA HAS BEEN INDEPENDENTLY VERIFIED BY IRMA AT THIS TIME. JEWELRY BUYERS SHOULD BE AWARE THAT ANY MATERIAL TO THE CONTRARY IS FALSE.