Back to Ganoksin | FAQ | Contact

Only public companies face conflict gold regs


#1

Here is an article I thought everyone might be interested in. JVC:
Only public companies face conflict gold regs

http://tinyurl.com/3ya8ot7

As an attorney, I also realize that until the regulations are
written, which is the real power under a new law, no one knows how it
will be applied.

Rick

JVC: Only public companies face conflict gold regs
July 22, 2010

Washington–As the Wall Street bill became law Wednesday in
Washington, D.C., the New York-based Jewelers Vigilance Committee
(JVC) issued a statement indicating that only public jewelry
companies would be impacted by the law’s “conflict gold” provisions.

President Obama has signed into law the “Dodd Frank Wall Street
Reform and Consumer Protection Act,” legislation designed to
overhaul the nation’s financial regulatory system that contains an
addendum affecting the jewelry industry.

According to the JVC, the provision of the bill addressing “conflict
minerals”–gold, coltan, cassiterite and wolframite mined in the
Democratic Republic of Congo (DRC) and nine neighboring
countries–requires disclosure to the Securities and Exchange
Commission (SEC) as to the source of gold and other materials used
in manufacturing processes. But this new mandate, designed to keep
conflict gold out of the United States, applies only to publicly
traded manufacturers, not retailers, as previously reported,
according to JVC, which serves as the legal watchdog organization
for the jewelry industry.

“While the regulations implementing the bill are yet to be drafted,
only companies traded on a U.S. stock exchange will be implicated by
the legislation and required to file reports on gold sourcing with
the SEC,” the release states.

Jewelers of America (JA) sounded an alarm about the hastily added
provision to the Wall Street bill last week, stating that if the
conflict gold provision passed as part of the proposed legislation,
it would be a “nightmare” for the jewelry industry.

When asked on Thursday to respond to the JVC’s claim, JA issued a
statement noting that it had obtained "more detailed
which clarifies that the bill applies to public companies that use
gold or other minerals from the DRC or surrounding countries in the
manufacture of their products. But that doesn’t mean publicly traded
retailers won’t get roped into the requirements in the future, JA
adds.

“We believe that once the regulations have been promulgated by the
U.S. Securities and Exchange Commission, that they could apply to
any publicly-traded company involved in the manufacture of jewelry,
including major retailers,” the statement read.

The organization also notes that while it strongly believes in the
goal of the bill–to keep conflict gold out of the United States–JA
is concerned that as it is written now, the bill could encourage
jewelry companies to avoid in trading in gold from this area of
Africa.

“Of course, this unintended consequence will help no one, and end up
hurting legitimate miners and their communities,” the statement
read. “Jewelers of America remains fully committed to responsible
sourcing of gold and other minerals that make their way into jewelry
products.”

Publicly traded gold manufacturers will have to file reports
annually with the SEC, disclosing whether gold used in their
products originated in any of the 10 designated countries, the JVC
says. If a company does source from those companies, it must provide
on the steps it took to ensure the gold did not benefit
armed groups.

According to the JVC, the Conference Report accompanying the
legislation makes clear that disclosure to the SEC on the issue of
conflict minerals is only required of those companies that are
"otherwise required to file with the SEC." One of the original
co-sponsors of the provision, U.S. Sen. Russ Feingold, states on his
Web site that the provision applies only to “companies on the U.S.
stock exchange for which these minerals constitute a necessary part
of a product they manufacture.”

The JVC also notes that, as written, publicly traded manufacturers
covered by the legislation will need to determine whether gold in
their existing inventory originated in the DRC.

This story has been updated to include a newer statement from
Jewelers of America.