The LBMA has questioned six Russian gold refiners about their ties to sanctioned entities

The London Bullion Market Association (LBMA) has asked six accredited Russian gold refiners to explain whether they have any business dealings with sanctioned Russian organizations. The proposal comes after the group terminated the membership of three sanctioned Russian banks a few days ago.

Accreditation by the LBMA

Six Russian gold refiners on the London Bullion Market Association’s (LBMA) good delivery list have been asked to clarify if they have any economic ties to sanctioned organizations. According to a report, if such ties exist, the refiners’ accreditation status with the LBMA will be jeopardized.

According to a Reuters report, JSC Krastsvetmet, JSC Novosibirsk Refinery, JSC Uralelectromed, Moscow Special Alloys Processing Plant, Prioksky Plant of Non-Ferrous Metals, and Shyolkovsky Factory of Secondary Precious Metals are among the six accredited Russian refiners on the LBMA’s “good delivery” list.

The refiners’ move comes exactly a week after the organization revoked the membership of three Russian banks, VTB, Sovkombank, and Otkritie, after they were added to the list of sanctioned entities.

The LBMA’s general counsel, Sakhila Mirza, is mentioned in the newspaper as explaining why the refiners are now being asked to confirm if they have ties to sanctioned businesses.

“The rules for good delivery are pretty obvious. “We’ve requested that our rules be followed,” Mirza added.

The List of Good Deliveries

The London Bullion Market Association (LBMA), which “owns” the good delivery list, only accredits refiners whose gold bars meet its stringent requirements for trading on the global OTC (over-the-counter) market. According to the LBMA, its accreditation serves as a “de facto standard” for gold industry participants.

The loss of the LBMA accreditation prevents Russian refiners from accessing the Loco London Market, where “precious metals are traded directly between two parties without the intervention of an exchange,” according to the organization. Reuters reports that several traders and bankers believe the Russian refiners’ withdrawal from the LBMA market will have little influence on the market.

They go on to say that even if the LBMA kicks refiners out, the precious metal will still find consumers in China and the Middle East. When a refiner’s accreditation is revoked, however, the precious metal produced while the certification was active will remain in the London market, according to the article.

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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