How Illicit Metals Get Into the Jewelry Supply Chain—And How David H. Fell Works to Keep Them Out
In addition to addressing the environmental and humanitarian concerns outlined here, David H. Fell & Co. also has an interest in keeping illegal metals out of our supply chain. One needs to look no further than current events to understand why this is so important. To finance their invasion of Ukraine, Russia acquired vast reserves of gold. But as the G7 nations have banned the trade of Russian gold, Russia will have to turn to illegal markets to offload this supply. This will cause obvious problems for those in the jewelry industry (and any industry that uses precious metals) who do not want their work to fund violence or criminal activity around the world.
It’s not just Russia moving gold for nefarious purposes. The United States recently placed sanctions on a gold refiner based in the Democratic Republic of the Congo for sourcing gold from regions controlled by armed groups that, among other activities, impose illegal taxes on the local populace and work with smugglers. The refiner in question had been arrested in his home country of Belgium for laundering money through the gold trade. Needless to say, we want to make sure we are not working with gold from such sources.
Gold in particular is useful for any organization or government looking to launder money or make under-the-table transactions. Trading in gold allows them to avoid electronic networks, and there is no currency trading hands that could be traced. The illicit metal trade, especially in Latin America, often goes hand-in-hand with other illicit trafficking activities, from wildlife to drugs to human beings. The problem for us—and for anyone in the precious metals business—is that we could be unwittingly funding these illegal activities by allowing illicit metals to enter our supply chain. The industry needs some way to ensure that the metal we buy and sell is not bringing greater harm to the world.
There is a number of ways that illicit metals enter the supply chain, and it often has to do with law enforcement deficiencies and a lack of organizational transparency at different points in the supply chain, from mining to exporting to refining as metals make their way from one country to another, from one company to another. If governments and organizations in the supply chain upstream from us are unable to verify the source of their metals, each of us in the industry must take on that responsibility ourselves.
We’ve taken on that responsibility by partnering with SCS Global Services, experts in environmental and sustainability standards, to independently verify our recycled metals. Achieving SCS Recycled Standard V7-0 certification not only gives our customers the assurance that the metal we claim is recycled actually is recycled, but it also confirms that our recycled metals did not originate from an illegal mine, was not smuggled across borders, and did not otherwise enter our supply chain illegally.
This knowledge is possible because part of achieving SCS Recycled Content Standard V7-0 is a supply chain audit. This means that an independent auditor looks at our chain of custody procedures to determine the source of our recycled material. We’re proud to do business knowing that our business activities are not contributing to the humanitarian and environmental crises exacerbated by the illicit metals trade and that our recycled metals come from legitimate sources.