Articles and News

Washington, DC--The turn of 2011 means more for jewelers than just a fresh balance sheet. Three new laws have gone into effect that require jewelry industry compliance: 1) The FTC has issued its final guidelines for marketing platinum; 2) the FTC’s Red Flags Rule became final in December, and 3) new laws pertaining to conflict minerals will require disclosure of gold sourcing.

The Centurion reported on the new platinum guidelines in its December 28 edition. The new guidelines require makers of platinum/base alloy metals (containing less than 85% platinum) to fully disclose the other metal content.

The FTC’s Red Flags Rule applies to all companies that offer in-house financing to consumers or that offer a branded credit card to consumers. They must institute a program that acts to detect and prevent identity theft in connection with those credit arrangements, says Cecilia Gardner, CEO of the Jewelers’ Vigilance Committee. JVC has created a kit and offers services to assist those retailers who are affected by this rule. Contact Jo-Ann Sperano, (212) 997-2002, ext. 101, or email joann@jvclegal.org.

Conflict minerals:  When Congress passed the Wall Street Reform Act, embedded in it was a provision to require issuers to disclose whether or not the products they manufacture or contract to manufacture contain minerals that are sourced in the Democratic Republic of the Congo or adjoining countries, that may be used to fund armed conflict or human rights violations. Gold is one of the minerals covered under this law.

The SEC published proposed rules in December to implement the law, which would require public disclosures by issuers of the source of the gold used in their products. It requires the filers to perform a “reasonable country of origin inquiry” and further describe the products that incorporate minerals from the region.  Alternatively, if they are unable to make the determination, they are required to publicly disclose that fact and describe the efforts they undertook to try, even though they are unable to determine country of origin or the location of the mine that the mineral came from. 

The only entities that have to file are those who already file with the SEC. The wider impact on the industry, however, arises from the fact that in order for these entities to file they will have to have the required information from their supply chain as to the source of their gold—even if those need not themselves file, said Gardner.