Gold traders worry about Circular 22

Tuesday, May 27, 2014 18:12

Circular 22, effected in June 1, will bring more regulations to strengthen the gold jewelry management in Viet Nam.— Photo

HA NOI (Biz Hub) — Concern has spread amongst jewellery traders just five days before Viet Nam is due to apply its first quality management system for domestic gold jewellery.

In September 2013, the Ministry of Science and Technology (MoST) issued Circular 22, which takes effect in June 2014, regulating management and measurement policies in the gold trading business. Under the circular, the standards of quality and measurement of gold jewellery traded in the local market must be written as the product code with the correct gold content.

According to the circular, at least 75 per cent of 18-karat gold jewellery must be pure gold, while a minimum of 99.9 per cent pure gold is applied to 24-karat jewellery. Local media reported that due to the long-term lack of control in management, most of the 18-karat jewellery in the local market was only 58-68 per cent gold. According to Nguyen Hoang Linh, a leader from the Directorate for Standards, Metrology and Quality, said many people pay a lot for gold jewellery, which they believed had a high gold content, but when they re-sold these items, they received very little money and found that the gold content was much lower than they'd expected.

While the circular was considered to manage quality adequately, traders believed that the time from the circular's date of issuance to the date it goes into effect was too short for them to prepare and manage their inventory. After nine months, these concerns have spread to over 12,000 traders in Viet Nam as the date of the circular going into effect draws nearer because most of their products were made without a code to indicate gold content.

Ly Hai Son, owner of a jewellery trading site in HCM City, told VTV Online that he knew about the circular and the deadline, but he had not yet done anything about it; he was worried and hoped for a change. The owner said he could not remake nearly 1,000 items to meet the requirement of the new regulations because doing so would cost a lot and may even ruin his business.

Son is one of thousands of gold traders and producers across the country. Under the new regulation, many of them will face either losses or sanctions.

According to the Viet Nam Gold Trading Association (VGTA), previously, companies and businesses made their own declarations on product quality, with an error margin of 1-3 per cent, whereas the circular only allows an error margin of 0.1- 0.3 per cent.

VGTA deputy chairman Dinh Nho Bang told Biz Hub that if the circular is not revised, it will cause huge losses to not only traders but also to millions of buyers in the country who hold gold as a method of saving.

Bang has asked the MoST not to apply the regulations to products that were made before June 1.

On May 27, the VGTA also sent a letter containing 10 petitions related to the circular to both the MoST and the Directorate for Standards, Metrology and Quality, hoping that the circular will be revised to better serve the trading community.—VNS

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