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Presentation on Hallmarking Scheme for Gold by Parminder Bajaj, Scientist F & Head Hallmarking Bureau of Indian St

Presentation on Hallmarking Scheme for Gold by Parminder Bajaj, Scientist F & Head Hallmarking Bureau of Indian Standards 28 July 2007 3 rd International Gold Summit, N.Delhi Gold Consumption – Key Markets & Indian Scenario Annual Gold Consumption in key markets (in Tonnes):

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Presentation on Hallmarking Scheme for Gold by Parminder Bajaj, Scientist F & Head Hallmarking Bureau of Indian St

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  1. Presentation on Hallmarking Scheme for GoldbyParminder Bajaj, Scientist F & Head HallmarkingBureau of Indian Standards 28 July 2007 3rd International Gold Summit, N.Delhi

  2. Gold Consumption – Key Markets & Indian Scenario Annual Gold Consumption in key markets (in Tonnes): China – 552, USA – 405, Middle East – 408, Turkey – 260, Saudi Arabia – 165, U.A.E – 115, U.K – 72 Annual Gold Consumption in India -800 Tonnes • For Jewellery - 80% • For investment - 15% • Industrial use - 5% Jewellery Industry Profile in India (Estimated) • Jewellers/Retailers/Manufacturers > 3,00,000 • Large scale units 100

  3. Need to Regulate Quality • High Gold Consumption in India • Low Purity Index • Ensuring Value for money for consumer • Providing third party assurance on purity for consumers

  4. Market Survey All India Average 2001 2006 (120 Samples in 8 Cities) (162 samples in 16 cities) • Samples Failing 89 % 90 % • Average shortage in purity 11% 13.5% • Highest Purity Shortage 38.6% 44.66% 2001 – Delhi,Mumbai, Chennai, Hyderabad, Jaipur, Bangalore, Ahmedabad & Kolkata 2006 -New Delhi, Gurgaon, Kanpur, Meerut, Ludhiana, Chandigarh, Jammu, Jaipur, Jodhpur, Indore, Thiruvananthapuram, Madurai, Pune, Vadodara, Bhubaneshwar, Ranchi,

  5. What is Hallmarking • Hallmarking - The accurate determination and official recording of the proportionate content of precious metal . • Hallmarks - Official marks used in many countries as an assurance of purity or fineness of precious metal

  6. Launch of Hallmarking Scheme in India • BIS launched Hallmarking Scheme in April 2000 for Gold Jewellery • Gold Medallions were covered in Sept. 2005 • Jewellery & Artefacts of Silver were covered in Oct. 2005

  7. Objectives of Hallmarking Scheme • To protect consumer against the purchase of gold jewellery with lesser than declared purity • Develop export competitiveness • Make India as a leading gold market in the world

  8. BIS Hallmarking Scheme The scheme, voluntary at present is operated as Third Party Certification Scheme and involves : • Certification of Jeweller (retailer)/ Jewellery manufacturer through grant of licence • Recognition of Assaying and Hallmarking Centre according to BIS prescribed criteria • The scheme is for : • Gold Jewellery/Artefacts (Medallions) • Silver Jewellery/Artefacts

  9. Certification of Jeweller • As per IS 1417: 1999 Gold and Gold alloys, Jewellery / Artefacts – fineness and marking - specification (aligned with ISO 9202:1991) • Doc: STI/1417/4 Scheme for Certification of Gold

  10. Grades of Gold Covered in IS 1417 & ISO 9202 IS 1417 ISO 9202 Fineness Fineness 995 Standard Gold (for medallions) 958 23 Carat } 916 22 carat } 916 875 21 Carat } Gold for 750 18 Carat } Jewellery and 750 585 14 Carat } artefacts 585 375 9 Carat } 375 No Negative Tolerance Permitted on Fineness/Purity

  11. IS 1417:1999 Requirements • Gold alloy including solders for manufacturing jewellery/artefacts shall be free from cadmium, iridium & ruthenium • Solders used shall be of same fineness as that of jewellery/artefact except 23 carat jewellery/artefact • IS 3095 :1999 Gold solders for use in manufacture of jewellery- Specification (first revision) • IS 2790:1999 Guidelines for manufacture of 23,22,21,18,14 and 9 carat gold (first revision)

  12. IS 1417:1999 Requirements • Gold jewellery/artefacts which may not be Hallmarked are those: • fail to comply with specified fineness/caratage. • which is not solid or which is made with a hollow center and then filled with base metal, cement, lac or other foreign substance thereby giving the article a false or added weight or strength unless the weight of gold is indicated on the article along with the jeweller’s/ sponsorer’s logo. • Gold article/ornament on which it is physically impossible to stamp the marks.

  13. Components of BIS Hallmark • BIS Hallmark • Purity /Fineness Mark 916 • Centre’s Mark (example) MMTC • Jeweller’s Mark (example) TBZ • Code Letter for the Year of Marking H for 2007

  14. Display Requirements in the Shop • Hallmarked Jewellery / Artefactsavailable here. • BIS Licence Number. CM/L- • Hallmark illustration and definition of each component BIS LOGO PURITY • The relationship of fineness of gold jewellery with caratage as specified in IS 1417 958 = 23 C 916 = 22 C 875 = 21 C 750 = 18 C 585 = 14 C 375 = 9 C • Magnifying glass (at least 10X magnification) for viewing hallmark available • Complete name and address

  15. Recognition of Assaying and Hallmarking Centre • Based on Criteria for Recognition of Assaying and Hallmarking Centres HMS /RAHC/G01- January 2001 for Gold (at par with Vienna Convention requirements) • Assaying of Gold - According to IS 1418 (aligned with ISO 11426) & • Centres to obtain Accreditation as per ISO/IEC 17025 from NABL

  16. Steps in Assaying and Hallmarking • Receipt of Jewellery and its segregation article wise • Checking for homogeneity of the lot by XRF • Sampling by Scraping/ Micro Drilling/ Cutting etc. • Assaying of the composite sample as per IS 1418 byFire Assay Method • In case the sample passes , entire Jewellery lot is hallmarked by laser marking and returned to the Jeweller • In case of failure in fire assay, Jewellery is returned back without hallmarking

  17. Fee Structure • Application-cum-Processing Fee : Rs.2000/- • Certification Fee (As applicable) : • Rs. 25000/- for a period of 3 years for location in Metropolis (Delhi, Mumbai, Kolkata & Chennai) • Rs. 20000/- for a period of 3 years for location in State/District Head Quarters • Rs. 10000/- for a period of 3 years for location in other than Metropolis & District Head quarters • Second licence in the same premises - no additional certification fees. • 25% discount for Multi-Chain outlets • Renewal Application-cum-Processing Fee : Rs.1000/- • Taxes applicable 12.36% as service tax & education cess

  18. Hallmarking Charges • Hallmarking charges depending upon weight of article is payable by jeweller to the hallmarking centres Wt. of Article (for Gold) Charges/article Upto 20 gm Rs. 18 From 20 – 100 gms Rs. 50 Above 100 gms Rs.100 Minimum charges for a consignment shall be Rs. 300/-

  19. Consumer Protection • Consumers can get hallmarked jewellery tested from any A&H Centre If found lesser than marked purity -Testing charges to be refunded to jeweller who hallmarked Jewellery -Jeweller obliged to satisfy the customer through replacement

  20. Initiatives by Govt. • Central Scheme for Setting up of A&H Centres in 35 select districts with one time Financial Assistance @15% of Cost of Machinery & Equipment subject to maximum of 15 lakhs per centre • Effective Consumer Awareness Campaign thru’ Print & Electronic Media • RBI Circular to Banks for Preferential treatment to Hallmarked Jewellery while granting Advances against Jewellery – November 2005 • Letter to Chief Secretaries of States/UTs for promotion of Scheme • Mandatory Hallmarking w.e.f. 1 January 2008

  21. Initiatives by BIS • Regular Awareness Programmes for the Stakeholders across the country • A film on hallmarking for projection during consumer awareness programmes • Simplification & Rationalization of BIS Hallmarking scheme • Formulation of Hallmarking Regulations for legal back up

  22. Simplification & Rationalization of Hallmarking Scheme

  23. Progress of Gold Hallmarking Scheme since launch in April 2000 Licences granted for Silver since launch = 298

  24. Region - wise Distribution Region Licences Centres Gold Articles Gold ( Silver) Hallmarked (in lakhs) (As on 25 July 2007) (As on 30 June 2007) Central 551 (87) 11 18.21 Northern 298 (56) 1 - Eastern 670 (19) 3 35.34 Western 1386 (89) 13 77.45 Southern 1201 (47) 27 123.65 Total 4106 (298) 55 254.66

  25. Statewise No. of Licences for Gold(Silver)and A&H Centres STATES WITH NO LICENCE : SIKKIM, ARUNACHAL PRADESH, NAGALAND, MANIPUR, MIZORAM, MEGHALAYA, DADRA NAGAR HAVELLI, LAKSHADWEEP, ANDAMAN & NICOBAR

  26. Impact of Initiatives

  27. International Accreditation • Vienna Convention, 1972 - Convention on The Control And Marking of Articles of Precious Metals – Hallmarking Convention • 18 Member Countries : Austria, Finland, Norway, Portugal, Sweden, Switzerland and the United Kingdom, Denmark, Ireland, Israel, The Czech Republic, The Netherlands, Latvia, Lithuania and Poland, Hungary, Cyprus, Slovak Republic • In the process of acceding :Sloveniaand the Ukraine • Others interested countries : Bahrain, China, India, United Arab Emirates, Uzbekistan

  28. Role and Functions of the Hallmarking Convention • Objective of the Hallmarking Convention : • Facilitate trade in precious metal articles • Maintaining fair trade and consumer protection justified by the particular nature of these articles. • For that purpose, the Hallmarking Convention has introduced the first international hallmark – the Common Control Mark (CCM) – indicating the precious metal and its fineness.

  29. Requirements of Vienna Convention, 1972 • Country to be member of UN or similar body • National Hallmarking scheme • Appropriate legislation on hallmarking • Independent assaying centres which meet the requirements of ISO/IEC 17025 (NABL Accreditation) • For further details of the convention please visitwww.hallmarkingconvention.org

  30. International Accreditation-Indian Status • Indian is No. 1 based on production of gold jewellery of 539 tonne in 2005 followed by Italy of 228 tonne • Indian Export of Gold Jewellery during 2005 – Rs. 171.12 billion & expected to be at similar level in 2006-07 • India as major player in Gem & Jewellery exports is considering joining Vienna Convention for easy access to European markets and enhanced image of Indian Jewellery • The existing infrastructure of certification is technically at par with the Convention Requirements • Adequate experience of jewellery certification available • Setting up of Independent assaying centre/referral lab and separate Hallmarking Regulations is under process • Participation in Vienna Convention meetings

  31. Emerging Trends & Challenges Ahead • Implementation of Mandatory Hallmarking for Gold Jewellery from 1 January 2008 as decided by Govt. of India involving: • Setting up of large No. of A&H Centres • Innovative Licensing Mechanism for Over 3 lakh Jewellers • Regulatory Mechanism including Surveillance • Requirement of Infrastructure & Manpower for BIS • Involvement of State Govts. etc. in co-operation with the Major Stakeholders • Training of Artisans and Jewellers • Stepping Up of Awareness / Publicity Efforts during 2006 & 2007 • Boosting Exports of Gold Jewellery • Becoming Member of the Vienna Convention

  32. Contact Details Head (Hallmarking Department) Bureau of Indian Standards 9, Bahadur Shah Zafar Marg New Delhi Phone : 011-23234223 E mail :cmd4@bis.org.in Website :www.bis.org.in

  33. Thanks for the Attention

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