Transparency in gold and jewelry management

(Baonghean) - Circular No. 22/2013/TT-BKHCN of the Ministry of Science and Technology regulating "Management of measurement in gold trading and management of quality of gold jewelry and fine arts circulating on the market" has been widely implemented throughout the country. However, after more than 5 months of implementation, in Nghe An, many businesses and stores have not yet complied with the regulations.

Effective from June 1, 2014, Circular 22 is considered a solution to protect consumers' rights. According to the circular, the activities of exporting, importing, producing and trading gold jewelry and fine art will have to comply with many strict regulations on measurement, quality standards and product content. Gold jewelry products for sale will have to be labeled with quality standards, origin, design, size and publicly listed. However, in reality, many products still do not have labels announcing standards, do not specifically state the name, address of the facility, gold age, symbol code; if attached, there is only a small piece of paper stating the weight and processing price, purchase price - sale price... Ms. Nguyen Thi Hien (a staff member of Cua Lo Post Office) has an 18K 6.5 gold ring that she has worn for a long time and wants to sell it to exchange for another model. But at Kim Thanh Huy gold shop (on Tran Phu street - Vinh city), after testing the gold's age and weighing the specific gravity, the gold shop owner said he could only buy it for 1,500,000 VND because the gold was bad; showing the sample, the shop owner said the 18K stamped ring should be equivalent to 7.5 years old but the assessment was only 5.5 years old. Also this product, brought to Tat Nam gold shop (on Tue Tinh street), the owner of this gold shop could only buy it for 1,350,000 VND "to remelt". Because she felt she was being forced to lower the price and did not want to sell it right away, Ms. Thao continued to bring the ring to another gold shop on Nguyen Sy Sach street, at this time the gold age was raised to 6 years old, but the purchase price was only 1,250,000 VND. “In the end, I still don’t know the real age of the ring I’m wearing. The ring is stamped 18K, but when sold, each place gives a different gold age, and the purchase price of the stores also differs significantly,” Ms. Le Thi Thao said indignantly.

Customers buy gold jewelry at Kim Thanh Huy gold shop (Vinh city).

Mr. Nguyen Hoang Nam, a goldsmith with more than 20 years of experience (on Cao Thang Street - Vinh City) shared information: “The age of gold jewelry on the market is often inaccurate, so gold from one store to another is often criticized as not old enough. Even if you buy and sell somewhere, with full invoices, customers still have to suffer losses on both sides of the transaction. The reason is that when buying, customers have to pay for the cost of setting stones and manufacturing costs, which is quite high. When selling, gold shops do not charge these fees, they just hold the item up to try it, weigh it, and then judge the price. If they agree, they sell it. According to the standard convention, 18K gold is 7.5 years old. With the naked eye, it is impossible to distinguish the age of gold because the processing units can plating it to make lower-aged gold look exactly like 18K gold. There are many reasons for gold not being old enough, including that the original raw gold may have been of poor quality; during the manufacturing process, many other metals are mixed in, which also contributes to reducing the age of the gold...”. Currently, the production of gold jewelry and fine arts depends on each enterprise, and does not follow the mandatory standard that products must have a gold content of 14k, 18k, 22k, 24k, while gold jewelry and fine arts are very diverse in designs and styles. Therefore, by applying different measurement methods, businesses can easily take advantage of this to make profits. Just by inflating the gold purity by 0.5%, consumers have already lost several hundred thousand VND per product. Meanwhile, most people who buy gold jewelry for use or as gifts often have to wait a long time before selling them and cannot assess the quality, so they are susceptible to gold purity fraud.

In fact, for many years, the market has had almost no common standards for gold jewelry products. In addition, most gold shops get their goods from wholesalers or process them themselves. Therefore, the gold age of the products is determined by the shop owners themselves. Implementing this regulation, some large enterprises such as Phu Nguyen Hai Gold and Silver Company, Kim Thanh Huy (in Vinh City), Nhu Trinh (in Dien Chau)... have basically labeled their products with standards and recorded the gold age on the products according to regulations; the application of the new regulations in the circular does not greatly affect business activities. However, most small-scale gold jewelry and handicraft businesses appear confused and have many concerns when applying the circular.

The owner of a gold and silver shop on Nguyen Sy Sach Street said: “If before, the error in gold content allowed for loss from 1 to 3%, now according to the regulations of the Circular, the error is only from 0.1% to 0.3%. Therefore, the shop has a large number of products with errors that do not meet the new regulations, and there is still no direction to resolve the remaining goods. Sellers like us have not yet fully "understood" the regulations of the circular, especially in determining the age of gold, buying suitable scales, and which suppliers are of good quality. On the other hand, according to the regulations, businesses must be equipped with a scale with 4 odd numbers (determining the weight of gold with the machine's reading ability up to 0.0001g) which is not really reasonable. Because the average difference of 1 tael of jewelry gold with 75% content (18K gold costs about 2.4 million VND), when using a scale with 3 odd numbers (the machine's reading ability is 0.001g) and 4 decimal places, the difference between 0.001g and 0.0001g of gold is about 1,000 - 2,000 VND. Meanwhile, to equip a 4 decimal place scale is much more expensive than a 3 decimal place scale that most stores are currently using, so we think it is unreasonable.

According to statistics from the Department of Standards - Measurement - Quality, there are currently over 100 establishments trading and processing gold jewelry and fine arts in the province. The goods are imported from major brands such as PNJ, SJC, DOJI and other brands. In addition, gold jewelry and fine arts are also purchased from exchanges among people and imported from abroad in the form of "hand-carried"... Before the circular took effect, the Department organized training, guidance and distributed documents on the content of Circular 22 and related legal documents to businesses and gold trading establishments. In early July 2014, performing the function of state management of measurement and quality, the Department established an inspection team to inspect the implementation of Circular 22 for 78 establishments trading and producing gold jewelry and fine arts in the province. According to Mr. Phan Ngoc Quang - Head of the Nghe An Department of Standards - Measurement - Quality: Up to now, the gold jewelry and handicraft market in the country in general and in our province in particular has been operating quite freely, each enterprise and business unit has its own standards that are not unified with each other. At the time of the inspection, most enterprises and shop owners were still confused and not ready to comply with the circular; had not yet announced the applicable standards, stamped the symbol code, gold content and weight on each product and labeled with enough information for consumers to know and choose. Business establishments are still using old measuring instruments that are not in accordance with regulations to determine the volume of gold in buying, selling and exchanging... To continue to support establishments and enterprises producing and trading this item to comply with the provisions of the law on measurement and quality, in the coming time, the department will continue to guide and support the profession so that enterprises clearly understand their responsibilities and seriously implement the circular.

Circular 22/2013 stipulates that gold and jewelry must comply with quality and measurement standards; the products must be stamped with codes, gold content, and must not use toxic substances before they can be circulated on the market. Enterprises producing and trading gold jewelry and fine arts that do not meet the standards may have their Business Eligibility Certificate revoked and will be fined up to 5 times the total value of the product that violates the quality of the goods, or be fined up to 2 billion VND if they violate the measurement regulations... However, up to now, although the authorities have conducted inspections, there has been no announcement of gold enterprises that have violated and been punished according to the above regulations. Therefore, in the coming time, relevant departments and branches need to have a better coordination mechanism in the work of propagating and disseminating the law, and at the same time need to improve coordination and collaboration in the management, inspection and supervision of activities related to the production and trading of gold jewelry and fine arts; It is especially necessary to transparently inform people about violating establishments, contributing to protecting the legitimate interests of consumers and legitimate business organizations and enterprises.

Article and photos:Ngoc Anh