Translation of the LBMA Responsible Gold Guidance into German

LBMA Responsible Gold Guidance

(LBMA Guidelines for Responsible Gold Trading)

Version 5 18/01/2013

Introduction

The LBMA has developed Guidelines for Responsible Gold Trading (LBMA Responsible Gold Guidance), which regulates the processing and sale of gold in a way that prevents and combats systematic and extensive money laundering and the financing of terrorist groups. These guidelines summarize and formalize the high standards already in place for all LBMA dealers.

The guidelines are based on the five-point framework of the OECDDue DiligenceGuidance for Responsible Supply Chains of Minerals fromConflict-Affected and High-Risk Areas, dated December 15, 2010, and follows in detail the Gold Trade Addendum adopted by the OECD on July 17, 2012.

Scope

All mints and refiners producing LBMA-certified gold bars (hereinafter referred to as "manufacturers") must meet the requirements of these LBMA Guidelines in order to continue to be listed by the LMBA on the Certified Manufacturers List. Any manufacturer applying for LBMA certification after January 1, 2012, must implement the LBMAResponsible Gold Guidance and undergo appropriate auditing to be included on the Recommended Dealer List.

Explanation of terms

AML-CFT: Anti-money laundering and financing of terrorist acts.

Involvement in Conflict: Involvement in armed conflict between two or more parties that results in human rights violations. The parties involved may be governments, militaries, criminal groups, or terrorists.

Origin of gold: The place of origin of gold extracted from a mine is the location of the gold mine in question. The place of origin of gold that has been reprocessed shall be the place where the gold in the chain of custody was delivered to the producer.

Gold processing supplier: A gold dealer directly involved in the refining or minting process.

Grandfathering: no proof of origin is required for gold stocks (bars, slabs, coins and nuggets in sealed containers) that can be proven to have been stored in the vaults of precious metal markets, central banks, exchange offices and mints and refineries before January 1, 2012. This also applies to stocks stored by third parties for the above-mentioned parties.

Human Rights: For the purposes of this policy, human rights are defined as those rights set forth in the International Bill of Human Rights. This Bill incorporates theUniversal Declaration of Human Rights of 1948, the International Covenanton Economic, Social and Cultural Rights of 1966, the International Covenant on Civiland Political Rights of 1966, and the two voluntary supplementary agreements.[1]

[1] See definition in OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-risk Areas, Supplement of Gold

ISAE 3000: International Standard on Assurance Engagements. This is an auditing standard that does not cover audits and re-audits of historical financial information.

ISO 19011: 2011: International Standard on Management Systems Auditing, including a statement of principles for auditing, for the governance of auditing programs, and for the conduct of management systems auditing, as well as a guide for determining the necessary competence of persons involved in the auditing process, such as the responsible manager, individual auditors, or an auditing team.

Mine gold: gold that originates from a mine (large, medium and small/small mines) and has never been refined before. This term includes gold and any rock containing gold that has been extracted from a mine in any form or concentration. This is until it has been refined(fineness 995 or greater), put into finished product form (bar, coin), and sold.

Money Laundering: Money laundering is a method of disguising the origin of illegally acquired money. Ultimately, it is a process of making proceeds of criminal activity appear to be legitimate income. The money may have been acquired through a wide variety of criminal acts, including drug trafficking, corruption, and other types of fraud. The various methods of money laundering differ in the degree of sophistication. They can be simple or complex.

Politically Exposed Persons (PEPs): Foreign PEPs are individuals who are or have been entrusted with political duties or offices in the past or present in other countries, for example, heads of state and government, senior politicians, senior government, judicial, and military officials, leaders of state-owned enterprises, key representatives of political parties.

Domestic PEPs are individuals who hold or have held important political positions domestically, for example, heads of state and government, senior politicians, senior government, judicial, and military officials, leaders of state-owned enterprises, important representatives of political parties. Individuals who hold or have held important positions in international organizations means that these individuals are part of the senior level of management and, for example, hold the positions of directors, deputy directors, and board members, or hold similar positions. The term PEPs specifically does not include middle management level or refer to junior staff in the above areas of work.

Recycledgold: Gold that has been previously refined one or more times. This term typically includes anything that contains gold, does not come directly from a mine, and therefore is not in the initial gold trading cycle. Specifically, recyclable material, used products from end users, waste products from metal production, material generated during affinage and production, and gold units produced as an investment in value, as well as products containing gold. This category may also include refined gold that has been processed into gold nuggets, gold bars, medallions, and coins, sold by a refiner to a jewelry manufacturer, bank, or dealer, and resupplied to an affine for restoration to its original value.

Supplier: this term refers to any individual or organization that may be considered part of the supply chain in the trade of gold or materials containing gold.

Financing ofTerrorism: Financing of terrorism includes the direct financing of terrorists and terrorist organizations and the financing of terrorist acts.

Verifiable Data: Data that can be verified by physically present stamps on products and/or by inventory records. The requirement for inventory already in existence when these regulations go into effect that has been subsequently dated, or for which there is no verifiable data, is the same as for other materials containing gold; that is, manufacturers must document the origin/mining in the same manner in these cases.

POINT 1 - Use of powerful management systems

1.Establish a company policy with particular attention to due diligence in dealing with gold supply chains.

Producers must adopt a policy with respect to the gold supply chain that follows the model outlined in Annex II of the OECDDue D iligenceGuidance for Responsible Supply Chains of Minerals fromConflict-Affected and High-Risk Areas.

At a minimum, this policy must address the following topics:

• Scope;
• Organization and responsibilities;
• Assessment benchmarks for high-risk gold supply chains;
• Diligence on supply chains, including the principle of supplying only to known customers ("know-your-customer" principle);
• Control of all transactions;
• Records
• Training

2. Establish an internal management structure to support supply chain due diligence.

Manufacturers' internal management must document the origin of mine gold, recycled gold, and any other raw material, thus ensuring that they have not been used at any point in the supply chain to finance armed conflict or terrorism or to launder money. It is also important to ensure that no human rights abuses have been committed to extract or resell the gold. The best framework for a corporate structure that ensures this is:

• Those at the management level must have the necessary skills, relevant knowledge and sufficient experience to exercise due diligence in supply chains;
• Access to the sources and tools necessary to perform and monitor this activity must be ensured;
• An appropriate corporate structure and smooth communication channels must ensure that information of concern, even if it relates to company policy, reaches the appropriate employees and suppliers;
• It must be perfectly clear who within the company is responsible for verifying supply chain due diligence.

3. Establish a reliable internal system to ensure due diligence, control and transparency in dealing with gold supply chains, including the tracking and identification of all traders involved in the supply chain

Supply chain traceability system

Manufacturers must implement a supply chain traceability system that collects and manages all supply chain information for each lot that is refined.

Records

Manufacturers must maintain sufficient supply chain documentation records as required in Item 2, Section 2 (Risk Assessment against Supply Chain Due Diligence Standards) to demonstrate that due diligence has been adequately and consistently implemented. These records must be retained by the manufacturer for at least five years after the end of the fiscal year to which they relate.

Training

Manufacturers must develop an ongoing training program for employees whose jobs include tasks related to the gold supply chain.

Policy Officer

Manufacturers must appoint a policy officer who reports to management.

The policy officer is responsible for all matters relating to the gold supply chain. In particular, he verifies compliance with due diligence in dealing with gold supply chains, determines whether the individual supply steps can be tracked accurately and, if necessary, requests additional documentation and information. Ensures appropriate action is taken when dealing with high-risk supply chains or transactions. He is also responsible for training employees to handle the relevant supply chains with care, for developing and continuously improving a monitoring system for dealing with gold supply chains, and for keeping senior management adequately informed so that they are able to fulfill their duties.

4. Increase outreach to gold suppliers, and where possible, assist gold suppliers in developing a due diligence system.

Manufacturers should encourage their gold suppliers to adhere to a supply chain policy that follows the framework of Annex II of the OECDDue Diligence Guidance forResponsible Supply Chains of Minerals fromConflict-Affected and High-Risk Areas, particularly with respect to all interactions with manufacturers. Furthermore, manufacturers should encourage their suppliers to confirm their supply chain policies in writing.

5. Implement a company-wide communication network to encourage full employee participation in identifying risks and reporting those risks to company management.

Manufacturers must develop a system that allows any employee to report supply chain concerns and any newly discovered risk.

POINT 2 - Identify and assess supply chain risks

1. Identify risks in the gold supply chain

For both mine gold and recycled gold, in accordance with Annex II of the OECDDue Diligence Guidance forResponsible Supply Chains of Minerals fromConflict-Affected and High-Risk Areas, manufacturers must identify the following risks that may arise in connection with supply chains from origin to refinery:

• Targeted or widespread human rights abuses associated with the mining, transportation, and trading of gold;
• Direct or indirect support of non-state armed groups or public or private security forces[1].
• Bribery and fraudulent misrepresentation in connection with the origin of gold;
• Money laundering and financing terrorist groups;
• Involvement in conflicts.

Monitoring of transactions

The manufacturer must conduct appropriate audits and monitor the business partner's transactions throughout the collaboration, thereby ensuring that all transactions are consistent with the manufacturer's knowledge of the supply chain and risk profile. Transactions must be evaluated particularly with respect to risks that may arise.

In this regard, the manufacturer must obtain and document the following information for each shipment:

• For mine gold:
  • Estimated weight and weight verification results (provided by the business partner);
  • Shipping/transport documents (bill of lading, air waybill, provisional invoice if applicable);
  • Export and import form for high-risk transactions, if applicable.
• For recycled gold:
  • Estimated weight (submitted by business partner)
  • Shipping/transport documents (waybill, air waybill, provisional invoice if applicable);
  • Export and import form for high-risk transactions, if applicable

Manufacturers must ensure that documents do not contradict each other and are consistent with their knowledge of the supply chain. Transactions whose shipping documents show contradictions must be reviewed, and the results of this review must be recorded in writing.

3. Report results of risk assessment to management

Evaluating the controls performed is the responsibility of senior management, which has ultimate responsibility for the gold supply chain. Management must therefore carefully select the policy officer and provide him with the necessary resources to fulfill his duties.

Senior management must approve any new supply chain identified as high-risk and re-evaluate each year its decision whether or not to continue that business relationship.

POINT 3 - Develop and implement a management strategy to deal with identified risks

1. Design a strategy for managing an identified risk by (i)continuing the trading relationship while mitigating the risk, (ii) resting the trading relationship while mitigating the risk, or (iii) terminating the trading relationship and avoiding the risk in this manner.

If the due diligence review of the gold trading chain has revealed evidence of money laundering, terrorist financing, contribution to conflict, or human rights abuses, or if the likelihood that such may be present is deemed too great, the Producer must immediately cease refining gold of that origin.

If the careful review of the gold trade chain makes it seem possible that money laundering, financing of terrorism, contributions to conflicts or human rights violations are taking place in the context of this transaction, the producer must stop the refining of gold of this origin until, with the help of additional information/data, the suspicion has been confirmed or dispelled.

If the outcome of the gold chain of custody review is not satisfactory, but the suspect company can convincingly rebut the suspicion, the manufacturer may continue to refine gold of that origin, provided convincing performance targets to improve the situation are formulated and implemented by the company concerned within a reasonable period of time.

2. If a management strategy is used to mitigate risk, it must introduce verifiable improvements, allow monitoring of the effectiveness of the measures, and include regular reassessments of the risks as well as regular reports to the appropriate members of management.

The risk mitigation strategy improvement described in 1 above must include clear performance measures, which include qualitative and/or quantitative metrics for evaluating improvements. A reasonable deadline must be given to the relevant companies in the supply chain.

Progress under this plan must be reviewed regularly and reported to company management.

Once the deadline has passed, a review will take place to determine if the actions have been properly implemented. Company management will be informed of the outcome of this review and will then decide whether to continue using gold of that origin.

POINT 4 - Involvement of independent third parties in supply chain verification

Requirements for the auditor(s)

Producers must have their gold supply chain monitoring arrangements and their practical implementation verified by independent and competent third parties, which may include governments.

The LBMA publishes a list of recommended auditors, which can be found on its website(www.lbma.org.uk).

Auditing Standards

The LBMA accepts the fact that manufacturers are familiar with various international auditing standards. For this reason, the LBMA accepts both an audit under ISAE 3000 and an audit under ISO 19011:2011. The LBMA provides detailed guidance for both auditing standards for third parties to follow in their review.

Audit Procedures

If the audit is an audit performed in accordance with ISO 19011:2002, auditors must perform their evaluation in accordance with LBMA's Third Party Audit Guidelines, specifically the sections that relate to ISO 19011:2011.

If the audit is also a financial statement audit performed by an auditor, auditors must proceed in accordance with ISAE 3000, following the LBMA's Third Party Auditing Guidelines and specifically consulting the sections here that relate to the application of the ISAE 3000 auditing standard. The auditors confirm the result of their examination in the final report for the company (see step 5).

Audit report

The audit report must contain:

• Evidence of the auditor's professional qualifications;
• Confirmation of the auditor's independence;
• Indication of the auditing standards according to which procedures were performed;
• An assessment of the compliance of the manufacturer's approach with the LBMA Guidelines for Responsible Gold Trading.

In addition, auditors must make recommendations to manufacturers to improve their approach to gold supply chains. These recommendations may be set forth in an additional report. Any deviation from the regulations must be reported to the LBMA.

Audit intervals

A review of the manufacturer's compliance with the LBMAResponsible GoldGuidance must be conducted at annual intervals, each covering the previous 12 months of activity. First, a full audit (reasonable assurance/comprehensive review) must be conducted to ensure that the manufacturer is behaving in accordance with the guidance. If such a full review is successful and without findings, the manufacturer is allowed to initiate a lesser review or "reassessment" (limited assurance/repeat control) during the subsequent two years. A full inspection is required every three years; however, some manufacturers prefer to have a full inspection every year. Inspection intervals are shortened when noncompliance has been identified or when drastic changes have occurred related to the manufacturer's supply chains.

Submission of audit reports to LBMA

Copies of both full audit final reports and post audit reports must be submitted annually to LBMA management via email or hard copy.

POINT 5 - Publish reports on compliance with supply chain due diligence

Producers must publish reports on their company's policy on gold supply chain due diligence, with particular attention to security aspects and information on ownership and legal relationships of all companies involved in the supply chain. In addition, manufacturers must publish an annual report on compliance with the LBMA Responsible Gold Guidance, covering the company's activities during the previous twelve months.

If third-party audits are conducted based on ISO 19011:2002, manufacturers are not required to publish a compliance report.

Generally, manufacturers must make available to the public information on their company policies regarding gold supply chains and the LBMA final report.

For business audits, manufacturers must submit a Compliance Report for Manufacturers, which must include the following information:

• Manufacturer name;
• Audit period;
• Summary of efforts made in terms of compliance during the period in question;
• Degree of compliance of the manufacturer's actions with each item in the LBMAResponsible GoldGuidance;
• Management's opinion on the implementation of the actions required by the LBMA Responsible GoldGuidance.

Producers must make available to the public, along with the audit certificate, a written account of their company's policy on gold supply chains and the compliance report on their company's exercise of due diligence on gold supply chains.

Regardless of the auditing standard selected for third-party review, manufacturers must submit an improvement plan to LBMA management if there are deviations from the required due diligence and/or the manufacturer has failed to implement one or more of the requirements as listed in items 1 through 5 of the LBMAResponsible Gold Guidance.

The manufacturer's improvement plan must include the following items for each nonconformance:

• Description of the issue;
• Reference to the relevant section of the LBMA Responsible GoldGuidance;
• Risk assessment of non-compliance
• Planned corrective action for any identified non-compliance;
• The timeframe for implementing corrective actions for each noncompliance identified;
• Name of the person responsible for implementing the corrective actions.

Deadline

Manufacturers producing gold bars that meet the "Good Delivery" standard and for which they desire a certificate must begin implementing the LBMAResponsible Gold Guidance on January 1, 2012. They have all of 2012 to fully comply with the guidelines.