Compliance and Risk Management

Refiners must have an effective governance framework that ensures accountability and oversight of a Refiner’s business. Refiners should also have a compliance and risk framework that provides for a robust control and compliance environment, which identifies and manages risks associated with their engagement in the market.

This section sets out the Rules that each Refiner must meet at a minimum to ensure they are managing their risks. Various elements of this section are also supported by detailed policies applicable to all Refiners, for example the Global Precious Metals Code (“the Code”) and the Responsible Sourcing Programme (“RSP”). This section does not replace the detail provided under either the Code or the RSP.

Failure to meet the requirements of this section can potentially lead to either the suspension or removal of a Refiner from the List. If a Refiner is moved to the Former List under this section, that Refiner cannot re-apply for a minimum of five years from the date of removal.

5.1 Management Systems and Controls

Rule (R) A Refiner must take reasonable care to establish and maintain systems and controls as are appropriate to its business. This includes, but is not limited to, having:

• a Compliance and Risk function;
• clear and appropriate apportionment of significant responsibilities among its directors and senior managers.

Guidance (G) The business and affairs of the Refiner should be adequately monitored and controlled by the directors, relevant senior managers and governing body of the company. LBMA records the contact details of a Senior Director and Compliance Officer. Any changes to these details should be notified to LBMA immediately.

5.2 Global Precious Metals Code

R All Refiners must attest to and comply with the Code in full at all times.

G Evidence of this should be provided with the application documentation. All Refiners are encouraged to apply the Code proportionally. This does not mean that different standards apply, merely that the systems and control environment applicable to a multimetal large Refiner may not be appropriate for a smaller Refiner.

5.3 Responsible Sourcing

R Refiners must comply with the RSP.

G All Refiners must be audited annually by an approved service provider, as provided in the RSP, in order to remain on the List.

Audits demonstrating compliance with the RSP must be submitted prior to GD accreditation. Refiners must thereafter submit their latest audit reports to LBMA within three months of the end of their financial year. These will be published alongside the relevant Refiner’s List entry on the LBMA website. Details of the RSP can be found on the LBMA website.

5.4 Economic and Trade Sanctions

R Bars must be capable of being delivered to, and held by, any person, including any person who falls within the definition of a US person identified in US sanctions, without violating any UN, EU, US, UK, or any other relevant, economic and/or trade sanction lists, or causing any person to violate any UN, EU, US, UK or any other relevant sanctions (collectively “Sanctions Rules”).

G Refiners are to comply with all relevant economic/trade sanctions lists and are strongly advised to seek legal guidance where relevant.

Breach of any Sanctions Rules will lead to immediate removal from the List.

5.5 Incident Review Process

R Refiners must co-operate in any Incident Review Process invoked by LBMA.

G LBMA’s 11-step Incident Review Process (as defined in Annex I) will be invoked in response to any stimulus of a reputational nature. Information can come from a variety of sources (trade associations, law enforcement agencies, market intelligence etc.) and LBMA will seek corroboration wherever possible as part of the process. Due to the sensitivities involved, LBMA may keep the process confidential until any issue has been resolved. The formal process is detailed in Annex I.

5.6 GDL Branding and Copyright

R Any use of LBMA GD branding by a Refiner must be approved by LBMA and in accordance with the Brand Guidelines (see Annex H).

R The List is the copyright of LBMA. Reproduction and dissemination of the List (in whole or in part, in any form) is strictly prohibited without the express prior written consent of LBMA and any such use of the List by a Refiner must acknowledge LBMA’s copyright.