GOLD AND PRECIOUS METALS PROCEDURE

• The possibility to purchase gold or precious metals depends on the laws and regulatory framework of each individual country. In many jurisdictions, the purchase of investment gold is allowed for both private individuals and corporate entities, provided that all AML/KYC requirements are met. However, some countries require specific registrations, licences or professional qualifications.
• 🇮🇹 ItalyIn Italy, only operators accredited by the Bank of Italy and enrolled in the OAM Register (Organismo Agenti e Mediatori) or other authorised entities can legally trade physical gold and precious metals on a professional basis.
• 🇲🇹 MaltaIn Malta, the purchase of gold is allowed for individuals and companies. However, professional operators who trade, import or export precious metals must be registered under the DPMS (Dealers in Precious Metals and Stones) regime, supervised by the Malta Financial Services Authority (MFSA) for AML purposes. This ensures that all transactions comply with strict due-diligence and reporting obligations.
• 🇪🇺 Other European CountriesRegulations vary across the EU. For example:
• Germany – private individuals and companies may purchase gold freely, while professional trading requires adherence to BaFin and AML regulations.  
• Switzerland (non-EU but major hub) – gold can be bought by private individuals without restrictions; professional traders must comply with FINMA and AMLA obligations.  
• France – gold can be purchased by both individuals and companies, with strict AML reporting requirements.  
• Spain – similar to France, both individuals and operators may purchase gold, subject to mandatory AML controls.

Many countries allow gold trading under specific regulations:

• United Arab Emirates – individuals and companies may buy gold; professional traders must comply with DMCC and UAE AML regulations.  
• Singapore – one of the most liberal markets; individuals and companies may purchase gold freely, with AML controls for professional operators.  
• United States – private individuals may purchase gold; dealers are regulated under FinCEN for AML compliance.

• Buying Procedure
• Buyer addresses an LOI to the Seller.
   
• If the LOI is approved by the Seller, he will issue a Full Corporate Offer (FCO) for the Buyer’s signature (acceptance of amount, price, and payment terms).
   
• If the Buyer accepts the Seller’s procedure, he signs the FCO and returns it to the Seller via fax or email.
   
• Once the Seller receives the FCO, signed and stamped, he will issue the SPA (Sale and Purchase Agreement).
   
• Contract Procedure
• Seller sends draft contract to Buyer.
   
• Buyer signs and stamps the contract and returns it to the Seller, via fax or email, indicating the contract will be considered an original.
   
• Seller issues four hard copies of the final approved contract to be signed and exchanged.
   
• Buyer furnishes confirmation text of draft payment instrument SBLC for Seller’s bank approval within three banking days from signing the contract.
   
• Seller approves payment text within three banking days thereafter.
   
• Buyer’s bank issues operative, irrevocable and confirmed payment instrument SBLC within five banking days thereafter.
   
• Upon confirmation of funds within ten banking days, Seller issues an operative performance bond to Buyer for 2%.
   
• Delivery and shipment commence as per agreed schedule.

• Standby Letter of Credit
• This credit is a payment or performance guarantee used primarily in the United States. They are often called non-performing letters of credit because they are only used as a backup should the Buyer fail to pay as agreed.
• Thus, a stand-by letter of credit allows the customer to establish a rapport with the Seller by showing that it can fulfil its payment commitments. Standby letters of credit are used to ensure fulfilment of a contract, and to secure payment for goods delivered by third parties.
• The beneficiary to a standby letter of credit can cash it on demand if the Buyer does not perform the payment as specified in the SPA. Stand-by letters of credit are generally less complicated and involve far less documentation requirements than other kinds of bank instruments.

• A performance bond is issued to one party of a contract as a guarantee against the failure of the other party to meet obligations specified in the contract. It is also referred to as a contract bond.
• A performance bond is usually provided by a bank or an insurance company to make sure a contractor completes designated projects.
• A performance bond is issued to one party of a contract as a guarantee against the failure of the other party to meet the obligations of the contract. A performance bond is usually issued by a bank or an insurance company.
• Most often, a Seller is asked to provide a performance bond to reassure the Buyer if the commodity being sold is not delivered.
• 💸 WHAT IS A TELEGRAPHIC TRANSFER (TT)?
• A telegraphic transfer (TT) is an electronic method of transferring funds utilised primarily for overseas wire transactions. These transfers are used most commonly in reference to Clearing House Automated Payment System (CHAPS) transfers in the U.K. banking system. Telegraphic transfers are also known as telex transfers.
• Telegraphic transfers are used most commonly in reference to Clearing House Automated Payment System (CHAPS) transfers in the U.K. banking system. Typically a telegraphic transfer is completed within two to four business days, depending on the origin and destination of the transfer, as well as any currency exchange requirements.
• Telegraphic transfers are also known as telex transfers (TT) or, more generically, as wire transfers or electronic funds transfers.

• Cost, Insurance, and Freight (CIF) is an international shipping agreement which represents the charges paid by a Seller to cover the costs, insurance, and freight of a Buyer’s order while the cargo is in transit.
• The goods are exported to the Buyer’s airport named in the sales contract. Until the goods are delivered to the Buyer’s destination airport, the Seller bears the costs of any loss or damage to the product.
• Further, if the product requires additional customs duties, export paperwork, or inspections or rerouting, the Seller must cover these expenses.
• However, once the goods have reached the Buyer’s airport of destination, the Buyer assumes responsibility for any fees or charges for delivering the shipment to the final destination.
• ⚓ WHAT IS FOB?
• Free on Board (FOB) is a shipment term used to indicate whether the Seller or the Buyer is liable for goods that are damaged or destroyed during shipping.
• “FOB shipping point” or “FOB origin” means the Buyer is at risk once the Seller ships the product. The purchaser pays the shipping cost from the factory and is responsible if the goods are damaged while in transit.  
• “FOB destination” means the Seller retains the risk of loss until the goods reach the Buyer.  
• KEY TAKEAWAYS
• Free on Board (FOB) is a term used to indicate who is liable for goods damaged or destroyed during shipping.  
• “FOB origin” means the Buyer is at risk once the Seller ships the product.  
• “FOB destination” means the Seller retains the risk of loss until the goods reach the Buyer.  
• The terms of FOB affect the Buyer’s inventory cost—adding liability for shipped goods increases inventory costs and reduces net income.  
• Legal definitions of FOB may differ between individual countries.

• A Letter of Intent (LOI) is a document declaring the preliminary commitment of one party to do business with another. The letter outlines the chief terms of a prospective deal.
• Commonly used in major business transactions, LOIs are similar in content to term sheets. One major difference between the two, though, is that LOIs are presented in letter format, while term sheets are listicle in nature.
• KEY TAKEAWAYS
• A Letter of Intent is a document declaring the preliminary commitment of one party to do business with another.  
• The letter outlines the chief terms of a prospective deal and is commonly used in business transactions.  
• LOIs are useful when two parties are initially brought together to hammer out the broad strokes of a deal before resolving the finer points of a transaction.  
• Terms included in an LOI are certain stipulations, requirements, timelines, and the parties involved.  
• Many LOIs include non-disclosure agreements (NDAs) and no-solicitation provisions.  
• Letters of Intent are also used outside of the business world in any circumstance where two parties intend to work together or form a deal..

• A Full Corporate Offer (FCO) is a standard business practice for all corporations in the resource market. Together with an ICPO (Irrevocable Corporate Purchase Order), a BGL (Bank Guarantee Letter) and a LOI (Letter of Intent), it is a basic term in modern business.
• 🤝 WHAT IS A SPA?
• A Sales and Purchase Agreement (SPA) is a binding legal contract between two parties that obligates a transaction between a Buyer and a Seller. SPAs are typically used for real estate transactions, but they are found in all areas of business.
• 🪙 WHAT IS LBMA?
• London Bullion Market Auction (LBMA) is an auction platform on which the Gold Price is calculated. The platform is electronic, tradeable, auditable and in line with the IOSCO Principles for Financial Benchmarks. Any party using the LBMA Gold Price for valuation and pricing activities requires a usage licence with IBA.
• The price continues to be set twice daily (at 10:30 and 15:00 UK time) in US dollars. Prices are also available in a further sixteen currencies (Australian Dollars, British Pounds, Canadian Dollars, Euros, Onshore and Offshore Yuan, Indian Rupees, Japanese Yen, Malaysian Ringgit, Russian Rubles, Singapore Dollars, South African Rand, Swiss Francs, New Taiwan Dollars, Thai Baht and Turkish Lira) but these are indicative prices for settlement only.
• To view these prices please refer to IBA’s website. IBA provides the price platform, methodology as well as the overall administration and governance for the LBMA Gold Price.

• The ICGLR Certificate serves as an assurance to Buyers that a shipment of minerals is free from conflict and that it meets all other ICGLR standards.
• Member State governments must review each export of designated material, including supporting documentation regarding the chain of custody and the mine of origin, before issuing a certificate.
• The International Conference on the Great Lakes Region (ICGLR) is a political alliance of twelve member states. Founded in the year 2000, it promotes peace and long-term development in the region.
• The ICGLR is made up of member states: Angola, Burundi, Central African Republic, Republic of the Congo, the Democratic Republic of the Congo, Kenya, Uganda, Rwanda, South Sudan, Sudan, Tanzania and Zambia.
• The initiative is rooted in the members’ realisation that the regional challenges can be solved only via joint efforts and only by using opportunities that benefit all.
• Challenges include, for example, violent clashes between armed groups and regular armies. These are threatening peace and stability in the region and are funded in part by illegal mining and the smuggling of tin, tantalum, tungsten and gold. Women and girls are particularly impacted by these crises and are often victims of sexual and gender-specific violence.
• The ICGLR mining site inspection and certification standards are designed to ensure that designated minerals come only from sites that are conflict-free and that meet minimum social standards (e.g. no child labour).
• The standards for assessing mining sites and the steps to promote improvements or otherwise sever ties with unacceptable mining sites are in accordance with the procedures and standards presented in the OECD Due Diligence Guide.
• Under the ICGLR mechanism, mining sites are inspected annually by a government mine inspector. These government inspections are subject to cross-verification by means of independent third-party audits by an auditor approved by the ICGLR. Ongoing risk assessments are carried out by the Office of the Independent Auditor of the Chaîne des Minerais.
• Mining Sites are classified into one of three categories:
• Certified (Green Rating) – the mine meets all standards (i.e. no conflict, no child labour); the mine can produce minerals certified for export.  
• Yellow Rating – violation of one or more important criteria; the mine operator has three months to resolve the problem. The mine can produce minerals for certified export.  
• Non-Certified (Red Rating) – serious offence against at least one critical criterion; the mine is not allowed to produce minerals for at least six months; the mine retains its red rating until a subsequent inspection shows that the breaches of the criteria identified have been resolved.  
• One of the main pillars of the ICGLR certification mechanism is the monitoring of regional mineral flows through a public ICGLR mineral tracking database.
• Monitoring and reconciling mineral flows within and between Member States will ensure, for all stakeholders (governments of Member States, local and international NGOs, end users in the private sector and others), the integrity of certified mineral flows from the region.
• The database will make it possible to monitor and reconcile the production, purchases and exports of exporters, mines, mining regions and Member States.
• The ICGLR Secretariat is responsible for the development and implementation of the regional mineral monitoring database. Member States, mines, traders, processors, exporters and other actors in the mineral chain will be required to provide all data (except price information, which remains confidential) on their production, purchases, their sales and exports to the ICGLR Secretariat, when the latter so requests.
• The ICGLR database will be accessible to the public in order to ensure and preserve the credibility of the ICGLR Ore Monitoring and Certification Mechanism.