Swiss Court Decision Deals a Blow to Making Gold Industry More Transparent

The Switzerland Federal Court has snubbed a request from a Swiss NGO that would require the provision of more detailed data on imported gold and increase transparency in the industry. Gold has attracted the attention of unscrupulous players since time immemorial, and the global gold industry is still inundated with bad players who flout human rights and other laws in their bid to profit from the precious metal.

Refineries are often secretive about the origins of their gold ore, likely because a decent portion is sourced from conflict regions such as eastern Congo where militias, criminal groups and even mercenaries run gold mines in terrible conditions and exploit local communities. In search of enhanced transparency in Switzerland’s gold market, advocates asked the nation’s highest court to compel gold refiners to provide detailed information on their gold imports.

However, the Bern-based Society for Threatened Peoples (STP) suffered a major setback after the court ruled that the Federal Office of Customs and Border Security wasn’t obliged to provide the NGO with gold import information from Swiss companies.

A press release published after the court hearing noted that the disputed information was protected by a tax secrecy clause imposed by the nation’s VAT law and was consequently excluded from the Transparency Act’s right to obtain information. While the four-to-one ruling in favor of Swedish refiners came as a disappointment to STP’s managing director Christoph Wiedmer, he says he isn’t surprised by the court’s decision. He says the court’s argument was “hard to understand” as the campaign simply wanted Swiss refineries to be required to declare the origin of their gold imports, but the court focused on tax secrecy.

Furthermore, the NGO was also seeking support for its effort to advance and strengthen due diligence laws for Swiss corporations but ran into a wall when voters rejected the Responsible Business Initiative at the 2020 ballot. The campaign is part of a vocal group of Swiss experts, academics and NGOs calling for increased transparency in Switzerland.

Switzerland refines approximately 70% of the world’s unrefined gold every year, importing around 50% of its unrefined ore from nongold-producing nations, such as Hong Kong, the United Arab Emirates and Britain. Many of Switzerland’s gold suppliers are also nations that are currently at war and use profits from gold to fund hostilities, leading to the creation of the phrase “blood gold” or “dirty gold.” Gold from illegal mining operations in places such as the Amazon that cause significant damage to local communities and ecosystems also end up in Swiss refineries.

STP has long called for the end of illegal mining in Brazil and asked for greater transparency in the Swiss gold sector with little success.

A similar effort to increase transparency in the sector in 2018 failed after gold-refining titans Metalor Technologies, Valcambi, MKS Pamp and Argor Heraeus appealed the request on the basis of business secrecy, tax secrecy and protection of third-party privacy.

It is now up to individual players in the gold industry such as Eloro Resources Ltd. (TSX: ELO) (OTCQX: ELRRF) to maintain the highest degree of transparency so that the gold they produce can appeal to buyers conscious about the dangers associated with “dirty gold.”

NOTE TO INVESTORS: The latest news and updates relating to Eloro Resources Ltd. (TSX: ELO) (OTCQX: ELRRF) are available in the company’s newsroom at http://ibn.fm/ELRRF

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