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					      Presentation on
Hallmarking Scheme for Gold
             by
             Parminder Bajaj,
      Scientist F & Head Hallmarking
 Bureau of Indian Standards
                28 July 2007
3rd   International Gold Summit, N.Delhi
Gold Consumption – Key Markets
       & Indian Scenario
Annual Gold Consumption in key markets (in
 Tonnes):
China – 552, USA – 405, Middle East – 408, Turkey – 260,
Saudi Arabia – 165, U.A.E – 115, U.K – 72

Annual Gold Consumption in India - 800 Tonnes
   •   For Jewellery - 80%
   •   For investment - 15%
   •   Industrial use - 5%

Jewellery Industry Profile in India (Estimated)
   • Jewellers/Retailers/Manufacturers > 3,00,000
   • Large scale units        100
        Need to Regulate Quality


• High Gold Consumption in India
• Low Purity Index

• Ensuring Value for money for consumer
• Providing third party assurance on
  purity for consumers
                       Market Survey
All India Average
                                         2001              2006
                           (120 Samples in 8 Cities)   (162 samples in 16 cities)
• Samples Failing                 89 %                   90 %
• Average shortage in purity       11%                  13.5%
• Highest Purity Shortage        38.6%                 44.66%


2001 – Delhi,Mumbai, Chennai, Hyderabad, Jaipur, Bangalore,
         Ahmedabad & Kolkata

2006 - New Delhi, Gurgaon, Kanpur, Meerut, Ludhiana,
      Chandigarh, Jammu, Jaipur, Jodhpur, Indore,
      Thiruvananthapuram, Madurai, Pune, Vadodara,
      Bhubaneshwar, Ranchi,
         What is Hallmarking

• Hallmarking - The accurate
  determination and official recording of
  the proportionate content of precious
  metal .

• Hallmarks - Official marks used in
  many countries as an assurance of
  purity or fineness of precious metal
         Launch of Hallmarking
            Scheme in India


• BIS launched Hallmarking Scheme
  in April 2000 for Gold Jewellery

• Gold Medallions were covered in
  Sept. 2005

• Jewellery & Artefacts of Silver were
  covered in Oct. 2005
     Objectives of Hallmarking
              Scheme

• To protect consumer against the
  purchase of gold jewellery with
  lesser than declared purity
• Develop export competitiveness
• Make India as a leading gold
  market in the world
              BIS Hallmarking
                  Scheme
The scheme, voluntary at present is operated
as Third Party Certification Scheme and
involves :
 • Certification of Jeweller (retailer)/ Jewellery
   manufacturer through grant of licence
 • Recognition of Assaying and Hallmarking
   Centre according to BIS prescribed criteria
 • The scheme is for :
 Gold Jewellery/Artefacts (Medallions)
 Silver Jewellery/Artefacts
              Certification of
                 Jeweller

• As per IS 1417: 1999 Gold and Gold
  alloys, Jewellery / Artefacts – fineness
  and marking - specification (aligned
  with ISO 9202:1991)

• Doc: STI/1417/4 Scheme for
  Certification of Gold
             Grades of Gold Covered in
                IS 1417 & ISO 9202

IS 1417                                ISO 9202
Fineness                               Fineness

995        Standard Gold
                 (for medallions)
958        23 Carat }
916        22 carat }                  916
875        21 Carat } Gold for
750        18 Carat } Jewellery and    750
585        14 Carat } artefacts        585
375        9 Carat }                   375



No Negative Tolerance Permitted on Fineness/Purity
                       IS 1417:1999
                       Requirements
• Gold alloy including solders for manufacturing
  jewellery/artefacts shall be free from cadmium,
  iridium & ruthenium

• Solders used shall be of same fineness as that
  of jewellery/artefact except 23 carat
  jewellery/artefact

  – IS 3095 :1999 Gold solders for use in manufacture
    of jewellery- Specification (first revision)

  –    IS 2790:1999 Guidelines for manufacture of
      23,22,21,18,14 and 9 carat gold (first revision)
                      IS 1417:1999
                      Requirements

• Gold jewellery/artefacts which may not be
  Hallmarked are those:

  – fail to comply with specified fineness/caratage.
  – which is not solid or which is made with a hollow
    center and then filled with base metal, cement, lac or
    other foreign substance thereby giving the article a
    false or added weight or strength unless the weight of
    gold is indicated on the article along with the
    jeweller’s/ sponsorer’s logo.
  – Gold article/ornament on which it is physically
    impossible to stamp the marks.
                  Components of BIS
                      Hallmark

• BIS Hallmark



•   Purity /Fineness Mark       916
•   Centre’s Mark (example)     MMTC
•   Jeweller’s Mark (example)   TBZ
•   Code Letter for the Year
    of Marking                  H for 2007
                 Display Requirements in
                         the Shop
•    Hallmarked Jewellery / Artefacts available here.
•    BIS Licence Number. CM/L-
•    Hallmark illustration and definition of each component

                  916          Hallmarking Centres
                               Logo
                                                       Jewellers
                                                       Logo
                                                                       Year of Marking
                                                                       Code Letter

    BIS LOGO      PURITY


•    The relationship of fineness of gold jewellery with caratage as specified in IS 1417
     958 = 23 C                    916 = 22 C
     875 = 21 C                    750 = 18 C
     585 = 14 C                    375 = 9 C
•    Magnifying glass (at least 10X magnification) for viewing hallmark available
•    Complete name and address
       Recognition of Assaying
       and Hallmarking Centre
• Based on Criteria for Recognition of
  Assaying and Hallmarking Centres
HMS /RAHC/G01- January 2001 for Gold
  (at par with Vienna Convention
  requirements)
• Assaying of Gold - According to IS 1418
  (aligned with ISO 11426) &
• Centres to obtain Accreditation as per
  ISO/IEC 17025 from NABL
            Steps in Assaying and
                Hallmarking
• Receipt of Jewellery and its segregation
  article wise
• Checking for homogeneity of the lot by XRF
• Sampling by Scraping/ Micro Drilling/ Cutting
  etc.
• Assaying of the composite sample as per IS
  1418 by Fire Assay Method
• In case the sample passes , entire Jewellery
  lot is hallmarked by laser marking and
  returned to the Jeweller
• In case of failure in fire assay, Jewellery is
  returned back without hallmarking
                    Fee Structure
• Application-cum-Processing Fee : Rs.2000/-
• Certification Fee (As applicable) :
  – Rs. 25000/- for a period of 3 years for location in
    Metropolis (Delhi, Mumbai, Kolkata & Chennai)
  – Rs. 20000/- for a period of 3 years for location in State/District
    Head Quarters
  – Rs. 10000/- for a period of 3 years for location in other than
    Metropolis & District Head quarters

• Second licence in the same premises - no additional
  certification fees.
• 25% discount for Multi-Chain outlets
• Renewal Application-cum-Processing Fee : Rs.1000/-
• Taxes applicable 12.36% as service tax &
  education cess
            Hallmarking Charges

• Hallmarking charges depending upon weight of
  article is payable by jeweller to the hallmarking
  centres
 Wt. of Article (for Gold) Charges/article
  Upto 20 gm                          Rs. 18
  From 20 – 100 gms                   Rs. 50
  Above 100 gms                       Rs.100
  Minimum charges for a consignment shall
  be Rs. 300/-
           Consumer Protection

• Consumers can get hallmarked
  jewellery tested from any A&H Centre
   If found lesser than marked purity
  -Testing charges to be refunded to
      jeweller who hallmarked Jewellery
   -Jeweller obliged to satisfy the
      customer through replacement
             Initiatives by Govt.
• Central Scheme for Setting up of A&H Centres
  in 35 select districts with one time Financial
  Assistance @15% of Cost of Machinery &
  Equipment subject to maximum of 15 lakhs
  per centre
• Effective Consumer Awareness Campaign thru’
  Print & Electronic Media
• RBI Circular to Banks for Preferential
  treatment to Hallmarked Jewellery while
  granting Advances against Jewellery –
  November 2005
• Letter to Chief Secretaries of States/UTs for
  promotion of Scheme
• Mandatory Hallmarking w.e.f. 1 January 2008
           Initiatives by BIS

• Regular Awareness Programmes for the
  Stakeholders across the country
• A film on hallmarking for projection
  during consumer awareness programmes
• Simplification & Rationalization of BIS
  Hallmarking scheme
• Formulation of Hallmarking Regulations
  for legal back up
               Simplification & Rationalization of
                      Hallmarking Scheme

                 Earlier             After Simplification
Rationalizatio   Rs. 25,800/- per    In Delhi, Mumbai, Kolkata &
n of Fee         annum               Chennai     – Rs. 25,000/- for 3
Structure                            years
                                      In District Head Quarters –
                                       Rs. 20,000/- for 3 years
                                      In other areas - Rs. 10,000/- for
                                     3      years
Application      Common for all      Separate Form for Hallmarking
Form             products            - More Realistic & Simplified

Time Taken       30 days with        7 days without Preliminary
for G.O.L        Preliminary Insp.   Inspection
Operation of     Elaborate Records Records not required
Licence          required
               Progress of Gold Hallmarking
                  Scheme since launch in
                        April 2000
              31      31      31      31     31     31      31      25
              Mar.    Mar.    Mar.    Mar.   Mar.   Mar.    Mar.    July
              2001    2002    2003    2004          2006    2007
Growth                                       2005                   2007




No. of        186     286     560     795    935    1410    3466    4106
Licences
No. of        8       12      13      15     24     36      45      55
Centres
Articles      0.936   4.766   14.93   31.4   62.4   115     210.3   254.66
                                                            3       (As on
Hallmarked
                                                                    30
(in lakhs)                                                          June
                                                                    07)


           Licences granted for Silver since launch = 298
                     Region - wise
                     Distribution
Region       Licences        Centres     Gold Articles
           Gold ( Silver)                 Hallmarked
                                          (in lakhs)
           (As on 25 July 2007)        (As on 30 June 2007)


Central        551   (87)         11      18.21
Northern       298   (56)          1         -
Eastern        670   (19)          3      35.34
Western       1386   (89)         13      77.45
Southern      1201   (47)         27     123.65
Total         4106   (298)        55     254.66
                  Statewise No. of Licences
                  for Gold(Silver)and A&H
                          Centres
State/U.T         Licence     Centres State/U.T            Licence Centres
DELHI              313 (52)      6      MAHARASHTRA        680 (20)       8
RAJASTHAN           86 (6)       1      GUJARAT            696 (69)       5
M.P                67 (20)       2      DAMAN & DIU            3          0
CHATTISGARH         22(3)        1      TAMIL NADU          465 (7)       9
UTTRANCHAL          18 (2)       0      KERALA              310 (2)       11
U.P                102(15)       1      A. P                222 (7)       3
PUNJAB              62 (3)       1      KARNATAKA           178(30)       4
HARYANA            105 (34)      0      PONDICHERRY          26(1)        0
CHANDIGARH          35 (4)       0      WEST BENGAL         427(1)        3
J&K                   9          0      JHARKHAND            57 (2)       0
H.P                 30(4)        0      ORISSA               70 (1)       0
ASSAM               18 (5)       0      BIHAR               81(10)        0
GOA                   7          0      TRIPURA               17          0
STATES WITH NO LICENCE : SIKKIM, ARUNACHAL PRADESH, NAGALAND, MANIPUR, MIZORAM,
MEGHALAYA, DADRA NAGAR HAVELLI, LAKSHADWEEP, ANDAMAN & NICOBAR
            Impact of Initiatives
             Earlier              After
                               Simplification
Growth in    1080 licences   3188 licences
No.of        granted in      granted since
Licences     about 6 years   January 2006 in
             upto 31 Dec.    18 months
             2005

Average           16                177
Growth in
No. of
Licences/
month
                     International
                     Accreditation

• Vienna Convention, 1972 - Convention on The Control
  And Marking of Articles of Precious Metals –
  Hallmarking Convention
• 18 Member Countries : Austria, Finland, Norway,
  Portugal, Sweden, Switzerland and the United Kingdom,
  Denmark, Ireland, Israel, The Czech Republic, The
  Netherlands, Latvia, Lithuania and Poland, Hungary,
  Cyprus, Slovak Republic
• In the process of acceding :Slovenia and the Ukraine
• Others interested countries : Bahrain, China, India,
  United Arab Emirates, Uzbekistan
        Role and Functions of the
         Hallmarking Convention
• Objective of the Hallmarking Convention :

  Facilitate trade in precious metal articles
  Maintaining fair trade and consumer
   protection justified by the particular nature
   of these articles.

• For that purpose, the Hallmarking
  Convention has introduced the first
  international hallmark – the Common Control
  Mark (CCM) – indicating the precious metal
  and its fineness.
        Requirements of Vienna
           Convention, 1972

• Country to be member of UN or similar
  body
• National Hallmarking scheme
• Appropriate legislation on hallmarking
• Independent assaying centres which
  meet the requirements of ISO/IEC
  17025 (NABL Accreditation)
• For further details of the convention
  please visit
  www.hallmarkingconvention.org
           International Accreditation-
                  Indian Status
• Indian is No. 1 based on production of gold jewellery of
  539 tonne in 2005 followed by Italy of 228 tonne
• Indian Export of Gold Jewellery during 2005 – Rs. 171.12
  billion & expected to be at similar level in 2006-07
• India as major player in Gem & Jewellery exports is
  considering joining Vienna Convention for easy access to
  European markets and enhanced image of Indian
  Jewellery
• The existing infrastructure of certification is technically at
  par with the Convention Requirements
• Adequate experience of jewellery certification available
• Setting up of Independent assaying centre/referral lab and
  separate Hallmarking Regulations is under process
• Participation in Vienna Convention meetings
                     Emerging Trends &
                      Challenges Ahead
• Implementation of Mandatory Hallmarking for Gold
  Jewellery from 1 January 2008 as decided by Govt. of
  India involving:
     Setting up of large No. of A&H Centres
     Innovative Licensing Mechanism for Over 3 lakh Jewellers
     Regulatory Mechanism including Surveillance
     Requirement of Infrastructure & Manpower for BIS
     Involvement of State Govts. etc. in co-operation with the
      Major Stakeholders
• Training of Artisans and Jewellers
• Stepping Up of Awareness / Publicity Efforts during
  2006 & 2007
• Boosting Exports of Gold Jewellery
• Becoming Member of the Vienna Convention
      Contact Details

Head (Hallmarking Department)
  Bureau of Indian Standards
 9, Bahadur Shah Zafar Marg
           New Delhi
    Phone : 011-23234223
   E mail : cmd4@bis.org.in
   Website : www.bis.org.in
 Thanks
 for the
Attention