The London Bullion Market Association (LBMA) said it wants six accredited Russian gold refiners to clarify if they have commercial ties with sanctioned Russian entities. The association’s request comes a few days after it revoked the membership of three sanctioned Russian banks.

LBMA Accreditation

The London Bullion Market Association (LBMA) has requested six Russian gold refiners on its good delivery list clarify if they have commercial ties to sanctioned entities. If such links exist, this will likely affect the refiners’ accreditation status with the LBMA, a report has said.

According to a Reuters report, the six accredited Russian refiners that are on the LBMA’s “good delivery” list include JSC Krastsvetmet, JSC Novosibirsk Refinery, JSC Uralelectromed, Moscow Special Alloys Processing Plant, Prioksky Plant of Non-Ferrous Metals, and Shyolkovsky Factory of Secondary Precious Metals.

The association’s move to gain clarity from the refiners comes almost a week after it revoked the membership of three Russian banks, namely VTB, Sovkombank, and Otkritie, after they were added to the list of sanctioned entities.

Sakhila Mirza, the association’s general counsel, is quoted in the report explaining why the LBMA is now asking the refiners to confirm if they have ties to sanctioned entities.

“The good delivery rules are very clear. We’ve asked for compliance with our rules,” Mirza said.

The Good Delivery List

The LBMA, which “owns” the good delivery list, only accredits refiners whose gold bars meet its exacting standards for trading on the global OTC (over-the-counter) market. According to the LBMA, its accreditation acts as the “de facto standard” that is used by players in the gold industry.

Loss of the LBMA accreditation denies Russian refiners access to the Loco London Market where the association says “precious metals are traded directly between two parties without the involvement of an exchange.” Yet, according to the Reuters report, some traders and bankers believe the Russian refiners’ removal from the LBMA market is unlikely to have a big impact on the market.

They add that in the event the LBMA does kick out the refiners, the precious metal will still find buyers in China and in the Middle East. On the other hand, when a refiner’s accreditation is removed, the precious metal that was produced when the accreditation subsisted will remain in the London market, the report added.

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