Page 32 - Bullion world volume 4 issue 6 june 2024

Bullion World | Volume 4 | Issue 6 | June 2024

Call for Removal of Government Monopoly on Gold refined gold he had imported from Singapore the
Bar Production previous month was for farmers who would bury it on
The state-owned Saigon Jewelry Company (SJC) has their farms for wealth protection. I’ll leave you to mull that
called on the government to relinquish its monopoly on over and come up with your own conclusions on where
gold bar production, allowing businesses to import and that really went.
produce bullion. Despite popular belief, SJC gains no
benefit from this monopoly and has faced significant Future Prospects and Regulatory Changes
financial challenges since its implementation in 2012. In a bid to address potential loopholes and weaknesses
The gap between domestic and global gold prices has in the existing regulatory framework, the government
continued to widen, with Vietnamese prices now 20% will undertake a comprehensive review of Decree No.
higher than global rates. SJC's CEO, Le Thuy Hang, 24/2012/ND-CP.
argues that ending the monopoly would help reduce gold
smuggling and stabilise prices. This review aims to develop new policies and regulations
better equipped to handle the complexities of the
Economic Implications and Market Reactions modern gold market. The long-term success of these
The high domestic gold prices pose a threat to Vietnam's measures depends on effective enforcement and a
economic stability, making the economy more vulnerable consistent policy stance, ensuring a stable and fair
to external shocks and undermining investor confidence. marketplace.
The government's intervention aims to protect
consumers from artificially inflated prices and ensure a In Summary
fair marketplace. • Vietnam's ongoing efforts to regulate the gold market
reflect the government's commitment to maintaining
However, the ongoing crackdown is expected to have economic stability and protecting consumers.
far-reaching consequences for the industry, potentially By tackling market manipulation and addressing
leading to market consolidation as smaller, non- smuggling routes, the government aims to create a
compliant players struggle to survive. transparent and lawful gold industry.
• This includes urging internationally known security
Smuggling Routes and Lack of Transparency companies, who transport gold, to take greater
A significant challenge in regulating the gold market is responsibility by conducting more extensive
the smuggling of gold from neighbouring countries. Laos due diligence on the final use of the product in
and Cambodia are primary sources, with Vietnamese destination countries.
companies often having sister companies across the • By implementing stricter measures and ensuring
border to facilitate these activities. transparency, these companies can play a crucial
role in combating gold smuggling and promoting
We reached out to Ross A Friedman an Independent ethical practices in the industry.
Consultant in the gold industry who has extensive • As Vietnam navigates the challenges of the
knowledge of the gold market in Asia and asked Ross - global economy, these measures offer hope for
What steps can companies involved in the gold trade in a prosperous and stable future. However, in all
SE Asia take to combat gold smuggling into Vietnam? seriousness, haven’t we heard these statements
“Internationally known security companies, who before from Vietnam?
transport gold know that the gold may be smuggled but • The gold industry can only sit back and wait to see
need to take greater responsibility by conducting more if the necessary steps are taken and the results are
extensive due diligence on the final use of that product in positive, but I for one will not hold my breath!
destination countries.

By implementing stricter measures and ensuring
transparency, security companies can play a crucial Disclaimer: The views and opinions expressed
role in combating gold smuggling and promoting in this article are solely my own and do not
ethical practices in the industry." - Ross A Friedman - necessarily reflect the official policy or position of
Independent Consultant any other organization, employer, or company. Any
I personally met one Cambodian gold dealer on a visit content provided in this article is for informational
to Phnom Penh who claimed that the 500kg of Swiss purposes only.

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