"Bangalore Refinery : Your Trusted Partner Since 1977, Our Online Shop is Live"

Procedure to Know Your Counterparty (KYC) Policy – Bangalore Refinery

Procedure to Know Your Counterparty (KYC) Policy

  1. The following process will be adopted to determine the antecedents of all the related stakeholders of BRPL to ensure compliance with the guidelines to ensure no transactions are conducted with third parties that are or are suspected to deal with miners in conflict affected or high-risk areas.
    1. Capture details of
      1. PAN Card, AADHAR Card/ Passport, GSTN number
      2. Copy of ROC documents
      3. Details of Promoters, owners, proprietors or partners of the firm
      4. Details of the Board members if it is a Private Limited Firm
      5. Bank details to ensure financial transactions are through banking channels only
    2. Supplier is conformant with the RMI standards and has successfully undergone an audit as per the requirements of RMI. The conformance should be valid on the date of the transaction
    3. Obtain details of related party transactions as part of the self-declaration form to ensure that there are no direct or indirect linkage with organisations having links with the Conflict affected and High-Risk areas.
    4. Signed affidavit/ self-declaration forms to be obtained from all parties involved with import of gold from miners in conflict affected areas.
    5. All fund transfer through banking channel and no cash transaction would be allowed. This will provide traceability of the transactions.
  2. Due Diligence Process 
    1.  The main aim of this process to independently verify the business of the supplier and also the beneficial owner. Supplier has to approved by the Senior Management prior to establishing business relationship. Senior management or a third party may also visit the supplier to check the on ground geniuness. In certain emergency cases some supplier who look like low risk based on the KYC would be classified as medium risk till physical check is possible.
    2. Another aim of the Due diligence process is to check the plausibility of the material been tainted in term of the objectives of this policy.
    3. The following process will always be adopted
      1. All purchase of precious metal and high value items would be done from reputable and known suppliers, and by implementing suitable KYC norms for the suppliers. Before purchasing gold, sufficient due diligence needs to be conducted of the source and the benefactor of funds. If out of country the banking channels will be used to get the opinion report.
      2. Appropriate due diligence would be done on the party and reviewed by the senior director or the cmo. Main points to be looked at is the reputation is the supplier, the source of gold , whether the business model makes sense,.. If they are any such red flags he will not be approved as a supplier.
      3. All fund transfer through bank and no cash transaction would be allowed. This will provide traceability of the transaction. This will ensure that we do not, even inadvertently, accept forms of payment that are known or suspected to be means of laundering money or financing of armed conflict.
      4. Designated Persons are required to observe and record payments and transactions consistent with all established policies and procedures and follow global financial standards for acceptable forms of payment. All transactions will be recorded in the authorised Accounting Software and Invoices/ Payments will be processed through the software only.
      5. Every year they will be reverification of the top supplier and risk analysis as well. This would be review in the appropriate 6 monthly meeting. However if the supplier is regular and has no red marks, for 2 such verification the frequency of such reverification would be once in 2 years. If any addition information is required the same would be collected during reverification.
  3. In addition to the above, the additional processes for each category of procured gold will be followed as applicable. These include and are not limited to the following.
    1. Purchase of Mined Gold Locally
      1. Get details of the mine, location and Govt. approvals.
      2. If necessary (In case of CAHRA), an authorized person should visit the mining site to check the physical existence along with the production capacity of the mine, geological survey detail of the area.
      3. When the mined gold is purchased all its mandatory documents must be checked to ensure that the gold has come from the said mine.
    2. Dore import
      1. If material is from high risk area or moved through high risk area , we will not import gold Dore, without following the CAHRA guidelines or such sourcing
      2. Import from countries that have a proper controlled channel to export gold.
      3. KYC to include interest in other companies to check if the have interest in CAHRA regions.
      4. Would ensure that the miner / exporter is following the rules of the country from which the Dore is been exported. Also, would ask them to provide the copies of government approval for mining or export.
      5. Self-declaration from the supplier to check if they procure gold from ASM. If yes, then the details of the precautions they take to ensure that the gold is not Conflict Affected. Also, we will procure the artisanal gold only from countries where the government has proper control channel for such exports.
      6. Following documents will be checked
        1. Airway bills
        2. Customs Clearance documents
        3. Invoices
        4. Country of Origin Certificate or similar document
        5. Packing list from the Mining company or Aggregator
        6. Assay certificate from the mining company/ Authorised Laboratory of the mining company / Aggregator
    3. Refined bullion
      1. When the supply is of refined bullion it would be ensured that that it has come from a reputable refiner which is a Responsible smelter or is in the process of becoming Responsible smelter under various programmes.
      2. Supplier to provide necessary certificates along with the bars to help record the details of bars sold
      3. Further it would checked base on market information on how the bullion dealer obtains the material. If large portion of purchase is from non banking channels then the same would be considered as a red flag.
    4. Old gold
      1. A self-declaration from the Counterparty stating that it’s a gold in their possession is not from Conflict Affected Areas.
      2. Keep in record a photograph of the jewellery or scrap before starting the refining process. However if the client dose not give permission then donot.
      3. If the value of the recycled gold is more than Rs 10,00,000 per transaction, then approval will be obtained from the Directors prior to processing the payment.
      4. On eye would be look at the pattern and overall volume of sales of such old gold from a supplier. If there is an unexplainable spike it would be investigated before additional purchases.
    5.  Gold Chemical Supplier
      1. RMI conformance or,
      2. A self-declaration from the Counterparty stating that it’s a gold in their possession is not from Conflict Affected Areas.
      3. OR Due diligence of the supply of gold used for manufacturing the chemical must be carried out to ensure that the Gold has come from a reputable refiner which has or is in the process of becoming Responsible smelter under various programmes.
  4. In addition, a sufficiently senior person would be appointed as an Audit and Compliance Officer. The Compliance Officer shall ensure compliance with the provisions of this Policy and the same shall be notified to the Designated Persons.
    1. All reports, complaints, doubts or concerns in relation to this Policy shall be raised by the Designated Persons to the Compliance Officer.
    2. In addition, the compliance officer would take regular review of the supply chain and steps to mitigate the risk involved with the same. These periodic reviews will be carried out at least once a quarter and the findings will be reported to the board of Directors.
    3. Regular risk-based review would be carried out of the Gold suppliers such as updated news and other information to understand if risks are involved in working with them.
    4. Any supplier with whom majority of the purchase are done, a senior management or compliance officer would make a formal or informal visit to check the organization and whether they are any increased risk. If any risk factors are identified which had escaped our regular due diligence, such factors would be highlighted, and corrective actions taken.
  5. Avoid Suspicious Transaction
    • Designated staff will be trained to identify suspicious transaction and take steps to avoid the same. The red flags would be
      1. Failure to provide one's minimum KYC documents
      2. Request for dealing in cash
      3. Transactions that look way beyond the person means or average
      4. Failure to provide required declarations
      5. Calculation of purchase cost shows additional misc.
      6. Cost whose percentage is out of norm.
      7. The supply chain looks overly complicated and opaque. This could be signs of layering.
      8. Volume and rate offered dose not seem plausible.
  6. Handling of Suspicious Transactions
    1. If a suspicious transaction is suspected in which the company it involved voluntary or involuntary it should be reported to the Compliance Officer or the immediate manager with the enough details of the transactions. The reporting manager is required to pass on the information to the designated officer.
    2. The designated officer is required to conduct investigation to the best of his ability to check the geniuness of transactions by requesting additional information as may seem nesscary. The information may be gathered by calling the supplier and discussing with him.
    3.  Should we suspect or have reasonable grounds to suspect that the funds or the precious metals are the proceeds of a criminal activity, or are related to terrorist financing he should promptly report to the directors
    4. The board would authorise the handling of the case to the appropriate Government agency only if it falls as a crime in the law
  7. The compliance officer would ensure that
    1. Periodic audits and reviews are done of the process followed,
    2. The supply chain is Mapped and analyzed for the risk involved and implementthe changes.
    3. He shall report his findings and recommend action to the Board of Directors

NOTE: The above policy is implemented with effect from 19 May 2023.