Dodd-Frank Bill Contains Provision that May Lead to Tracking of All Gold Coins

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The Dodd-Frank
Financial Reform Bill contains a provision that requires companies
buying gold and other minerals to submit an annual report outlining
what they are doing to ensure their minerals are "conflict-free."

Most of the
focus on this provision, to date, has been on the ramifications
for high tech companies such as Apple and Intel. But the provision
goes beyond the minerals used in high tech equipment, such as cobalt,
copper and tantalum. Gold is also on the list.

The Bill requires
that manufacturers report where they purchased their minerals to
ensure that they have not been purchased from "conflict zone"
countries, which include Congo and neighboring countries.

The concept
of conflict-free began with diamonds mined in a war zone and sold
to finance an insurgency, invading army’s war efforts, or a warlord’s
activity. The idea being that the purchase of diamonds from such
war zones should be illegal, ostensibly to stop the financing of
the wars. It is believed by observers of the diamond industry, such
as Edward J. Epstein, that DeBeers
was behind the idea of conflict-free diamonds
as a way to limit
the supply of diamonds that come on the market. Nevertheless the
concept took hold.

According
to Wikipeida:

On July
19, 2000, the World Diamond Congress adopted at Antwerp a resolution
to strengthen the diamond industry’s ability to block sales of
conflict diamonds. The resolution called for an international
certification system on the export and import of diamonds, legislation
in all countries to accept only officially sealed packages of
diamonds, for countries to impose criminal charges on anyone trafficking
in conflict diamonds, and instituted a ban on any individual found
trading in conflict diamonds from the diamond bourses of the World
Federation of Diamond Bourses. The Kimberly Process was led by
the diamond-producing African countries themselves.

On January
17–18 of 2001, diamond industry figures convened and formed
the new organization, the World Diamond Council. This new body
set out to draft a new process, whereby all diamond rough could
be certified as coming from a non-conflict source.

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the rest of the article

July
27, 2010

2010
Economic Policy Journal

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