Exporting Gold From Ghana; The Need For Due Diligence
November 19, 2018
Ghana is endowed with abundant
natural resources, which have played a key role in the development efforts of
the country. Ghana has a long history of mining especially for gold. Gold is a
precious metal of high monetary value, sought after for the production of
coins, jewelry and other artifacts. It is an established fact, evidence by
records over the years that, gold is a major foreign exchange earner for
Ghana’s socioeconomic development.Over the years, Ghana’s stable economy and
abundance natural resources especially gold have attracted many foreign
entities and or individuals to develop strategic business partnerships with
local Ghanaian companies for the export of these resources. A lot of these
individuals have been cheated of their hard earned resources by unscrupulous
entities masquerading as licensed gold buying companies by regulators when in
fact they have no such license. This article is therefore intended to throw
light on the procedures and legislative framework established for the sale and
export of gold from Ghana.
It is important, following the
above warning for foreigners be it private individuals and incorporated
companies seeking to engage in gold purchase and export in Ghana to understand
that, this is a regulated industry. It is governed by laws with established
institutions mandated to ensure compliance. These institutions include the
Minerals Commission (MC) of Ghana and the Precious Mineral Marketing Company (PMMC)
among others.There is therefore the need for individuals and companies
(foreigners) to undertake due diligence before undertaking to engage local
Ghanaian entity or an individual for the purchase and export of gold. It is not
only advisable to undertake due diligence on the local entities and individuals
in Ghana but is imperative to avoid being scammed by unlicensed entities.
PRECIOUS MINERAL MARKETING
COMPANY (PMMC)
Precious Minerals Marketing
Company (PMMC) Ltd was established in 1963 as Ghana Diamond Marketing Board
charged with the sole responsibility for the purchase and marketing of Ghana’s
diamonds. In 1965, by Legislative Instrument (LI) 401, the Company was
incorporated as a State Owned Enterprise (SOE). With the promulgation of the
Diamonds Decree (NRCD 32) in 1972, Legislative Instrument (L.I 916) was enacted
to change the company’s name to Diamond Marketing Corporation. However, in
1989, Precious Mineral Marketing Corporation Law (PNDC Law 219) was enacted to
yet again change the Company’s name to the Precious Minerals Marketing
Corporation with the following functions
To grade, assay, value and process precious minerals
To buy and sell
precious minerals
To perform any
functions conferred upon it by the Diamond Decree, 1972 (N.R.C.D. 32)
To appoint licensed
buying agents for the purchase of precious minerals produced by small
scale-miners
To promote the
development of precious minerals and jewelry industry in Ghana
To do all such things as are incidental or conducive to the
attainment of its objectives and functions.
Finally in year 2000, it was
converted by Statutory Corporations Conversion to Companies Act, 1993 (Act 461)
to a Limited Liability Company to operate under the Companies Act, 1963 (Act
179) as PRECIOUS MINERALS MARKETING COMPANY LIMITED with the same functions
under the PNDC Law 219.The following has been the functions of the Company
until 2016 when most of the functions changed as a result of appointment of
PMMC as the government assayer.
Grading, assaying, valuing and
processing of precious minerals.
Buying and selling precious
minerals
Appointment of licensed buyers
for the purchase of precious minerals produced by small scale miners Production
of jewelry
To carry on trade and business
whatsoever which can in the opinion of the directors, be profitable ancillary
for the general business of the Company.
The Company now operates as Government’s
assayer with the sole mandate of assaying all gold which leaves the country.
DUE DILIGENCE
Due diligence should be
conducted in order to;
establish that the individual and
or entity (that is the local company) the foreign entity or individual intends
to engage for the purposes of gold purchase and export is licensed in Ghana,
andidentify all factors that will have an effect on the transaction.In any
case, any individual or entity must establish its own minimum level of comfort
and must conduct as much research as is necessary to achieve the level of
comfort before entering into gold purchase and export transactions in Ghana.
LICENCE TO BUY AND EXPORT GOLD
It is imperative to note that, in
Ghana an individual needs a licence to buy and deal in minerals. Therefore, the
export of gold out of the jurisdiction of Ghana can only be done under a
license by an entity. This is regulated under the Minerals and Mining Act, 2006
(Act 703). It provides among others that, the Minister in consultation with the
Commission may in writing licence persons the Minster considers fit, to buy and
deal in the types and forms of minerals identified under the Act. It must be
noted that, under the Act, mineral means a substance in solid or liquid form
that occurs naturally in or on the earth and include gold and diamond but does
not include petroleum resources as the latter is under a separate regulation.
It is important to further note that, Minister under the Act means the Minister
responsible for Mines and Natural Resources and reference to Commission means the Minerals Commission established
under section 1 of the Minerals Commission Act, 1993 (Act 450).
GUIDELINES FOR THE EXPORT OF GOLD IN GHANA
The Minerals Commission had
issued a directive and or procedures to govern the export of gold from Ghana.
The following procedures shall govern the exportation of gold by Licensed Gold
Exporters (LGE) other than the holders of mining leases. These measures issued
by the Minerals Commission shall be in force until substituted by other
procedures that may subsequently be prescribed. These include the following;
A Licensed Gold Exporter (LGE)
who intends to export gold shall inform the Precious Minerals Marketing Company
Limited (PMMC) in writing of its export plans at least two (2) working days
before the planned weekly export.The LGE shall submit the gold ore to be
assayed by PMMC at a designated assay center, together with all declaration
documents, Packing List and Invoice.The PMMC shall determine the gold content
of the gold ore presented by the LGE using the appropriate assay method as
agreed by the LGEs, Minerals Commission and the PMMC.The PMMC shall prepare a
report of analysis of the gold ore presented by the LGE and issue copies
instantly to the Bank of Ghana (BOG), the Ghana Revenue Authority Custom
Officer stationed at the Assay Centre and the Minerals Commission.The PMMC
shall invoice the LGE in respect of the assay at the agreed rate of 0.1% of the
value of gold assayed and the LGE shall pay same to PMMC. The payment of this
fee is without prejudice to any fee that may be charged by the Minerals
Commission.
All Gold Buying Agents of the
PMMC, prior to this publication, may continue to use their permits until the expiry
of the present term of the permit and same shall not be renewed by the PMMC
upon expiry. All such Gold Buying Agents should immediately contact the
Minerals Commission for further directions regarding the use of their permits.
All persons who desire to obtain permits for buying gold shall apply to the
Minerals Commission.The GRA Customs Official at the Assay Centre shall inspect
and supervise the sealing of the assayed gold ore with the Customs Division’s
seal and endorse the Customs Declaration Form. The sealing of the assayed gold
ore by the Customs Official shall be done in the presence of an authorized
representative of the Assay Centre who shall also affix the seal of the PMMC
Assay Centre at the same time. The LGE shall complete the required
documentation at the Kotoka International Airport (KIA) before exporting the
assayed gold.Under no condition shall gold ore be exported by LGE without the
seals of the Customs Division of the Ghana Revenue Authority and the Government
designated laboratory i.e. PMMC and accompanied with full documentation. All
LGEs shall submit monthly returns to Minerals Commission in accordance with the
terms and conditions of their licence agreements.
LOCAL LEGAL REPRESENTATIVE (LLR)
It is advisable for the foreign
entity to have access to legal representation prior to engaging in any gold
export business in Ghana. Not only will the legal representative conduct due
diligence on the Licensed Gold Exporter to ascertain that it is in fact
licensed and in good standing, he/she will also be expected to educate and or
proffer sound professional advice to the foreign entity on any changes in the
laws and regulations governing the purchase and export of gold in Ghana. Most
importantly, the legal representative shall police the processes leading to the
purchase and export of the gold to ensure that, the precise ounces and the
required purity of the mineral is shipped from the Republic to its intended
recipient. This timely legal advice must be obtained from a lawyer with
knowledge and working experience in gold trading business in Ghana. The Legal
Representative shall also be responsible for the formulation and the drafting
of an agreement to govern the transaction before any transfer of funds shall be
effected for payments. This eventually will help to secure the interest of the
parties to the transaction and ensure that their reasonable expectation is meet
at the end of the day.
LEGAL NOTICE
The contents of this publication,
current at the date of publication set out above, are for reference purposes
only. They do not constitute legal advice and should not be relied upon as
such. Specific legal advice about your specific circumstances should always be
sought separately before taking any action based on this publication.
Source:
https://legalstonesolicitorsllp.com/2