Transaction of Precious Minerals Proclamation No.651./2009

 A PROCLAMATION TO PROMOTE AND REGULATE TRANSACTIONS OF PRECIOUS

MINERALS

WHEREAS, the promotion and regulation of transactions of precious minerals require a separate legal frame work;

NOW, THEREFORE, in accordance with Article 55(1) of the Constitution of the Federal Democratic Republic of Ethiopia, it is hereby proclaimed as follows:

PART ONE

GENERAL

1. Short Title

This Proclamation may be cited as the “Transaction of Precious Minerals Proclamation No.651./2009”.

2. Definitions

In this Proclamation unless the context requires otherwise:

1/"precious minerals'' means metals such as gold, platinum and silver and precious and semi-precious stones (gem stones) such as diamond, rubies, emeralds, sapphires, opal, and includes other minerals as the Ministry may, by directives, so designate;

2/"transaction'' means any activity related to the purchase, custody, transport, crafting, refining, sale or export of precious minerals or products of precious minerals for commercial purposes;

3/“crafting” means the processing of precious minerals into finished products by means of smothery or lapidary;

4/“smithery” means smelting, molding and other similar activities of metallic precious minerals to the end product for the use of customers;

5/“lapidary” means the cutting, molding, polishing and any other similar activities carried out on precious stones to shape them to be ready for use;

6/“refining” means the process of taking out of impurities or separation of different associated metals from any metallic precious minerals to increase their carat amount or purity;

7/“personal use” means the custody, transport, export or import of precious minerals by individuals for non commercial purposes which are in their final shape ready for ornamental purposes which may not exceed:

a)100 grams for gold and other precious metals;

b)30 grams for precious stones;

c)100 grams for semi precious stones.

8/“license” means any precious minerals transaction license issued pursuant to the provisions of this Proclamation;

9/“licensing authority” means the appropriate regional organ with respect to the licenses referred to in sub-article (1) of Article 5 of this Proclamation and the Ministry with respect to the licenses referred to in sub-articles (2) and (3) of the same Article;

10/“Ministry” means the Ministry of Mines and
Energy;

11/ “region” means any Regional State referred to in Article 47 of the Constitution of the Federal Democratic Republic of Ethiopia and includes the Addis Ababa and Dire Dawa city administrations;

12/“Bank” means the National Bank of Ethiopia;

13/“budget year” means the budget year commencing from July 1st and ending June 30th according to the Ethiopian Calendar;

14/ “person” means any natural or juridical person;

15/ any expression in the masculine gender includes the feminine;

16/ “Certificate of Competence” means a permit issued by the Ministry to approve the capability of an applicant for trade license.

3. Scope of Application

1/ This Proclamation shall apply to govern the conduct of all transactions of precious minerals with in the territory of Ethiopia.

2/Any person who has been issued a licensee in accordance with the appropriate mining laws is not required to have a certificate of competence or license pursuant to this Proclamation in order to sell locally or export abroad the precious minerals it produces.

PART TWO

PRECIOUS MINERALS TRANSACTION LICENSES

AND CRTIFICATE OF COMPETENCES

4. Requirement of License and Certificate of Competence

No person shall carry out the transaction of precious minerals unless he is registered in the appropriate government office and is a holder of an appropriate and valid license or Certificate of Competence as appropriate.

5. Types of Licenses

The following licenses may be issued pursuant to this Proclamation:

1/ precious minerals brokerage license;

2/ precious minerals crafting license;

3/ precious minerals refining license.

6. Types of Certificate of Competence

The following Certificate of Competence may be issued pursuant to this Proclamation:

1/ Precious Mineral Trade Certificate of

competence,

2/ Precious Mineral Export Certificate of
Competence.

7. Precious Minerals Brokerage License

A precious minerals brokerage license grants to the holder of the license the right to purchase, hold for sale purposes, transport and forthwith sale precious minerals locally.

8. Precious Minerals Crafting License

A precious minerals crafting license grants to the holder of the license the right to purchase, hold and transport precious minerals in an amount to be specified by directives of the Bank, carry out smothery or lapidary and sale its product locally or abroad pursuant to the directives of the Bank. The holder of such License may engage in purchase or maintenance of used or broken or damaged jewelleries and report periodically every month about its activities.

9. Precious Minerals Refining License

A precious minerals refining license grants the license holder the right to engage in refining precious metallic minerals produced locally or imported.

10. Precious Mineral Trade Certificate of Competence

A holder of the Precious Mineral Trade Certificate of Competence upon acquiring the proper trade license from the appropriate government body grants to the holder of the License the right to purchase in bulk and retail sale of finished precious minerals locally.

11. Precious Mineral Export Certificate of Competence

A Precious Mineral Export Certificate of Competence upon acquiring the Trade License from the appropriate government body grants to the holder of the Certificate the right to purchase, custody, and Export the following precious minerals pursuant to the directives of the Bank:

a) gold and silver which are in their final shape,

b) other precious minerals other than gold and silver in raw, semi processed or in their final shape.

12. Eligibility for License and Certificate of Competence

1/ Any person who qualifies to carry out trade in accordance with the Commercial Code of Ethiopia or a cooperative society established in accordance with the appropriate law and satisfies the requirements of license or Certificate of Competence set out in this Proclamation and regulations and directives issued for the implementation of this Proclamation may acquire any license referred to in Article 5 of this Proclamation or a Certificate of Competence referred to in Article 6 of this Proclamation.

2/ Notwithstanding the provisions of sub-article (1) of this Article:

a)the licenses referred to in sub-article

(1) of Article 5 and the Certificate of competence referred in sub-article (1) of Article 6 of this Proclamation may not be issued to foreign investors;

b)no person whose license has been revoked pursuant to this Proclamation may hold another license for two years following such revocation;

c)any person who has been granted with Certificate of competence in accordance with Article 6 of this Proclamation may acquire a License from the appropriate government body upon fulfillment of the requirement set for such License.

13. Application for License

An application for license shall be made in writing and contain the following.

1/ Where the application is for Precious
Mineral Brokerage License:

a) name, address, and nationality of the applicant,

b)the type of precious minerals he/she wish to engage,

c)demonstrate his technical capacity or experience in the area of precious mineral identification,

d)the location of the areas where he/she would be collecting the precious minerals,

e)business plan to be performed during the license period.

2/ Where the application is for Crafting
License:

a)items specified under (a) and (b) of sub-article (1) of this Article,

b)financial and technical preparation as regards the production of jewelers products,

c)business plan including waste management.

3/ Where the application is for Precious Minerals
Refining:

a)items specified under (a) and (b) of sub-article (1) of this Article,

b)financial and technical preparation to build a refining facility,

c)business plan including  waste management

14. Application for Certificate of Competence

An application for Certificate of Competence shall be in writing and contain the following.

1/ Where the application is for Precious

Mineral Trade Certificate of Competence:

a)items specified under (a) and (b) of sub-article (1) of Article 13 of this Proclamation,

b)demonstrates his or his employees technical capacity or experience in the area of precious minerals property identification,

c)shown to have the proper testing machine or mechanism to prove to consumers or customers the quality of the precious minerals he wish to trade,

d) proper business location with the required preparation to trade precious minerals,

e) business plan.

2/ Where the application is for Precious Minerals
Export Certificate of Competence:

a)items specified under (a) and (b) of sub-article (1) of Article 13 of this Proclamation,

b)demonstrates his or his employees technical capacity or experience in the area of precious minerals property identification,

c)legal source of the precious minerals he wish to export,

d)if he is engaged in the crafting of precious minerals, shall present his appropriate license number,

e)if known to him at the time of application, his potential markets or any contractual commitment entered,

f)business plan.

15.Issuance of License and Certificate of Competence

The licensing authority as appropriate may issue a license or a certificate of competence after ascertaining that the applicant has fulfilled the requirements of the license or the Certificate of Competence and upon payment of the prescribed license fee.

16. Validity Period of License and Certificate of Competence

All licenses or Certificate of Competence shall be valid for one year from the date of issuance.

17. Renewal of License and Certificate of Competence

1/All licenses or a Certificate of Competence may be renewed every year for similar periods if the licensee or the holder of the Certificate of Competence as appropriate meets all requirements in connection with the application for renewal and is not in breach of any provision of this Proclamation or regulations or directives issued for the implementation of this Proclamation which constitutes grounds for the revocation and upon the payment of the prescribed fee.

2/All License or Certificate of Competence shall be renewed at the end of every license period.

3/Any licensee or holder a Certificate of

Competence who wishes to renew his license shall produce tax clearance certificate for the then budget year.

18. Obligation of Licensees

1/ Any licensee shall:

a) maintain books and records regarding precious minerals purchased, deposited, processed, sold or exported;

b)report all transactions carried out to the licensing authority within 30 days from the end of each budget year;

c) comply with all operational, safety and health standards set forth by the Ministry or other appropriate government authorities;

d) may not hoard precious minerals more than permitted by directive,

2) The holder of a precious minerals brokerage license:

a)shall in every budget year, supply gold and silver to the Bank in an amount determined by agreement,

b)without prejudice to the provisions of paragraph (a) of this sub-article, sell other precious minerals locally to appropriate legally licensed persons,

c)may not process or carry out smithery or lapidary or export of precious minerals,

d) shall prove the legal source and area of production of the precious mineral he carries on brokerage.

3) The holder of a precious minerals crafting license may:

a) not buy raw gold and silver from any source other than the Bank;

b) not transfer the gold and silver it buys from the Bank to any other person in its raw from;

c) where the crafting is precious minerals other than gold and silver make sure that the source of the raw precious mineral is legal;

d) put an identifiable mark of its own on each precious mineral product it produces;

e) make sure that all customers identify the mark, know or understand the quality and quantity of the product it produces before buying and provide written proof to that effect;

f) may not engage in the refining of precious minerals;

g. where it has gold and silver above the amount permited by directive, it shall have to sell to the Bank.

4) The holder of a Precious Minerals Refining License may not engage in:

a) carry on smithery of precious minerals;

b) bulk or retail sale of precious minerals;

c) communicating wrong information.

19. Obligation of the Holder of Certificate of Competence

1/ Any holder of Certificate of Competence may not hoard precious minerals.

2/ The holder of Precious Mineral Trade
Certificate of Competence shall:

a) upon receipt of products for retail make sure that all product it receives has got the proper mark of the Precious Mineral Craft Licensee,

b) not alter or other wise blend with other types of mineral the precious mineral brought for retail sale from the Precious Mineral Craft License holder,

c) make sure that the customer able to understand the quality and quantity of product it sales and provide proof to that effect,

d) not carry out brokerage, smithery or lapidary.

3) The holder of Precious Mineral Export Certificate of Competence:

a) when the export is raw precious mineral, shall have to demonstrate the legal source of the raw precious mineral;

b)when the export is finished or semi finished precious mineral apart from demonstrating the legal source, shall be required to show the name and license number of the licensee who/which processed the minerals;

c)shall present the laboratory approval on the quality and quantity of the precious mineral to be exported;

d)shall respect all the Bank laws, regulations and directives upon export of the precious minerals;

e)may not carry out smithery or lapidary;

f)where his exports are gold and silver, it shall be processed and in the final shape.

20. Transfer of License

1/The business of refining, crafting, license may be transferred or inherited with the prior notification of the licensing authority.

2/The business of precious minerals brokerage license may not be transferred or inherited.

3/The appropriate trade registration and license law shall be applicable to the transfer of Precious Minerals Trade and Export licenses.

21. Revocation of License and Certificate of Competence

1) A license issued pursuant to this Proclamation may be revoked where the holder of the license:

a) obtained the license or the Certificate of Competence on the basis of providing false information;

b) fails to renew the license or the Certificate of Competence within the prescribed time limit;