Gold regulations in Bahrain: not so golden
Gold traders in Bahrain claim bureaucratic delays that allegedly started before Ramadan are costing them both time and money, a report said.
They complained it was now taking three weeks or more for authorities to certify gold bars and jewellery, a process that would earlier take less than 10 days, according to the report in the Gulf Daily News, our sister publication.
Gold merchants singled out the delays as a major cause for concern yesterday during a meeting at the Gold Souq, in Manama, to discuss problems facing the industry.
"This is a big problem that has increased in the past two months," said Bahrain Chamber of Commerce and Industry gold and pearl jewellery committee chairman Mohammed Sajid Shaikh.
"Gold items are taking a long time to be hallmarked at the Assay Office.”
He claimed traders were losing customers because of the delays, but were still paying overheads such as staff wages and rent - even though their revenues were being affected.
"For example, a trader still has to pay the goldsmiths even if they are not doing anything because gold bars have not been delivered on time," he said.
He added that if merchants who supplied gold to other jewellers faced delays in getting the precious metal certified, there was a domino effect on the whole sector.
"Traders cannot supply hallmarked bars to the market because of the delays, which means the entire chain is affected," said Shaikh. "During this whole process they lose customers while still paying overhead costs and wages."
He claimed delays in hallmarking gold could be traced back to the Industry and Commerce Ministry's Assay Office.
Some traders claimed they were still waiting for certified gold from the office despite submitting it to the Assay Office before Ramadan.
One trader claimed the office was now accepting just two parcels from each trader a day, each containing no more than 60 gold items to be certified.
"We pay a fee of 30 fils ($0.08) per gram to get our items stamped so that we can sell them here, which is high compared to 10 fils ($0.026) per gram in Qatar," he said.
"Yet we can submit only two parcels and wait for weeks until they are cleared."
Another complained that traders had to queue to submit gold items to be certified and many simply gave up.
"They have only one counter and hundreds of people are queuing daily to submit their gold items," he said. "Many leave with their jewellery as they cannot submit it. There has to be proper security."
Shaikh told the GDN that complaints about delays had been lodged with the ministry, which blamed the problem on a shortage of staff.
"I think this department needs to be revamped," he said. "This includes increasing the number of testing laboratories and even allowing private players authorised by the government to step in."
Meanwhile, he said traders also reported that items submitted to the office sometimes came back 0.2mg lighter after being hallmarked.
"No one questions these officials because they tell workers to bring their employers if any complaint of gold losses is made," he said.
"But this 0.2mg of gold items, when multiplied by the hundreds of items submitted daily, could be worth over BD20,000 ($52,750)."
During the meeting, a call to establish a high-level committee to support and develop the jewellery sector was also made - particularly after protests in and around the Manama suq drove away customers.
"The gold and jewellery sector that contributes to the Bahraini economy has been neglected for years, which is a shame," said Shaikh. "If we continue to be neglected, I am afraid many traders will leave Bahrain and shift their businesses to neighbouring countries, as they did between 1986 and 1990."
Industry and Commerce Ministry officials could not be reached for comment yesterday (August 25), the report said.
- No plastic! Why Samsung got 'a lot right' when it comes to the new S6
- Microsoft exec: Lebanon needs wider broadband
- One more reason to hate it: feelings of envy on Facebook lead to depression
- A healthy innovation: how Apple's new healthcare app is slowly taking over hospitals
- As Europe shuts its doors to its technology, Israel 'takes flight' to Asia