Precious Metals Refinery Due Diligence

Precious metals refinery due diligence is the process of checking a refiner’s accreditation, sourcing policy, controls and records before you send material or buy from its output. It protects you from counterfeit, unlawfully sourced or poorly documented metal.

Check accreditation and status

Confirm the refiner is currently listed on recognised standards, and check for any recent suspension, incident review or change of ownership. Status can change, so check the live listing rather than an older copy.

Review the sourcing policy

A credible refiner has a written sourcing policy that covers know-your-customer checks, source verification and the handling of high-risk material. Ask how the policy is applied in practice and what happens when a supplier fails a check.

Test the controls

Ask how material is received, weighed, assayed and tracked through the refinery. Good controls produce a clear record of each batch from receipt to output, and they should be able to explain any discrepancy.

• Verify accreditation on the current list.
• Request the written sourcing and anti-money laundering policies.
• Ask for a sample batch record and assay certificate.
• Confirm how discrepancies are reported and resolved.

Record the outcome

Keep a dated file with the checks you carried out and the evidence you received. This record is useful for your own governance and for any later audit or compliance review.

Red Flags to Watch For

Be cautious of a refiner that cannot name its accreditation, refuses to provide its sourcing policy, gives vague answers about batch records, or pressures you to decide quickly. Discrepancies between the weight declared and the weight received, and certificates that do not match the material, should also be treated seriously.

Ongoing Monitoring

Due diligence is not a single event. Recheck accreditation status at each new engagement, review any changes in ownership or policy, and keep a note of any incidents reported in the press or by industry bodies. A short annual review is usually enough for established relationships.

Reporting Findings to Your Board

Due diligence is only useful if its results reach the people who make decisions. Summarise the checks you carried out, the evidence you reviewed, any open issues and the conditions you attached to the relationship. A short written report to the board or investment committee makes the decision traceable.

Record any decision to proceed despite an open issue, along with the reasons. This record matters if the relationship is later questioned.

Next steps