The LBMA Good Delivery List and the Borsa İstanbul Refinery List

When Turkish foreign exchange legislation (kambiyo mevzuatı) lists the standard unprocessed precious metals that may be bought and sold domestically, it refers, for non-resident refineries, to the Refinery List published by Borsa İstanbul A.Ş. That list, in turn, is built on the Good Delivery List of the London Bullion Market Association. In this way, a private standard enters Turkish legislation indirectly.

The chain has three links: Article 7 of Decree No. 32 on the Protection of the Value of Turkish Currency (32 sayılı Karar) the Borsa İstanbul Refinery List the LBMA Good Delivery List. The Exchange itself states that its list is reproduced under a licence obtained from the LBMA. This structure is a link that a lawyer working in the precious metals trade should not overlook.

How Does the Legislation Refer to the List?

Sub-paragraph (a) of the fourth paragraph of Article 7 of Decree No. 32 provides that only standard unprocessed precious metals produced by the General Directorate of Mint and Stamp Printing House (Darphane), by refineries granted an operating licence (faaliyet izni) by the Ministry, and by non-resident refineries included in the Refinery List published by Borsa İstanbul A.Ş. may be bought and sold domestically.

Sub-paragraph (e) of the same paragraph determines from which actors persons resident in Türkiye (Türkiye'de yerleşik kişi) may buy these metals and to which they may sell them: banks, refineries granted an operating licence by the Ministry, precious metals intermediary institutions (kıymetli madenler aracı kuruluşu), authorised institutions (yetkili müessese) and jewellery businesses authorised by the Ministry of Trade. Here too, the same list requirement applies on the producer side.

Accordingly, standard unprocessed precious metal produced by a foreign refinery that is not on the list falls outside the circle recognised by the legislation as regards domestic purchase and sale. The list is not a technical annex; it is a tool that defines scope.

What Is the Exchange's List Based On?

The list published by Borsa İstanbul covers gold, silver, platinum and palladium refineries and divides the refineries for each metal into categories: those also included in the LBMA Good Delivery List, domestic refineries not on that list, those included in the Good Delivery Former List, and those removed from the Exchange's refinery list.

The list's own disclaimer is also legally significant: the inclusion of a refinery in the list is not to be regarded as a statement or guarantee by the LBMA concerning that refinery's credibility or the goods and services it supplies. The list is not a quality assurance; it is a record of technical acceptance.

What Are the Conditions for Good Delivery Accreditation?

Accreditation is open only to refiners, and five conditions must be met together. The applicant must have been in existence for at least five years and must have been refining the metal for which it applies for at least three years.

The second condition is the scale of production: annual refining output must not be less than 10 tonnes for gold and 50 tonnes for silver. The output need not be in the form of standard bars. The third condition is financial: tangible net worth must not be less than the equivalent of GBP 15 million.

The fourth condition is that the ownership structure, financial position and reputation meet the due diligence tests applied in the Loco London market. The fifth and last condition is that the applicant implements the LBMA Responsible Sourcing Programme. Unless these five conditions are met together, a favourable assessment of the application is not to be expected.

How Do the Process and the Fees Work?

The process consists of two testing stages: a stage in which the assaying accuracy of the applicant's laboratory is tested, and a stage in which the applicant's own bars are tested. The fee for each stage is paid in advance; if the applicant does not proceed to the next stage, no part of the fee paid is refunded, but the fee for the next stage does not fall due either.

In addition to the application fee, an annual maintenance fee applies, and maintaining accreditation depends on this payment. Fees are reviewed every year; the maintenance fee rises by at least the year-end rate of inflation. Before applying, a limited number of self-test samples may be purchased so that the laboratory can test its own accuracy; failure to report the assay results for these samples within six weeks may result in the rejection of a later application.

Oversight continues after accreditation: under proactive monitoring, supervised sampling is carried out and the refinery's assaying proficiency is re-examined every three years.

Why Is the Responsible Sourcing Programme Mandatory?

All refineries on the Good Delivery List must comply with the LBMA Responsible Sourcing Programme. The programme is based on an annual independent audit and public reporting; the audits are carried out by assurance providers approved by the LBMA.

This is an area that overlaps with practice in Türkiye. Borsa İstanbul has adopted rules based on the OECD's guidance on responsible supply chains of minerals from conflict-affected and high-risk areas (CAHRA). The documents and reports a refinery produces under the LBMA programme and its responsible supply chain obligations in Türkiye draw on the same database; designing the two regimes separately creates unnecessary cost.

What Is the Consequence in Türkiye of Being Removed from the List?

A separate category of the Exchange's list consists of refineries included in the LBMA's Former List; this category shows that accreditation is not permanent. The Turkish company on that list is Atasay Kuyumculuk: according to the entry in the Exchange's list, it joined the LBMA list on 7 May 2010 and left it on 6 April 2016.

The same company has also been removed from the Exchange's refinery list: its date of entry into the Exchange's list is 16 April 2009 and its date of removal is 23 June 2022. On the silver side, Eti Gümüş A.Ş. joined the Exchange's list on 2 September 2009 and left it on 28 March 2023.

The legal consequence differs according to where the refinery is resident. The product of a domestic refinery granted an operating licence by the Ministry may be bought and sold domestically on the basis of that licence. For a non-resident refinery, however, the basis is the list itself: removal from the Good Delivery List may affect its position on the Exchange's list and, consequently, the product's scope for domestic purchase and sale in Türkiye. The absence from supply contracts of a clause on maintaining the refinery's position on the list leaves this risk with the buyer.

Who from Türkiye Is on the List?

Borsa İstanbul's list shows İstanbul Altın Rafinerisi A.Ş. and Nadir Metal Rafineri San. ve Tic. A.Ş. as the Turkish gold refineries also included in the LBMA Good Delivery List. The same two companies also appear on the silver side.

Ahlatcı Metal Rafineri, Onsa Rafineri, İsgold Altın Rafinerisi, Gram Altın Pazarlama and Garanti Rafineri ve Maden İşletmeleri are listed as domestic gold refineries not included in the LBMA list; for silver, Ahlatcı, Onsa and Gram Altın Pazarlama are listed. There is no company from Türkiye among the platinum and palladium refineries.

What Should Be Done?

• In domestic purchases and sales, confirm before the transaction the position of the refinery that produced the metal on the Borsa İstanbul Refinery List.
• Obtain the current version of the list from Borsa İstanbul; refineries may move between categories.
• Add to the supply contract a clause on maintaining the refinery's position on the list for the term of the contract.
• If you are a refinery, assess the five conditions together before applying for Good Delivery; if one is missing, do not put the application fee at risk.
• If you have purchased self-test samples, report the assay results within the six-week period.
• Design your responsible sourcing reporting under a single roof with the Borsa İstanbul rules; do not set up two separate systems.
• Base your commercial assessments on the fact that inclusion in the list is not regarded by the LBMA as a guarantee of credibility.

Warning. The information in this article is for general information purposes and does not constitute a legal opinion. Foreign exchange and precious metals legislation is a frequently changing area; the amounts, rates, thresholds, time limits and dates in this article may change in line with the legislation in force. Verify the latest version of the legislation before every application and transaction. Current texts are available at mevzuat.gov.tr.

Source: Decree No. 32, Article 7(4)(a) and Article 7(4)(e) · Borsa İstanbul A.Ş., List of refineries whose bars, bullion and granules may be traded on the Precious Metals and Precious Stones Markets · LBMA, About Good Delivery · LBMA, How to apply for Good Delivery accreditation · LBMA, Responsible Sourcing Programme · OECD, Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas

Related page: Refineries