IT appears that precious metals will not be included in the new Scrap Metal Dealers (Amendment) Act if it reaches the statute book, as expected, later this year.
The position has remained unclear
since sponsoring MP Graham Jones told ATG back in November that
parliament might well consider including those dealing in bullion
and other precious metals, although there were no specific plans to
Now, however, it seems that if such
discussions have taken place the decision has been taken not to
widen the remit of the Bill, which has been drawn up to tackle
crime by removing cash transactions from the scrap
The draft Bill going through
Parliament seeks to amend the 1964 Scrap Metal Dealers Act, and it
is that Act that specifically excludes a number of precious metals
from the legislation.
Clause 9.3 of the 1964 Act defines
which metals can qualify as scrap and lists aluminium, copper,
iron, lead, magnesium, nickel, tin and zinc or… brass, bronze,
gunmetal, steel, white metal "or any other alloy of any of the said
However, Clause 9.4 of the Act adds
that "For the purposes of this Act, a substance being an alloy
referred to in the last preceding subsection shall not be treated
as being such an alloy if, of its weight, two per cent or more is
attributable to gold or silver or any one or more of the following
metals, that is to say, platinum, iridium, osmium, palladium,
rhodium and ruthenium".
In other words, truly precious metals
As the draft of the new Bill does not
deal with this area of the original Act, these original clauses
remain in law.
Brighton-based Michael Bloomstein, who
supplies ATG's weekly precious metal prices, had feared that any
measures taken to include registered bullion dealers like him under
the Act would have backfired in the fight against crime.
"Remember that although we pay cash
for items, when we sell we create a paper trail, effectively
bringing back precious metals into the system. Additionally, when
we buy precious metals, we pay VAT on behalf of the customer to
Customs and Excise - our VAT bill was a substantial amount for
silver alone in the last quarter. If you ban us from paying cash
for precious metals such as gold and silver, people will go
elsewhere, and that paper trail won't be created, and the VAT will
While the main trade in precious
metals should not be affected, the trade in recovering precious
metals from electronic scrap may well be as it is generally less
than 2% pure. This includes items such as gold-plated contacts and
switches from old computers, all gold-plated and silver-plated
items and also some jewellers' floor sweeps.
"Although the recovery of precious
metals from these items is usually a fraction of 1%, lower grade
recovery is in itself a multi-million pound business," Mr