According to this resolution, domestic jewelry manufacturers will be able to purchase precious metals at a 2% discount from the fixing of the London Bullion Market Association.
The Ministry of Finance has been tasked with ensuring funding for the implementation of the new procedure.
Additionally, it has been established that purchasing points and pawnshops dealing with precious metals and stones may sell jewelry and scrap precious metals to the authorized state body, with the exception of items made from them.
Control over compliance with the resolution will be carried out by the Office for Control of the Execution of Presidential Decisions, the Cabinet of Ministers, and the Presidential Administration.
The resolution comes into effect 10 days after its official publication.
Procedure for the Sale of Precious Metals
to Domestic Jewelry Manufacturers
Chapter 1. General Provisions
1. This Procedure for the Sale of Precious Metals for Domestic Jewelers (hereinafter referred to as the Procedure) has been developed in accordance with part 4 of Article 6 of the Law of the Kyrgyz Republic "On Precious Metals and Precious Stones" and defines the rules for the sale of precious metals to jewelry manufacturers using them to create jewelry and other items on the territory of the Kyrgyz Republic.
2. The following terms are used within the Procedure:
– refined standard bars – certified bars of gold or silver that meet international quality standards established by the London Bullion Market Association;
– refined measured bars – bars of precious metals (gold, silver, platinum) weighing up to 1000 grams, with a content of pure metal of at least 99.90% for gold and silver, and at least 99.95% for platinum;
– refined precious metals in non-standard forms – precious metals in any forms and sizes differing from standard bars;
– tax authority – subdivisions of the authorized tax authority;
– jewelry manufacturers – legal entities and individual entrepreneurs engaged in the production of jewelry;
– raw materials – refined precious metals, jewelry, and their scrap provided to manufacturers;
– authorized state body – the body responsible for implementing state policy in the field of circulation and accounting of precious metals.
Chapter 2. Procedure for the Sale of Raw Materials
3. The objects of sale will be refined precious metals in the form of measured and standard bars, as well as in non-standard forms, jewelry, and their scrap.
4. The sale of raw materials from the State Fund of Precious Metals and Precious Stones of the Kyrgyz Republic (hereinafter referred to as the State Fund) will be conducted for jewelers in the national currency at the exchange rate of the National Bank based on the fixing of the London Association on the day preceding the transaction.
5. Jewelers will be granted a 2% discount from the fixing of the London Association during the sale of raw materials.
6. The authorized state body will sell raw materials based on a list of manufacturers provided by the tax authority.
7. The list of jewelers entitled to receive raw materials from the State Fund is updated annually by August 1.
8. Based on this list, the authorized body forecasts the needs for raw materials for the following year and sends a consolidated request to the Ministry of Finance by September 1 of the current year.
9. The tax authority is responsible for the accuracy of the information and control over the use of raw materials.
10. Jewelry manufacturers must submit an application in paper and/or electronic form indicating:
applications for raw materials without payment deferral;
applications for raw materials with payment deferral of up to 180 days.
11. The release of raw materials is carried out:
without payment deferral – after full payment within 3 working days;
with payment deferral – after signing the contract and providing a bank guarantee within 5 working days.
12. The Ministry of Finance allocates budgetary funds for the purchase of raw materials for the relevant financial year based on the consolidated request.
Chapter 3. Conditions for Providing Raw Materials
13. The authorized body forms a list of manufacturers for the receipt of raw materials not exceeding 50 kilograms and provides it in an amount not exceeding 5 kilograms monthly.
14. The provision of raw materials is possible under the following conditions:
registration for special accounting;
availability of safe production premises;
conditions for the targeted use of raw materials;
provision of financial reporting for the last year;
availability of a production plan;
compliance with the rules for accounting and storage of precious metals;
bank guarantee in case of payment deferral;
absence of tax arrears.
15. In the case of deferred payment, the sale of raw materials is carried out only after full settlement for previously received raw materials.
16. The sale is carried out based on a sales contract without the possibility of extension.
17. Jewelers are obliged to manufacture products within 35 days after receiving raw materials and undergo the necessary procedures.
If the raw materials are not fully utilized, the remainder is returned to the State Fund according to the contract.
18. In the case of a deferred payment contract, a bank guarantee must be provided.
19. In case of violation of the deadlines for using raw materials, the jeweler is liable and pays a penalty for each day of delay.
20. Raw materials are not provided in the following cases:
untimely submission of documents;
failure to fulfill obligations for previous deliveries;
absence of the required volume of raw materials at the time of application.
21. In case of late payment, the authorized body may demand enforcement from the bank guarantee.
22. Jewelers must submit a monthly report on the use of raw materials in the established format.
23. Upon cessation of activities, the jeweler must pay the full cost of the purchased raw materials within 10 days.
24. The sale of precious metals to support jewelers may occur at exchange auctions in accordance with the legislation.
Chapter 4. Control and Responsibility
25. During tax control, if violations are identified, such as improper use of raw materials or discrepancies in reporting, measures of liability are provided.
26. The following measures may be applied for identified violations:
prohibition on the issuance of raw materials;
seizure of previously issued raw materials;
cancellation of registration;
recovery of the difference in the cost of raw materials.
Chapter 5. Fulfillment of Obligations
27. Jewelers are obliged to comply with the terms of the contract and are responsible for the targeted use of raw materials.
28. Obligations must be fulfilled on time in accordance with the contract and civil legislation.
29. Jewelers may fulfill their obligations ahead of schedule if this does not contradict the terms of the contract.
30. Payments not settled on time are considered overdue from the next day.
31. Accrued amounts of interest and penalties must be reflected in the documents sent to jewelers.
32. Payment of debts is carried out through the treasury system.
Chapter 6. Methods of Ensuring the Fulfillment of Obligations
33. The fulfillment of obligations may be secured by penalties, bank guarantees, and other means.
34. The conditions for applying penalties are determined by the contract.
35. In the case of improper fulfillment of obligations, the authorized body has the right to make claims against the bank guarantee.
Chapter 7. Final Provisions
36. The tax authority exercises control over the use of precious metals within its competence, according to the Tax Code and the Law "On Precious Metals and Precious Stones".
37. In case of improper use of precious metals, manufacturers are liable according to the specified measures.
