The Department of Commerce and Supply Management has prepared new regulatory guidelines and quality standards for gold jewellery. As per the draft guidelines, the gold alloy used in making jewellery can contain up to 9 percent other metals.

Shambhu Koirala, director general of the department and the coordinator of the guidelines drafting committee, said they had finalized the draft and would be sending it to the Cabinet soon for its approval. “We have finalized the draft based on the consensus of traders, particularly on the issue of using binding substances while making jewellery.”

The department had planned to introduce the guidelines three years ago but failed to do so. The need for guidelines was felt after the government found a number of traders cheating customers. Adulteration of the gold used in jewellery has been rampant in the market for lack of regulatory measures.

The department had found Shree Ganapati Jewellers, Tejmin Jewellers and RB Diamonds being involved in misconduct during a market inspection, and had recommended action against them.

Traders had protested against the department’s regular inspection, calling it harassment and pulled down their shutters. Jewellers have been demanding that the government first create standard monitoring guidelines before monitoring the bullion business.

Mani Ratna Shakya, president of the Federation of Nepal Gold and Silver Dealers’ Associations (Fenegosida), said they had agreed to the government’s proposal to limit the mixing of binding materials in jewellery.

“Earlier, the government had taken a unilateral decision to lower the limit, which is impossible as binding materials have to be used to make jewellery,” he said.

According to Fenegosida, 24 carat gold contains 99.9 percent purity, while 22 carat gold is 91.6 percent pure. However, jewellers have been using large amounts of binding materials to prepare various ornaments.

Shakya said that the use of binding materials depends on the design of the jewellery. “If the jewellery consists of complicated designs, we have to use a large amount of binding materials,” he said.

Similarly, the draft of the guidelines has maintained the tolerance level at up to 1 percent of the total quantity. The tolerance level allows traders to mix chemicals as per the prescribed amount.

The draft is silent on the making charge for jewellery. It has given a year’s time for jewellers to implement the standards fully.

Shakya said they would forward the guidelines to all the gold traders once they are enforced.

“The federation will then help the government to take appropriate action against traders not following the guidelines,” he said.