Hallmarking Act 1973 (Application to Palladium) Order 2009

The draft order is intended to apply the Hallmarking Act 1973 to the precious metal palladium. I thank the Commons committee for carefully considering and approving the draft order earlier this afternoon. The Hallmarking Act makes it an offence, during the course of trade, to describe an unhallmarked article as being wholly or partly made of gold, silver or platinum, or to supply it with such a description attached. This order proposes to apply the Hallmarking Act to palladium in a similar manner. Palladium has not hitherto been prescribed by the Hallmarking Act because manufacturing difficulties led to high costs and low demand. These difficulties have now been overcome and the market for palladium articles is expected to grow considerably. Given the value of the metal, which is less valuable than platinum and gold but more valuable than silver, there is an increased danger of fraud. A consumer may not be able to tell by eye the difference between articles made from palladium and those made from cheaper precious metals such as silver and white gold, or from base metals. To protect consumers from fraud and counterfeiting, I propose that the Hallmarking Act should be applied to palladium. Another reason why palladium should be prescribed in this way is that, under our obligations to the International Hallmarking Convention, of which we are a member, we shall shortly be required to recognise palladium articles stamped with the convention hallmark. This will be done under an amendment to existing legislation—the Hallmarking (International Convention) Order 2002—but we require the Hallmarking Act itself to apply to palladium to enable it to apply in a consistent manner to all precious metal articles affixed with the convention hallmark. We conducted a full public consultation on this measure in autumn 2008. It is supported by all stakeholders, including the precious metals and jewellery industry, the British Hallmarking Council and all four UK assay offices. The order will come into force on the day after it is made. I agreed this at the request of the precious metals industry to enable it to meet its Christmas rush, which peaks in September/October. I consulted the Sub-Committee on Productivity, Skills and Employment, which is part of the ministerial committee on economic development, and it agree with this decision not to apply a common commencement date. It will become an offence to apply to an unhallmarked item a description that it is wholly or partly made of palladium or to trade in such an item. This brings palladium into line with the same offence that covers gold, silver and platinum. The offence provision will apply to palladium with a fineness or purity not less than 500 parts per 1,000. This value of minimum fineness is common to the international hallmarking convention and those EU member states that prescribe palladium. Small palladium articles weighing less than 1 gram are exempt from hallmarking. Similar minimum-weight provisions apply to the other prescribed precious metals. Hallmarking is not compulsory for any palladium article manufactured before 1 January 2010 but it will become an offence to trade in unhallmarked articles that are manufactured after that date. In the intervening period, manufacturers and traders may voluntarily have palladium articles hallmarked if they so wish. This delay in the offence provision is intended to give the trade time to prepare for the prescription of palladium. It mirrors the same procedure that was successfully introduced for platinum when that precious metal was first prescribed in 1973. To avoid confusion and to protect the consumer, there are only three permitted fineness levels with which palladium may be hallmarked. These levels conform to the international convention requirements. As with the well known pictorial hallmarks—for example, a lion or Britannia for silver—the trade has requested an optional pictorial mark for palladium and has chosen the head of Pallas Athene, the Greek goddess of war, wisdom and crafts, after whom palladium was named. Palladium is formally ranked as being more precious than silver but less precious than gold or platinum, to enable manufacturers to conform to coating or plating rules. A precious metal article may be coated only with the same precious metal having a greater fineness or by a precious metal that is more precious. As I said, these regulations are supported by the precious metals and jewellery industry because they protect both buyers and sellers in an area that is expected to grow in the next few years. They are also required to protect articles hallmarked under the international hallmarking convention. For these reasons, I commend the order to the Committee.