Dáil debates

Thursday, 6 April 2017

Hallmarking (Amendment) Bill 2016: Second Stage

 

3:40 pm

Photo of Marcella Corcoran KennedyMarcella Corcoran Kennedy (Offaly, Fine Gael)
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I move: "That the Bill be now read a Second Time."

The purpose of this Bill is to update and modernise Irish law relating to hallmarking by, first, amending the law relating to the assaying and hallmarking of articles of precious metals to include palladium and mixed precious metals in the definition of articles of precious metals and, second, by making provision for the possibility for the Irish Assay Office to assay and hallmark articles of precious metal outside the State in certain circumstances.

Third, it provides for offences and penalties relating to forged hallmarks.

The term "Hallmarking" describes the administrative and legal system for ensuring that articles of precious metals conform to legal standards as to the fineness of the metals. Fineness is a measure of the quality of a precious metal and represents its purity in an alloy as determined by assaying the article. Legislation dating back to 1637 states that no article made from named precious metals can be sold in Ireland without it being assayed and hallmarked. This is one of the earliest examples of consumer protection legislation in Ireland.

The term "precious metal", as defined in section 1 of the Hallmarking Act 1981, covers articles made from gold, silver or platinum or alloys of these. Such precious metals must bear an Irish hallmark, a hallmark of the international hallmarking Convention on the Control and Marking of Articles of Precious Metals, of which Ireland is a member, or an approved hallmark from an EU member state in order that they can be legally offered for sale in this country. Every article of precious metal must be hallmarked.

In addition to hallmarks, articles of precious metals commonly bear a sponsor’s mark. This identifies the person who submits the article for hallmarking, that is, a dealer or the person who made the article or who worked it into its finished state. As a result, the owner of an article can identify not just the metal's fineness and the assay office that determined it, but also the origin of the article.

The primary legislation dealing with hallmarking in Ireland is the 1981 Act. Regulations made under it include the Hallmarking (Irish Standards of Fineness) Regulations 1983 and the Hallmarking (Irish Standards of Fineness) (Amendment) Regulations 1990, which list the approved standards of fineness for articles made from or containing precious metals. These regulations are in addition the standards of fineness referred to in the charter granted to the Wardens and Commonalty of Goldsmiths of the city of Dublin on 22 December 1637, section 22 of the Plate Assay Act 1783 and section 3 of the Plate Assay (Ireland) Act 1807.

The Company of Goldsmiths of Dublin governs the Dublin Assay Office, which is situated in Dublin Castle. The Irish Assay Office, IAO, is the independent, self-funding, third party, State-appointed test laboratory that assays and hallmarks items of gold, silver and platinum jewellery and plate articles that are either manufactured in Ireland or imported. The mark of the assay office is the indication that the precious metal conforms to a certain standard of fineness. The public is therefore assured that, for example, an article that states that it is pure gold actually is pure gold.

Since the current legislation was introduced in 1981, there have been advances in the jewellery trade. Palladium has been recognised as a precious metal and there has been an increase in the production of jewellery made of mixed precious metals. Under current legislation, the assay office cannot legally hallmark palladium or articles made from mixed precious metals, as the 1981 Act does not provide for this. However, Irish consumers may not be familiar with overseas hallmarks in the same way as they are knowledgeable about and aware of Irish hallmarks and they may be misled when purchasing such an article. The introduction of new Irish hallmarks for articles made of palladium and mixed precious metals would provide effective protection for consumers, increase consumer confidence in the fineness of the precious metal articles and promote fair trade.

In recent times, there has been a trend towards assay offices in other jurisdictions opening offices outside their countries of residence or placing officials in factories abroad in order to assay and mark articles of precious metals on site. This practice has been made for business reasons, since it is easier for a manufacturer if the testing and marking are done in the factory where the product is made, with the delivery time being shortened and the product being packed for retail display at source. Compliance is also facilitated by having the testing and marking done before products enter, for example, an EU member state. This has happened in the UK and the Netherlands.

In order to have the possibility of engaging in such offshore assaying if it chose to do so, the assay office made a request to the Department of Jobs, Enterprise and Innovation to amend the 1981 Act to that effect. While it is my understanding that the need for such offshore marking is not currently required and that the assay office does not intend on engaging in such activity in the near future, legislating for the possibility at this stage is seen as a prudent way of ensuring that the facility is available if required. Approval from the Minister for Jobs, Enterprise and Innovation would be required for any such offshore activity by the assay office under the proposed legislation.

The same prudent approach lies behind the proposed provision allowing for the possibility of the IAO entering into an arrangement with another assay office to hallmark precious metals. For example, such a scenario might arise where the volume of articles of a specific precious metal might not justify expenditure on the assaying equipment for that metal.

The issue of offshore marking has undergone fluctuating phases of popularity and desirability in recent years. However, the provision of an enabling legal basis for offshore marking does not oblige the IAO to open offshore offices. Rather, it ensures that, if offshore marking is ever required by the office in the future, no new primary legislation will have to be introduced.

As the Bill is a technical measure, consultation with the European Commission and all other EU member states was required under EU law. That consultation period has now passed and no submissions were received from parties in other member states or from the Commission.

Turning to the specific provisions of the Bill, I will explain what each is designed to achieve. While three principal issues are involved, the technical nature of the Bill means that a wide range of amendments to the 1981 Act are required to give effect to these changes. Section 1 on definitions and section 15 on the Short Title and commencement are standard legislative provisions while sections 2 to 14, inclusive, are the core provisions of the Bill. Section 2 provides for amendments to section 1 of the 1981 Act by amending that Act’s definitions to add palladium and mixed precious metals to the definition of "articles of precious metal", include a definition to cover hallmarking in assay offices outside the State, and define what constitutes a "forged hallmark".

Section 3 provides for an amendment to section 2 of the 1981 Act enabling the assay office, if it is approved to engage in offshore marking, to strike hallmarks outside the State and for articles bearing those hallmarks to be treated in the same way as articles bearing hallmarks struck in the State. Section 4 provides for an amendment to section 3 of the 1981 Act to allow for the making of regulations to prescribe different marks for hallmarks applied in Ireland and for those applied offshore. Section 5 provides for a technical amendment to section 4 of the 1981 Act regarding forged hallmarks. Section 6 provides for the addition of three new sections to the 1981 Act to allow offshore hallmarking to take place if the IAO chooses to engage in such activity. Thus, it is only providing for the opportunity to do so rather than placing any obligation on the office to do so.

The first new section gives the IAO the potential to open authorised offices outside the island of Ireland that can assay and hallmark articles of precious metal as if it were done by the assay office in Dublin. However, this offshore office can only be established with the permission of the Minister of Jobs, Enterprise and Innovation. In seeking the Minister’s permission to establish an offshore office, the assay office must provide detailed information on how that office will be managed, for example, its governance and administration, the employment terms and conditions of any staff that may be employed in the offshore office and the costs of establishing such an office.

The second new section provides that the IAO, if it so desires and with the consent of the Minister, can enter into an agreement with another assay office of another contracting party to the international hallmarking convention to carry out assaying and hallmarking that conform to Irish standards. The new section also sets out the information that the IAO must supply to the Minister when seeking the Minister’s consent for such an agreement in terms of corporate governance, administration and management of that assay office, the terms and conditions of any agreement with that assay office and the charges that are to be imposed by that assay office.

The third new section provides for the granting of specified powers to the IAO in terms of an official seal and authorisations on its behalf to carry out assaying and hallmarking that conform to Irish standards where the IAO chooses to establish an offshore assay office or enter into an agreement with an assay office of another contracting party to the international convention.

Section 7 provides for a technical amendment to section 5(1) of the 1981 Act by adding palladium to the list of articles of precious metals for which it is an offence to apply a false trade description. Section 8 provides for a technical amendment to section 6(2) of the 1981 Act by adding palladium to the list of articles of precious metals qualified by the word "plated". Section 9 provides for a technical amendment to section 8 of the 1981 Act by adding palladium to the list of articles of precious metals to ensure that every reference to gold or silver in an enactment specified in subsection (2) shall be construed as including a reference to palladium.

3 o’clock

Section 10 provides for an amendment to section 9 of the Hallmarking Act 1981 to allow the Irish Assay Office and a sponsor to make arrangements for the sponsor's mark to be struck by the Assay Master or an authorised assay office as soon as practicable after the submission of the article for the striking of an approved offshore hallmark in accordance with section 6 of this Bill.

Section 11 provides for an amendment to section 12 of the Hallmarking Act 1981 to ensure that in the case of additions to existing articles of precious metal the added metal is of the same precious metal as the existing article. It also provides technical amendments to certain cases of coatings added to existing articles of precious metals.

Section 12 provides for the inclusion of provisions on offences and penalties related to forged hallmarks. Section 13 provides for an amendment to section 14 of the Hallmarking Act 1981 by providing for the Irish Assay Office to make charges, with the consent of the Minister for Jobs, Enterprise and Innovation, for hallmarks applied in any offshore assay offices it establishes under section 6 of this Bill, in the same way as it currently does for hallmarking in its Dublin office.

Section 14 is a standard repeals provision and provides for the repeal of sections of the Plate Assay (Ireland) Act 1807 and section 13 of the Hallmarking Act 1981, both of whose subject matter are now covered by section 12 of the Bill.

After a house and a car, jewellery is one of the most expensive outlays for consumers in their lives and it is important that they are assured that they are getting what they pay for, particularly given the often very sentimental value that also attaches to such articles. This Bill aims to enhance consumer protection and to strengthen consumer confidence regarding the proper hallmarking of articles of precious metal in respect of their finesse.

I look forward to working with Deputies on Committee and Report Stages of this Bill in terms of any amendments that may be proposed. The Minister for Jobs, Enterprise and Innovation, Deputy Mitchell O'Connor, and I will be happy to reply to any questions arising. I commend the Bill to the House.

4:00 pm

Photo of James LawlessJames Lawless (Kildare North, Fianna Fail)
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I thank the Minister of State for introducing this Bill to the House. Fianna Fáil supports the general principles of the Hallmarking (Amendment) Bill 2016 and its passage to the next Stage and looks forward to further engagement on it with the Minister, including any amendments that may be required.

Hallmarking is essentially a quality assurance measure designed to give comfort to purchasers of valuable items, usually jewellery, that they consist of what they are supposed to consist of in terms of the precious minerals within. The addition in the Bill of the category of palladium in the definition of precious metals appears sensible. This is an emerging trend in jewellery, I am told and so it is right that it would have the same protection gold, silver and platinum have enjoyed to date.

During debate on the mining Bill in the House some weeks ago we heard of how earth minerals are now emerging from zinc and ore deposits which were not previously thought to be valuable. Consumer electronics are extremely valuable. It is always the way that technology and science makes progress and as such more minerals and more metals are added to various lists of value, in this case palladium. Measures to extend the assaying and hallmarking of such metals to offices outside the State are, as outlined by the Minister of State, a key part of this Bill. The Minister of State referred in her speech to the governance and operation of those offices. It is important that when we are outsourcing, or in this case enabling a remote operation of Irish equality assurance, that we regulate stringently and ensure that that offshore office is held to the same degree of standards, governance and integrity as an onshore office. I ask that the Minister of State and the Department officials bear that in mind. Acknowledging that the Minister of State already mentioned the many checks and balances in place in that regard. That said, this appears to be a sensible measure.

The measures to strengthen the regulation of hallmarking benefit consumers in that they provide a level of quality assurance and confidence. It is important that we have such a mark, which is undetectable to the human eye, to protect people who propose to engage in the purchase or sale of such items. There are new offences created in this Bill in relation to forgery. The Bill also provides for prosecution in that regard by changing the definition of such offences. In other words, there is a change in those offences to require proof of knowledge or belief that the mark was a forged hallmark rather than the previous burden of proof which was slightly more difficult to prove in a court of law or to prosecute. Again, that will be of benefit to the industry and consumers in general.

Notwithstanding that Fianna Fáil will be supporting this Bill as it progresses through the Houses, I would like to flag one area of concern. Like other Deputies I have received correspondence on this Bill. The Minister of State mentioned that there was detailed consultation on this matter throughout the EU because this is a technical measure and such was required. I do not believe anything major arose in that regard. As I said, I have received correspondence from the industry to the effect that the primary representative organisations domestically, including the Irish Jewellers Association, the Federation of Jewellery Manufacturers of Ireland and Retail Jewellers of Ireland, were not consulted. While they have not flagged any specific concerns in relation to the Bill they have expressed concern that they have not been consulted on it. Perhaps the Minister of State would advise what level of engagement took place and if no such engagement has taken place to date, perhaps it could take place before we move to Committee Stage to allow the industry an opportunity to raise any concerns it might have, which could be addressed by way of amendment with the agreement of all parties.

As the Minister of State mentioned the Bill provides for repeal of various statutes, as is always the case when legislation of this type is being introduced. I note the standards in this area vary slightly across the EU. Some EU states do not have an independent hallmarking body and others do. It makes sense to me that we would have such a body and that it be managed by the Department and the State and the correct standards applied. This is a niche area. If we are setting out a point of reference on which a value will hinge it is important that that practice be tightly and stringently regulated to ensure the types of offences mentioned earlier do not occur.

As I said, Fianna Fáil is supportive of this Bill. It marks progress in this area and is welcomed by this side of the House. I look forward to further engagement on it as it progresses through the Houses. I again ask the Minister of State to ensure there is consultation with the industry, if such consultation has not already taken place.

Photo of Maurice QuinlivanMaurice Quinlivan (Limerick City, Sinn Fein)
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I too thank the Minister of State for introducing this Bill, which Sinn Féin will be supporting.

This Bill is technical in nature, with the main aim of including palladium and mixed precious metals on the list of precious metals that can be hallmarked by the Irish Assay Office. It also provides for the possibility of an offshore marking by the Irish Assay Office in the future, if it so wishes, with ministerial approval, in case future trends in hallmarking demand it. Hallmarking is one of the oldest forms of consumer protection. It has existed in Ireland since 1637. Understandably, jewellers in Ireland would be particularly interested in any reform of this area. Like Deputy Lawless, I am disappointed that key stakeholders were not consulted on this area of reform. I was in contact with a representative from the Irish Jewellers Association during the week who is concerned that his organisation, the Retail Jewellers of Ireland and the Federation of Jewellery Manufacturers of Ireland were not notified of changes in legislation in their area of work. Having listened to the concerns of those stakeholders, it is appropriate for me to highlight the sector’s worries now in order that there can be a more detailed discussion on them on Committee stage, with amendments to follow, if necessary. One specific amendment that could be introduced is an exemption in weights, as is done in other countries. Adding a hallmark costs money to each piece of jewellery - approximately €0.66 per item - and so this is pushing up the cost for smaller pieces of jewellery with tiny weights of these precious metals. I appreciate the need for hallmarking on larger and heavier pieces to provide the consumer with certainty that the piece is of high quality, but I think this is too burdensome for producers for small, cheap pieces.

This Bill seems to be following the lead of UK, which introduced palladium as a precious metal in 2009 and legislated for national assay offices abroad in 2013. The UK has provided for an exemption of this kind for metals under a certain weight. The exemption thresholds in the UK are 1g for gold, 7.78g for silver, 0.5g for platinum and 1g for palladium. Will the Minister consider providing for similar exemptions in this Bill?

Another factor that has been highlighted is the lack of inspections to ensure shops that are selling these precious metals are in full compliance with the current regulations. Is the Minister satisfied that sufficiently severe penalties are in place in this Bill and in existing legislation to deter abuse of hallmarking metals in Ireland? I am pleased that the Minister is being given the ability to set up an offshore assay office if she wishes. As Deputy Lawless has outlined, we need to ensure the same standards that apply here in Ireland also apply in the sub-offices overseas. I recognise the importance of hallmarking as a protection for consumers. I welcome this Bill, which updates the law in line with emerging trends. However, I am concerned that adequate consultation has not been undertaken with relevant stakeholders. I hope this will be addressed in advance of Committee Stage.

4:10 pm

Photo of Marcella Corcoran KennedyMarcella Corcoran Kennedy (Offaly, Fine Gael)
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I thank Deputies Lawless and Quinlivan for their contributions and for their parties' support for the contents of this Bill. I will address the concerns they have expressed to the best of my ability. I want to repeat that the offshore hallmarking provision is not an obligatory one - it merely allows the Irish Assay Office, if it ever chooses to do so, to apply to the Minister for Jobs, Enterprise and Innovation for approval. As I noted at the start of this debate, my understanding is that such offshore marking is not currently required and that the Irish Assay Office does not intend to engage in such activity in the near future. I assure the House that the same standards will continue to apply to Irish hallmarked articles. The Deputies have suggested that they might introduce amendments to this Bill at a later stage. I am advised that the Minister is willing to examine such amendments in a constructive manner, as long as they do not undermine the current system of hallmarking in Ireland or result in a reduction in the level of consumer protection provided for under the current legislative framework.

I want to respond to the points the Deputies made about the perceived lack of consultation. This Bill has been in gestation for a long time. It was part of the previous Government's legislative programme. Between 2012 and 2013, the Department of Jobs, Enterprise and Innovation consulted all the relevant stakeholders, including the Craft Council of Ireland, jewellery producers and retailers and the Irish Assay Office, on the proposal to amend the Hallmarking Act 1981. I assure the House that there is no question about the openness of the Minister to having further consultations that people might require and to responding to any concerns that might arise in advance of Committee Stage. I thank Deputies Lawless and Quinlivan again for contributing to this informative and useful debate. As I have indicated, the Minister is looking forward to working with Deputies during the Committee and Report Stage debates on this Bill and to considering any amendments that might be proposed.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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The gestation period for the Bill may have been very long, but the debate on it certainly has not been.

Question put and agreed to.