It is not mandatory to apply a quality mark to items made of precious metals (gold, silver, platinum, or palladium). However, many manufacturers, importers, and retailers that sell such items choose to mark them to indicate quality. For example, a 14-karat gold item may be stamped “14K.”
If you choose to add a quality mark the law requires that it be factual and not misleading. You must also follow certain rules and regulations and ensure that all advertising claims are factual. This is so consumers can trust the information and make informed purchasing decisions.
As a manufacturer, importer or retailer, you must do the following:
- Use only legally quality designation marks and respect the minimum quality requirements and prescribed tolerances.
- Include a Canadian trademark unless the item was hallmarked in accordance with the laws of the United Kingdom or accurately quality marked according to the laws of another country.
- Use the prescribed method of marking
- Ensure all information that you provide is accurate.
For important information on how to comply with the Precious Metals Marking Act and Regulations, as well as marking examples see Detailed precious metal marking requirements.
Penalties for non-compliance
It is against the law for dealers to mark a precious metal item (or sell an imported precious metal item) if it does not conform with the Precious Metals Marking Act and Regulations.
All quality marks must be true and accurate and conform to the standards and tolerances provided in the Regulations. In addition, quality marks must be applied in the manner prescribed by the law and must be accompanied by a legitimate trademark or hallmark.
Anyone who contravenes the Precious Metals Marking Act may be found guilty of an offence and liable to a fine of up to $500 on summary conviction.
Non-compliance with the Precious Metals Marking Act can also result in being non-compliant with the Competition Act. Under the Competition Act, it is against the law for anyone to make (or permit the making of) a public claim about a product that is false or misleading in a material way. The penalties for contravening the Competition Act are as follows:
The court may order the person not to engage in such conduct, to publish a corrective notice, to pay restitution to purchasers and/or pay a penalty.
For individuals, the penalty for first-time violations is up to the greater of:
- $750,000 ($1 million for each subsequent violation); and
- three times the value of the benefit derived from the deceptive conduct, if that amount can be reasonably determined.
For corporations, the penalty for a first-time violation is up to the greater of:
- $10 million ($15 million for each subsequent violation); and
- three times the value of the benefit derived from the deceptive conduct, or, if that amount cannot be reasonably determined, 3% of the corporation’s annual worldwide gross revenue
- Criminal penalties:
- Summary conviction offence: Anyone found guilty of a summary offence is liable to a fine of up to $200,000 and/or imprisonment for up to one year.
- indictable offence: Anyone convicted of an indictable offence may be subject to a fine decided at the discretion of the court and/or imprisonment of up to 14 years.
In most cases, non-compliance is solved through negotiation or collaboration with the parties.
How to ensure compliance with the law
You can protect your business by having an effective compliance program in place. This will help your company comply with the law and it could reduce the risks associated with non-compliance. Like an early-warning system, a compliance program can help you detect and correct unlawful conduct quickly before it damages your company, your reputation, and your bottom line.