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Supply Chain Due Diligence Policy

1. Core Mandate & Operational Philosophy​

Kulce Commodities S.A. ("Kulce") operates at the intersection of gold and decentralized finance. Because our core business model involves acquiring physical gold to back the issuance and redemption of digital tokens, the integrity of our physical inventory is non-negotiable. Every gram of gold supporting a Kulce-issued digital asset must be sourced cleanly, ethically, and legally.

To fulfill this commitment, our sourcing ecosystem is governed by international gold industry benchmarks, specifically the LBMA Responsible Gold Guidance and the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. This Protocol serves as our operational blueprint to eliminate human rights infractions, child labor, conflict financing, and environmental degradation from our procurement channels.

This framework binds all Kulce operators, global bullion refineries, vaults, and international liquidity providers. It functions alongside our internal Code of Conduct and global Anti-Money Laundering (AML/CFT) frameworks.

2. Verification & Partner Qualification Architecture​

We do not purchase gold without comprehensive verification. Kulce applies a strict onboarding process to ensure that all supply chain participants match our corporate values before any transaction occurs.

Pre-Contract Vetting (KYB): Every potential refinery, supplier, and secure storage provider must undergo a rigorous Know-Your-Business vetting process. This includes verifying their operational history, ultimate beneficial owners (UBO), and origin tracking.

The Excellence Standard: Kulce prioritizes commercial relationships with suppliers who maintain active LBMA Good Delivery status. Commercial metrics like price and speed never override our ethical standards.

Contractual Safeguards: Our legal agreements contain strict ethical clauses. Entering into a partnership with Kulce requires ongoing compliance with this Protocol, and any deviation triggers immediate corporate intervention.

3. Vulnerability Classification & Risk Matrix​

Kulce continuously monitors its supply network for operational, ethical, and regulatory vulnerabilities. We categorize supply chain risks into three distinct priority tiers to determine our response:

Tier 1 (Critical Violations): This includes any association with forced labor, human rights abuses, direct or indirect financing of armed conflicts, evasion of international sanctions (OFAC, UN, EU), or severe environmental crimes.

Tier 2 (Operational Deviations): This involves localized health and safety infractions, minor workplace non-compliance, or administrative gaps in supply chain paperwork. If a supplier fails to address a Tier 2 issue within a reasonable timeframe, it is automatically escalated to Tier 1.

Tier 3 (Minor Variances): This covers routine administrative or technical documentation discrepancies that do not compromise the legal or ethical status of the gold.

The Risk and Compliance Team retains full authority to evaluate and categorize unlisted operational risks on a case-by-case basis.

4. Direct Escalation Channels​

Any employee, external auditor, or partner who identifies a vulnerability or breach in our supply chain must report it immediately to the Risk and Compliance Team. Kulce maintains secure internal reporting channels to ensure all compliance concerns are escalated without delay.

5. Incident Remediation & Enforcement Mechanism​

When a compliance deviation is detected and verified, Kulce triggers a structured enforcement process based on the assigned risk tier:

Remediation for Tier 3 Actions: The supplier receives a notification to correct the administrative variance. The compliance team sets a reasonable deadline, and failure to meet it leads to an internal operational review.

Remediation for Tier 2 Actions: Kulce issues formal corrective instructions with a strict deadline. Once the deadline expires, our team audits the supplier's progress. If the supplier fails to implement the required changes, Kulce reserves the right to suspend orders or terminate the contract.

Remediation for Tier 1 Actions: Because these violations threaten the integrity of our gold-backed digital tokens, Kulce issues an immediate freeze on the supplier's account and mandates a strict 24-hour window for complete remediation. The supplier must provide definitive proof that the critical risk has been resolved. If they fail to do so within 24 hours, the commercial relationship is terminated immediately, and any linked tokenization workflows are permanently halted.

6. Information Archiving & Data Stewardship​

Kulce maintains an unalterable compliance archive documenting all due diligence activities, supplier audits, and incident reports.

Our records systematically preserve:

The precise nature of the detected risk or incident.

All physical evidence, refinery certificates, and third-party audit reports.

Corrective instructions issued by Kulce and the supplier's official responses.

The final written decision and rationale from our compliance leadership.

All data is archived securely and managed in full compliance with the privacy regulations of the relevant jurisdictions.

7. Transparency & Public Disclosures​

To maintain trust with token holders, institutional clients, and regulators, Kulce publishes regular transparency reports. These statements verify the clean origin of our physical gold reserves, confirm our refinery alignments, and summarize our supply chain compliance metrics.

8. Non-Disclosure & Investigation Integrity​

All parties involved in an active compliance investigation must maintain absolute confidentiality regarding the process. This protection covers all evidence, audit findings, and the identities of the individuals or suppliers under review. Information will only be disclosed when required by international law or authorized by executive management.

9. Accountability & Right to Redress​

Kulce expects its workforce, suppliers, and global vaulting partners to adhere strictly to this Protocol. Protecting our tokenization ecosystem from ethical and regulatory risk is a shared responsibility. Any failure to meet these standards gives Kulce the right to suspend operations, claim financial damages, and terminate business relationships without penalty.