Precious metals, stones, and products AML/CTF obligations

Why are precious metals and stones a target?

Precious metals (like gold and silver) and precious stones (like diamonds) are high-value, highly portable, and hold their value anonymously. Criminals rapidly convert illegal cash into these assets to move wealth across borders or store it without relying on the banking system, making dealers in these items prime targets for money laundering.

Which activities are designated?

If your business involves buying or selling precious metals, precious stones, or precious products (such as jewelry) in the course of carrying on a business, you may provide a designated service. However, the exact trigger usually depends on the transaction value or whether the transaction involves significant amounts of cash.

The cash transaction trigger

A key focus for this sector is the reliance on cash. Even if a customer brings in legally sourced cash, handling large cash payments poses an enormous risk. Under AUSTRAC rules, dealing with physical currency above certain threshold amounts will strictly mandate reporting through Threshold Transaction Reports (TTRs).

What do dealers need to do?

Dealers must formally enroll with AUSTRAC and implement an AML/CTF program. This means you must conduct Customer Due Diligence (CDD) to formally verify the identity of the person buying or selling the high-value goods. Furthermore, staff need to be trained to spot suspicious behaviors—such as individuals buying large quantities of bullion with cash who seem indifferent to the price—and immediately escalate those instances to a compliance officer.