AML/CTF for precious metals, stones and products dealers: bullion, thresholds, CDD and reporting

When a non-bullion purchase or sale becomes a designated service

Two conditions must both be met. First, the regulated precious metals, stones or products being bought or sold must be worth at least A$10,000. Second, at least A$10,000 of the consideration must be transferred using physical currency, virtual assets or a combination, in one transaction or transactions that are linked or appear to be linked.

Card and bank-transfer amounts do not count toward the payment-method threshold. In a mixed basket, count only the regulated precious items when testing the item-value condition. Keep the valuation method, exchange rate and virtual-asset value used on the file, and confirm that the service has the required Australian geographical link.

Classify bullion separately

Bullion is not simply any gold, silver or collectible coin. The statutory definition covers qualifying gold, silver, platinum or palladium in a specified mass or coin form, bearing an accepted fineness or quality characteristic and ordinarily traded at a price linked to spot value. Jewellery, collector coins and scrap metal require classification against the definition rather than being assumed to be bullion.

A business that buys or sells bullion while carrying on a bullion-dealing business provides a designated service regardless of whether the customer pays by cash, card, bank transfer or virtual asset. A limited initial CDD exemption may apply when the retail value is below A$5,000 and enhanced CDD is not required. The service remains regulated and the dealer must still apply the rest of its AML/CTF program.

Complete customer due diligence before the service starts

For linked instalments, design the point-of-sale process so CDD is completed before the designated service is provided. A later payment should not reveal for the first time that the threshold has already been reached without the required customer checks.

• Establish on reasonable grounds the customer's identity and ML/TF risk, unless the limited bullion exemption applies
• Identify and verify any representative and their authority, any person on whose behalf the customer acts, and the customer's beneficial owners
• Understand the nature and purpose of the business relationship or occasional transaction
• Establish the PEP and targeted-financial-sanctions status of the customer and other people specified by the CDD rules
• Apply enhanced CDD, including source-of-funds or source-of-wealth work, when the risk or another trigger requires it
• Record the regulated items, value, valuation basis, payment methods, dates and links between transactions

Do not use the linked-payment test for TTR aggregation

Linked transactions must be combined when deciding whether the precious-items service is regulated. Do not combine separate cash payments for TTR purposes. Lodge a threshold transaction report for each individual transfer of physical currency of A$10,000 or more within 10 business days after the day of that transaction.

A virtual-asset payment can make the precious-items service designated, but it does not by itself trigger a TTR. If sub-threshold cash payments appear structured to avoid reporting, assess whether reasonable grounds for a suspicious matter report exist.

Escalate red flags and apply the correct SMR deadlines

A red flag does not automatically establish a reportable suspicion. Escalate and examine the activity under your AML/CTF policies. If you form a suspicion on reasonable grounds, lodge an SMR within 24 hours where it relates to terrorism financing, or within three business days for other suspicions.

Do not disclose an SMR, the existence of the suspicion or related protected information where the disclosure would or could reasonably be expected to prejudice an investigation. Staff should follow a documented escalation script rather than improvise an explanation to the customer.

• A customer who buys high-value items with cash and shows no interest in price, design or quality
• Requests to split a sale into sub-threshold amounts or across multiple days
• Third parties paying, collecting or taking delivery for someone who stays off the paperwork
• Rapid buy-back requests, imported scrap with an unclear supply chain, or bullion bought and quickly resold
• Remote sales, complex entities, high-risk foreign jurisdictions or reluctance to provide identification

Set up the dealer program and record retention

Seven-year retention applies, but the start point varies by record. Transaction records generally run from creation, customer-provided transaction documents from receipt, CDD records from the end of the occasional transaction or business relationship, and program records until seven years after they cease to be relevant to demonstrating compliance.

• Enrol with AUSTRAC if you provide a designated bullion or threshold-regulated precious-items service; a later starter generally applies within 28 days of beginning
• Appoint an AML/CTF compliance officer and document the dealer's ML/TF and proliferation-financing risk assessment
• Maintain senior-manager-approved policies for classification, payment types, linked transactions, CDD, enhanced CDD, reporting and ongoing due diligence
• Train counter, online-sales, finance and collection staff on threshold detection, exemptions, verification and escalation
• If a non-bullion dealer chooses to refuse all physical-currency and virtual-asset payments, document and enforce that control; it does not remove separate bullion obligations