Cash and virtual-asset red flags for precious-items dealers

Customer and identity indicators

Treat these as prompts for proportionate enquiry. A gift purchaser, collector, privacy-conscious public figure or representative can have a legitimate explanation. Record the answer and corroborate material facts where the risk warrants it. Escalate resistance, contradictions or explanations that do not fit the observed behaviour.

• The customer seeks unusual anonymity, avoids KYC, supplies inconsistent information or appears nervous or reluctant during reasonable CDD.
• A third party conducts, funds or collects the transaction without a clear relationship or commercial explanation.
• The customer shows little interest in price, quality, authenticity or suitability and appears focused only on converting value into a portable product.
• The customer's occupation, business activity or known financial profile appears inconsistent with the scale or frequency of purchases or sales.
• The customer or a connected party has reliable adverse information, is a PEP requiring the applicable risk response, or is associated with a targeted financial sanction.

Cash and virtual-asset payment indicators

Virtual assets are not automatically suspicious, but they can add wallet, intermediary, speed and cross-border risks that the business must understand. Record the payment path and relationship to the customer where appropriate. A linked-payment alert and a suspicion assessment are different decisions: investigate the connection and context before concluding whether reasonable grounds exist.

• The customer asks to keep individual payments below A$10,000, uses several staff members or stores, or changes payment methods after learning about identification or reporting.
• Payments come from unrelated people, multiple wallets or accounts without a plausible reason, or refunds are requested to a different person, account or wallet.
• The customer combines cash and virtual assets in an unnecessarily complex way, makes rapid instalments, overpays and requests change, or repeatedly cancels and restarts purchases.
• The customer has unusual knowledge of AML thresholds, asks whether transactions will be reported or insists that connected payments be treated as separate.
• Where a source enquiry is required by a PEP or enhanced-CDD rule, or triggered under the dealer's risk-based policies, the funding explanation is vague, the evidence is inconsistent, or the customer cannot explain how their wealth supports the activity.

Product, resale and valuation indicators

AUSTRAC identifies the portability, resale, concealment and potential under- or over-valuation of precious goods as vulnerabilities. Review rapid resale to the same or another dealer, repeated buying and selling with an accepted loss, unexplained preference for easily transportable items, requests for altered invoices or values, and purchases that seem unrelated to the customer's stated purpose.

Second-hand and scrap activity needs careful provenance. A person selling items without a credible ownership history, presenting altered serials or markings, or repeatedly supplying scrap inconsistent with their business may require deeper enquiry. Once jewellery is melted, remodelled or separated, provenance can become harder to trace, so capture item descriptions and evidence at intake.

Delivery, channel and jurisdiction indicators

Consider avoidance of face-to-face contact, insistence on a remote process without explanation, collection by an unknown intermediary, unusual courier routing, delivery to an address unrelated to the customer or repeated changes to destination. Remote delivery is a legitimate channel, but it changes impersonation, control and chain-of-custody risks.

Escalate unexplained connections to jurisdictions associated with serious corruption, crime, terrorism financing, proliferation financing, secrecy or applicable sanctions, using current authoritative information rather than stereotypes. The relevant issue is the actual customer, transaction and jurisdiction risk, not nationality alone. Apply targeted-financial-sanctions controls independently of the ML/TF suspicion test.

Investigate, decide and protect the record

Compare the activity with the customer's profile and history, obtain an explanation and supporting evidence, review connected payments and parties, and update KYC and risk. Apply enhanced CDD when a current trigger is met, not automatically because cash, virtual assets or a red flag is present. Collect and verify source-of-funds or source-of-wealth information only at the level required by a PEP or enhanced-CDD rule or made appropriate by the identified risk and policy. Decide whether the facts as a whole create reasonable grounds for a relevant suspicion; one strong fact may be sufficient, while several indicators may resolve coherently. Record the analysis and when suspicion was formed.

If the section 41 threshold is met, submit an SMR within 24 hours for terrorism-financing suspicions or generally within three business days after the day other suspicions are formed. The current tipping-off offence is not a blanket ban on every SMR-related communication: it prohibits disclosure of specified protected information where the disclosure would or could reasonably be expected to prejudice an investigation. Control what is disclosed, to whom, how and when, and do not tell the customer about the SMR where that prejudice test could be met. A TTR may also be required for an individual physical-currency transaction of A$10,000 or more, but it does not replace an SMR.