AML Compliance for Jewellers & Precious Goods Dealers

Why Jewellers & Precious Goods Dealers Are Targets

Precious metals, stones, and jewellery are high-risk sectors for money laundering.

AUSTRAC has identified precious goods dealing as a sector with significant money laundering risk. Large cash transactions, high-value goods, international trade, and minimal record-keeping have historically made jewellery and precious metals ideal for layering illicit funds. Tranche 2 closes this gap by bringing dealers under mandatory AML/CTF compliance.

Why Your Business Is Affected: If you buy, sell, trade, repair, or authenticate precious metals, gemstones, jewellery, or bullion, you are now a Reporting Entity under the AML/CTF Act. You must enrol with AUSTRAC and conduct Customer Due Diligence (CDD) on all transactions over AUD 10,000.

Tranche 2 specifically targets:

Jewellery retailers and wholesalers
Precious metal dealers (gold, silver, platinum)
Gemstone and diamond traders
Bullion dealers and coins traders
Auction houses selling precious goods
Jewellery repair and restoration services

The compliance requirement: You must identify customers, verify their identity, understand the source of funds, report suspicious transactions, and maintain records for 7 years. Failure to comply carries civil penalties up to $6.26 million per individual and $31.3 million for companies.

What You Need to Do

Follow these 5 critical steps before 1 July 2026.

1
Enrol with AUSTRAC

Enrolment opens 31 March 2026. Register at austrac.gov.au as a Reporting Entity dealing in precious goods. This is mandatory for all jewellers and precious goods dealers.
2
Establish Your AML/CTF Program

Create written policies covering Customer Due Diligence, transaction monitoring, suspicious activity reporting, cash transaction handling, and staff training. Document your procedures in detail.
3
Conduct Due Diligence on All Transactions Over AUD 10,000

For every transaction involving $10,000 or more in precious goods (single transaction or structured multiple transactions), verify customer identity, collect ID documents, confirm occupation and source of funds. Keep records for 7 years.
4
Train Your Staff

All staff handling sales, purchases, repairs, or valuations must be trained on AML/CTF obligations, red flags in precious goods transactions, and how to report suspicious activity. Document all training.
5
Report Suspicious Activity Immediately

If you suspect money laundering or terrorism financing, file a Suspicious Matter Report (SMR) with AUSTRAC. Report within 3 business days of becoming aware of the suspicious transaction. Include customer details, transaction specifics, and reasons for suspicion.

Precious Goods Dealer Red Flags & Scenarios

Here's what to watch for and how to respond.

Scenario 1: Large Cash Purchase Without ID — A customer walks in wanting to buy high-value jewellery ($50,000+) entirely in cash and resists providing identification. Cash purchases are common in jewellery but require CDD verification. Politely insist on ID verification. If they refuse, decline the sale. Document the refusal. Consider filing a SMR if the pattern repeats.
Scenario 2: Request to Avoid Receipts — A customer asks you to sell jewellery without issuing a receipt or to split the sale into multiple smaller purchases to stay below the $10,000 threshold. This is structuring — a money laundering technique. Refuse to do this. You must provide written documentation of every significant transaction. File a SMR immediately.
Scenario 3: Precious Metals with Unknown Provenance — A customer wants to sell or trade precious metals claiming ownership but providing no history. Bullion and metals can be hot merchandise. Ask for proof of ownership, certificates, or documentation. If the customer cannot explain how they acquired the materials, this is suspicious. Report to AUSTRAC.
Scenario 4: Layaway Payments to Avoid Threshold — A customer places an item on layaway and makes multiple small payments (e.g., $2,000 each) over several weeks to eventually total $10,000+, clearly intending to avoid triggering CDD. Document the pattern. Treat this as a single transaction reaching $10,000+. Conduct CDD and report if warranted.

Precious Goods Dealer AML/CTF Compliance Checklist

Use this checklist to ensure you're ready before 1 July 2026. Click each item as you complete it.

Enrol with AUSTRAC by 1 July 2026
Write AML/CTF policies specific to precious goods dealing
Appoint an AML/CTF Compliance Officer
Implement CDD procedures for transactions over $10,000
Verify customer identity with government-issued ID
Document source of funds for all high-value purchases
Create cash transaction reporting procedures
Train all staff on red flags and reporting
Establish records retention (7 years minimum)
File SMRs with AUSTRAC when required

What Happens If You Don't Comply

The penalties are substantial. Here's what you risk.

$6.26M

Maximum civil penalty per breach for individuals. Companies face up to $31.3 million.

Criminal charges — Up to 5 years imprisonment for failure to report, 10 years for money laundering, life imprisonment for serious contraventions
Business closure — AUSTRAC can prohibit you from dealing in precious goods
Asset seizure — Criminal proceeds can be seized under proceeds of crime legislation
Reputational damage — Public enforcement action and loss of customer trust
Ongoing audits — AUSTRAC inspections and investigations of your compliance program

Recent enforcement: AUSTRAC has imposed multi-million-dollar penalties on non-compliant financial institutions. The precious goods sector has historically avoided scrutiny, but Tranche 2 brings jewellers and dealers into the compliance regime. Expect increased monitoring and enforcement.

How AMLPrep Helps

We make compliance simple and affordable. Start getting compliant in under 30 minutes.

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Free Readiness Quiz — 15 questions to assess your current gaps and get a customized action plan for precious goods dealers.
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Jewellery-Specific Guides — Compliance guides covering CDD procedures, cash transaction handling, precious metals provenance verification, and red flags.
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Ready-Made Templates — AML/CTF policies, staff training materials, and SMR checklists designed for jewellers and precious goods dealers.
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Training Course — Comprehensive online course covering AML/CTF obligations, transaction monitoring, and reporting. Certificate for your records.
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Compliance Software — Automate CDD, transaction documentation, and suspicious activity monitoring for precious goods sales.
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Expert Support — Direct access to AML/CTF compliance specialists familiar with precious goods dealing.

Frequently Asked Questions

Common questions from precious goods dealers.

Does this apply to all jewellery businesses? +

Yes. If you buy, sell, repair, trade, or authenticate precious metals, gemstones, or jewellery, you're a Reporting Entity. This includes retail jewellers, wholesalers, antique dealers, auction houses, and independent goldsmiths. You must enrol with AUSTRAC and comply with Tranche 2 requirements by 1 July 2026.

At what transaction value do I need to conduct CDD? +

AUD 10,000 or more. For any single transaction (or structured series of transactions appearing to avoid the threshold) involving precious goods valued at AUD 10,000 or more, you must conduct full Customer Due Diligence. This means verifying identity, understanding source of funds, and documenting everything. Transactions below $10,000 don't require CDD but should still be monitored for suspicious patterns.

How do I verify identity for a precious metals or gemstone purchase? +

Collect government-issued ID. Ask for a valid passport, driver's license, or national ID card. Sight the original document and retain a copy on file for 7 years. Note the ID number, issuing state, and expiry date. For high-risk transactions (e.g., foreign customers, complex ownership), conduct additional verification: contact the ID issuer, request recent utility bills, or verify against public registers.

What counts as "source of funds" in precious goods dealing? +

Evidence of legitimate ownership or income. For a customer purchasing high-value jewellery or bullion, ask: Where is this money coming from? Bank statements, pay slips, investment statements, inheritance documents, or business records are acceptable. For precious metals sales, ask: How did you come to own these materials? Certificates of authenticity, previous purchase receipts, or documentation of inheritance are necessary. If the customer cannot explain the source, consider it suspicious and report.

Can I accept cash payments without ID? +

Not for transactions over $10,000. Cash is common in jewellery, but high-value cash transactions require CDD. You must verify the customer's identity, understand the source of funds, and document the transaction. If a customer refuses ID verification for a large cash transaction, you must decline the sale. Document the refusal.

What should I keep in my CDD records? +

Complete transaction documentation. Keep: customer name and contact details, ID type and number, date of birth, occupation, address, description of the transaction (items, quantity, value), date of transaction, source of funds (for purchases), and any notes on verification steps taken. Retain all records for 7 years. AUSTRAC may audit your files, so be thorough and clear.

AML Compliance for Jewellers & Precious Metal Dealers — Your Legal Obligation Starts July 1