KYC and AML checks for jewellers and precious-metals dealers

Australia’s expanded AML/CTF laws apply to dealers in precious metals, stones and related products from 1 July 2026 when they provide the relevant designated service. The service covers buying or selling qualifying items in the course of business where physical currency and/or virtual assets have a total value of at least AUD10,000. That total can arise in one transaction or several transactions that are linked or appear linked.

• Identify which inventory or purchase items are precious metals, precious stones or precious products. AUSTRAC includes jewellery, watches, personal adornments and certain goldsmiths’ or silversmiths’ wares when they contain relevant precious metals or stones.
• Record how each qualifying item will be paid for. Physical notes or coins and virtual assets count for this designated service; transactions paid only by card or bank transfer do not.
• Consider the regulated-item value separately when an order combines jewellery or another precious product with unregulated goods.
• Do not wait for one cash payment to reach AUD10,000. Your intake and monitoring process should identify multiple payments that together meet the threshold and are linked or appear linked.

Linked-transaction detection is operationally important for jewellers because deposits, lay-by arrangements, split tenders and purchases across different visits can make a single arrangement look like separate smaller payments. AUSTRAC expects dealers that accept physical currency or virtual assets below the threshold to have processes that can identify related activity that reaches it.

• Capture stable customer identifiers, item or stock references, invoice numbers, quote numbers and store or staff details so payments can be associated with the same underlying purchase or sale.
• Flag instalments, deposits and outstanding-balance payments connected with the same product, invoice, arrangement or common purpose.
• Consider activity close in time involving the same customer, similar products or changes in payment method, branch or staff member.
• Escalate requests to divide a payment into sub-threshold amounts. Identity checks can help resolve who is involved, but behavioural and transaction monitoring must sit around the check.

For this designated service, the customer is the buyer or seller, depending on the transaction. Initial CDD should establish who the customer is, verify required KYC information and support an assessment of the money-laundering, terrorism-financing and proliferation-financing risk before the service is provided. A consistent digital workflow can reduce missing evidence without turning the check into the final risk decision.

• Collect identity information and evidence in line with the individual-customer procedure in your AML/CTF program.
• Capture why the customer is buying or selling the item and the expected nature of the transaction where those details are relevant to your risk assessment.
• Compare the customer information with the order, payment and communications data already held by the store or buying desk.
• Route failed, incomplete or inconsistent verification outcomes to an authorised person rather than treating automation as the decision-maker.

High-value trade purchases and sales can involve companies, trusts, partnerships, family offices or intermediaries. In those cases, identity verification of the person at the counter is only one part of the picture. The workflow should follow the initial CDD requirements for the customer type, establish who is acting, assess their authority and collect the ownership and control information required by your program.

• Use a KYB Check to organise available entity registration, status and officeholder information before requesting additional customer documents.
• Identify relevant beneficial owners, controllers, trustees, partners or other specified persons according to the customer type and your risk-based procedure.
• Verify the identity of representatives and relevant individuals, and retain evidence showing why the representative was authorised to act.
• Do not assume registry data resolves every structure. Trusts, foreign entities, nominees and layered ownership can require documents, clarification and manual review.

AUSTRAC’s CDD guidance requires reporting entities to establish on reasonable grounds whether customers and other specified persons are politically exposed persons and whether they are designated for targeted financial sanctions before providing a designated service. Screening is useful evidence, but similar names and incomplete identifiers can produce results that need human review.

• Use full legal names, dates of birth, countries and other available identifiers to improve match assessment.
• Treat PEP status as a factor requiring the controls set by your program, not as proof of misconduct or an automatic customer rejection.
• Investigate a possible sanctions match against the source record and all available identifiers; do not dismiss or confirm it on name similarity alone.
• Document who reviewed the result, the evidence considered, the outcome and any enhanced due diligence, approval or restriction applied.

A useful customer file connects due-diligence evidence to the transaction that triggered it. For jewellers and dealers, that means being able to reconstruct the customer, item, value, payment methods, linked-transaction reasoning and approval—not merely retaining a screenshot that says a name was screened.

• Link the verification report to the customer profile, invoice or purchase record, item description and relevant payment records.
• Retain the identifiers checked, data sources in scope, time of screening, potential-match review and final disposition.
• Add the customer risk rating, rationale, source-of-funds or source-of-wealth evidence where required, approvals and any restrictions outside the screening report.
• Keep your separate monitoring and reporting workflow capable of identifying unusual behaviour, threshold transactions, suspicious matters and changes that require customer information to be refreshed.

An identity and screening workflow can make initial CDD more consistent, but the legal obligations attach to the reporting entity providing the designated service. AUSTRAC expects regulated dealers to enrol, assess their risks, establish and maintain an AML/CTF program, conduct customer due diligence, monitor activity, keep records and make required reports.

• Define which staff can accept qualifying payments and when they must pause a transaction for CDD or escalation.
• Train sales, buying, finance and compliance staff to recognise linked payments and collect consistent intake information.
• Set event-driven and periodic review rules so customer information and risk ratings can be updated when circumstances change.
• Have your legal or compliance advisers confirm how the Act and Rules apply to your products, payment model, branches and customer base.