Precious Metals Sector
Dealers in precious metals and stones above threshold values are designated reporting entities. Here's what you need to know before 1 July 2026.
From 1 July 2026, new AML/CTF compliance obligations (called Tranche 2) will apply to Dealers in Precious Metals, Stones and Other Products. AUSTRAC enrolment opens 31 March 2026.
The path to 1 July 2026 is defined by clear legislative and regulatory milestones
AML/CTF Amendment Act Passed
Nov 2024
Finalisation of AML/CTF Rules
Aug 2025
Core Guidance from AUSTRAC
Oct 2025
Sector-Specific Guidance
Early 2026
AUSTRAC Enrolment Opens
31 Mar 2026
Mandatory Compliance Commences
1 Jul 2026
International bodies and Australian regulators view dealers in precious goods as high-risk. Criminals are attracted to these products because they can be bought and sold with limited identification and are easy to conceal and transport.
Why this sector is a focus for regulators
International bodies and Australian regulators view dealers in precious goods as high-risk. Criminals are attracted to these products because they:
Can be bought and sold with limited identification.
Do not always require proof of ownership to sell.
Are compact, easy to conceal, transport and smuggle.
Can be melted, recut, or remodelled to disguise their origin.
Can be used directly as payment for illicit goods and services.
Can be used to mix criminal proceeds into apparently legitimate wealth.
Understanding your core trigger
The Activity
You buy or sell precious metals, stones, or products in the course of carrying on a business
The Value
The purchase involves ≥$10,000 in physical currency or virtual assets
Payment method matters: Only transactions involving physical currency (cash) or virtual assets (cryptocurrency) are captured. Card payments, BPAY, PayPal and bank transfers are not captured under this designated service.
Linked transactions: The $10,000 threshold applies to a single transaction OR several transactions that are linked or appear to be linked (e.g. lay-by arrangements, instalment payments, split invoices).
Key Definitions (s 5A)
Precious Metals (s 5A(1))
Gold, silver, platinum, iridium, osmium, palladium, rhodium, ruthenium, or any alloy with at least 2% weight of these metals. Includes manufactured or unmanufactured state.
Examples
- • Gold bars
- • Silver ingots
- • Platinum wire
- • Scrap gold
Precious Stones (s 5A(3)-(5))
Substances with gem quality and market-recognised beauty, rarity and value. Includes natural, synthetic or reconstructed stones.
Examples
- • Diamonds
- • Beryl (emeralds, aquamarine)
- • Corundum (rubies, sapphires)
- • Garnet, jadeite jade, opal, pearl, topaz
Precious Products (s 5A(6))
Items made from, containing, or having attached any precious metal or stone.
Examples
- • Jewellery (rings, necklaces, bracelets)
- • Watches with precious metals/stones
- • Objects of personal adornment (cufflinks, tie bars)
- • Goldsmiths'/silversmiths' wares
Goldsmiths' or silversmiths' wares include:
ML/TF/PF Risks in the Precious Metals Sector
Dealers in precious goods face significant money laundering (ML), terrorism financing (TF) and proliferation financing (PF) risks. The compact nature and high value of these products makes them attractive for criminal misuse.
Identity Verification
Customer due diligence
Inadequate verification of customer identity leading to onboarding of high-risk clients.
Unusual Transactions
Transaction monitoring
Failure to detect structured payments or unusual transaction patterns.
Sanctions Exposure
Prohibited dealings
Risk of inadvertently dealing with sanctioned entities or persons.
Beneficial Ownership
Ownership opacity
Complex ownership structures obscuring the true beneficial owners of assets or entities.
Who May Be Captured?
The key trigger is transactions at or above $10,000 paid in cash or virtual assets. Jewellers, bullion dealers, pawnbrokers and scrap buyers are all potentially in scope.
Bullion dealers
Gold, silver and platinum sales
Precious stone dealers
Diamond and gemstone transactions
Jewellers (high-value)
Transactions over prescribed thresholds
Numismatic dealers
Rare coin and collectible transactions
Refiners and smelters
Processing and refining operations
Whether you are captured depends on the designated services you provide. If unsure whether you're covered, please seek legal advice. Even if you are not covered, you may consider implementing guardrails to ensure you don't accidentally cross lines.
Identifying red flags: a practical guide
Behavioural Flags (The Customer's Actions)
- •Attempts to avoid or minimise ID checks.
- •Strong push for anonymity; insistence on using only cash/crypto.
- •Use of third parties without a clear commercial reason.
- •Requests that you 'forget' or minimise records.
- •Nervousness or reluctance when asked about source of funds.
Profile Flags (The Customer's Story)
- •Credible negative media linking the customer to crime.
- •Status as a Politically Exposed Person (PEP).
- •Lack of interest in the product itself; focus is only on value and liquidity.
- •Unusually high volume of activity relative to their apparent wealth or business profile.
Transactional Flags (The Nature of the Deal)
- •Repeated payments structured to stay just below the $10,000 threshold.
- •Use of complex ownership structures with no clear business purpose.
- •Rapid buying and selling of items, especially at a loss.
- •Funds or goods linked to high-risk countries or tax havens without a clear commercial reason.
Once you are a reporting entity, you have six fundamental compliance obligations
1. Enrol with AUSTRAC
Formally register your practice as a reporting entity.
2. Develop & Maintain an AML/CTF Program
Create a written, risk-based program tailored to your firm's specific ML/TF risks. This is the cornerstone of your compliance.
3. Conduct Customer Due Diligence (CDD)
Identify and verify your clients and their beneficial owners before providing a designated service, and monitor them on an ongoing basis.
4. Report to AUSTRAC
Submit Suspicious Matter Reports (SMRs) and Threshold Transaction Reports (TTRs) as required.
5. Keep Records
Maintain all relevant records of CDD, transactions and your AML/CTF program for prescribed periods.
6. Appoint an AML/CTF Compliance Officer
Designate a senior individual responsible for the oversight of your program.
Key AML/CTF Areas for Precious Metals Dealers
Under Tranche 2, precious metals dealers face new obligations when conducting high-value cash transactions. Our documentation helps you navigate these requirements with confidence.
Cash Transaction Controls
Procedures for managing and reporting cash transactions at or above the $10,000 threshold.
Customer Identification
Identity verification procedures for customers conducting high-value cash or virtual asset transactions.
Structuring Detection
Procedures to identify linked transactions designed to avoid the $10,000 threshold.
Trade-In Protocols
Compliance requirements for trade-ins, exchanges and part-payment transactions.
Source of Funds Enquiries
Procedures for understanding and documenting the source of funds for high-value purchases.
Suspicious Matter Reporting
Workflows for identifying, escalating and reporting suspicious matters to AUSTRAC.
Compliance Officer Duties
Appointment requirements, role description and ongoing responsibilities for AML/CTF compliance.
Building an AML Program
Building an AML/CTF program for a precious goods dealer requires multiple steps.
- AML/CTF program framework for precious goods dealers
- Risk assessment worksheet (ML/TF/PF risks)
- Customer identification and verification procedures
- Cash handling and threshold reporting controls
- Trade-in and exchange compliance workflows
- Suspicious matter reporting procedures
- Staff Training Register for tracking completion
- Compliance officer role description
Ready to Get Started?
We can help you get a headstart on your AML/CTF program. Program packs from $249, licensed to you permanently. Portal is free with managed CDD, or run your own CDD on BYO-API plans from $20/month.
A HeadStart on Compliance
Sector-specific compliance documents to help you build your AML/CTF program.
Ready-to-Customise Resources
Lawyer-ready to review for your business.
Training & Record-Keeping
Staff Training Register, Compliance Officer appointment documents and portal-based training record-keeping.
From $249 inc GST · or bring your own program
HeadStart Docs™ products are developed with reference to publicly available regulatory guidance. This is general information only and does not constitute legal or professional advice. You should seek advice specific to your circumstances before making compliance decisions.