Aml Ctf Obligations Bullion Dealers

According to AUSTRAC guidance, aml ctf obligations bullion dealers are critical requirements for businesses that buy or sell bullion. Bullion dealers have been reporting entities under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 for several years due to the significant money laundering and terrorism financing risks they face. AUSTRAC defines bullion dealers as businesses that buy or sell bullion and may include precious metal traders, refiners, jewellers, coin dealers and pawn brokers.

Bullion generally refers to gold, silver, platinum or palladium authenticated to a specified fineness, in investment-grade forms such as bars, ingots, plates, wafers or similar mass forms. Buying and selling bullion in the course of carrying on a bullion-dealing business is a designated service that triggers AML/CTF obligations. However, buying or selling bullion in a private capacity where you are not carrying on a bullion business is not a designated service. Buying or selling bullion may not necessarily involve the customer taking physical possession of the bullion.

The Tranche 2 reforms from 1 July 2026 extend obligations to dealers in precious metals, stones and products for transactions of $10,000 or more in physical currency or virtual assets. This broader category includes precious metals such as gold, silver, platinum and other specified metals, precious stones including diamonds, rubies, sapphires, emeralds and other gem-quality stones, and precious products being items made of, containing, or having attached any precious metals or stones including jewellery, watches and other items. Existing bullion dealers must adapt to strengthened expectations while new dealers in precious metals and stones come under regulation.

Bullion dealers must enroll with AUSTRAC and keep their enrollment details up to date including ownership structure, contact people and services offered. If diversifying into non-bullion precious metals or virtual assets, dealers must monitor AUSTRAC's Tranche 2 guidance pages closely and update their enrollment to include new designated services. Customer identification procedures are required for all bullion transactions, with an exemption for purchases or sales where the retail value is less than $5,000. However, if ongoing customer due diligence purposes require obtaining, updating or verifying customer information, procedures must be carried out regardless of transaction amount.

Your AML/CTF program must explicitly reference AUSTRAC's risk assessment for the bullion sector and indicators of suspicious activity for bullion transactions. The program must include a comprehensive money laundering and terrorism financing risk assessment specific to your bullion business, considering the types of customers you serve, products you deal in, transaction methods accepted, and geographical locations of operations. Your risk assessment must identify vulnerabilities that criminals might exploit such as high-value cash transactions, complex supply chains, customer anonymity, trade-based laundering schemes, and links between bullion transactions and other high-risk activities like gambling.

Customer due diligence requirements mandate identifying and verifying customers before providing designated services. This includes collecting and verifying customer identification information using reliable and independent sources such as government-issued identity documents and the Document Verification Service. For business customers, you must identify beneficial owners, verify the entity's legal status, and understand the nature and purpose of the business relationship. Enhanced customer due diligence must be applied for high-risk customers including politically exposed persons, customers from high-risk jurisdictions, and situations where suspicions are formed but you propose to continue the relationship.

Transaction monitoring systems must be appropriate to your business to detect unusual patterns or suspicious activity. Common indicators of suspicious activity in the bullion sector include customers who are reluctant to provide identification, unusual cash transaction patterns, purchases inconsistent with the customer's apparent financial means, rapid buying and selling of bullion without clear purpose, customers who appear to be acting on behalf of undisclosed third parties, transactions involving high-risk jurisdictions, and purchases that appear designed to avoid reporting thresholds through structuring.

Reporting obligations include submitting suspicious matter reports to AUSTRAC within three business days of forming reasonable grounds to suspect a customer or transaction is linked to money laundering, terrorism financing, people smuggling or other serious crimes. Threshold transaction reports must be lodged for transactions involving physical currency of $10,000 or more. International funds transfer instruction reports are required for instructions to transfer funds into or out of Australia. Annual compliance reports must describe how your business met its AML/CTF obligations during the previous calendar year. All records must be maintained for at least seven years to provide evidence of your compliance activities and to support law enforcement investigations when required.