A comprehensive guide to AML compliance for dealers in precious metals and stones under Australia’s Tranche 2 reforms.
Dealers in precious metals and stones are among the sectors expected to be captured under Australia’s Tranche 2 Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reforms.
Precious metals such as gold, silver and platinum, as well as high-value gemstones and jewellery, can be used to store and transfer wealth. Because these assets can be easily traded, transported and converted into cash or other financial assets, they may be attractive to individuals seeking to conceal illicit funds.
From 1 July 2026, businesses that buy or sell precious metals, precious stones or precious products may become reporting entities under the AML/CTF Act 2006 where their transactions fall within the scope of designated services defined in the legislation.
Businesses captured under the reforms will be required to enrol with AUSTRAC and implement AML compliance systems to identify and manage money laundering and terrorism financing risks.
Precious metals and gemstones possess several characteristics that make them attractive for money laundering or illicit financial activity.
These assets are typically:
Because of these characteristics, precious metals and stones may be used to:
As a result, international financial crime frameworks — including those developed by the Financial Action Task Force (FATF) — recognise dealers in precious metals and stones as a sector exposed to potential money laundering risk.
Whether a business has AML/CTF obligations depends on whether it provides a designated service under the AML/CTF Act.
For dealers in precious metals and stones, a designated service may arise when a business:
buys or sells precious metals, precious stones or precious products in the course of carrying on a business, where the transaction:
Where these conditions are met, the business is considered to be providing a designated service and will be required to comply with AML/CTF obligations.
However, if the purchase or sale is completed only using a debit card, credit card or bank transfer, the transaction will generally not constitute a designated service under the Act.
The AML/CTF Act defines several categories of regulated items.
Precious Metals
Precious metals include:
This definition also includes alloys containing at least 2% by weight of any of these metals, whether in manufactured or unmanufactured form.
Precious Stones
Precious stones are substances of gem quality with recognised market value.
Examples include:
The definition includes both natural and synthetic stones, provided they possess recognised beauty, rarity and value in the market.
Precious Products
Precious products include items that contain or incorporate precious metals or stones.
Items of personal adornment such as belts, hair clips or other accessories may also qualify as precious products where they contain precious metals or stones.
A key concept in the AML/CTF framework is linked transactions.
A designated service may arise where multiple transactions appear to be connected and together exceed the $10,000 threshold.
Examples of linked transactions may include:
For example, a customer may purchase a gold item worth $15,000 and pay through three instalments of $5,000 each.
Even though each individual payment is below the $10,000 threshold, the transactions are linked and therefore collectively constitute a designated service.
Common risks in this sector include:
High-Value Cash Purchases
Precious metals may be purchased using large volumes of cash or virtual assets.
Transactions involving physical currency may present elevated financial crime risks, particularly where the customer cannot provide a clear explanation for the source of funds.
Portable Wealth
Gold and gemstones can store significant value in small quantities.
These assets may be transported across borders or exchanged internationally, allowing individuals to move wealth outside regulated financial systems.
Anonymous Transactions
Transactions involving precious metals may occur with limited customer identification.
AML regulations aim to ensure businesses identify the individuals involved in high-value purchases.
Structuring or Linked Transactions
Customers may deliberately split purchases into smaller transactions below regulatory thresholds.
Without effective transaction monitoring systems, businesses may fail to detect these linked transactions.
Dealers in precious metals and stones who provide designated services will be required to implement AML compliance systems.
These obligations may include:
AML Compliance Lifecycle for Precious Metals Dealers
Risk Assessment
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AML Compliance Program
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Customer Identification
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Transaction Monitoring
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Suspicious Matter Reporting
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Ongoing Compliance Review
Customer Identification
Before providing a designated service, businesses must undertake customer identification procedures.
This may involve verifying:
Customer due diligence helps ensure businesses understand who they are dealing with and reduces the risk of anonymous high-value transactions.
Monitoring Precious Metal Transactions
Businesses should implement systems capable of identifying transactions that meet the designated service threshold.
Monitoring processes may involve reviewing:
These indicators may warrant further review.
Suspicious Matter Reporting
Where suspicious activity is identified, businesses may need to submit a Suspicious Matter Report (SMR) to AUSTRAC.
SMRs provide important financial intelligence used by law enforcement agencies to detect and disrupt criminal activity.
Reporting guidance is available here:
Reporting
Businesses should begin preparing for AML compliance well before the 1 July 2026 commencement date.
Preparation may involve:
Bravishi Advisory works with businesses across affected sectors to translate AML regulatory requirements into practical compliance structures.
Support may include:
