A spokesperson for the Attorney-General’s Department (AGD) confirmed that a cost-benefit analysis was being conducted to determine if certain business sectors posing money laundering and terrorism financing risks should be added to the government’s AML/CTF regime. High-value dealers (HVDs), which includes the jewellery industry, is one of the sectors being evaluated.
The government’s spokesperson told Jeweller that consulting firm KPMG was performing the analysis on behalf of the AGD and that a questionnaire was sent to a select number of jewellery retailers and suppliers to gather information about the potential impact of the AML/CTF regulation.
“The questionnaire guides participants through an exercise designed to determine how much complying with AML/CTF obligations will cost their business,” they explained, adding that two jewellery industry “peak bodies” were responsible for distributing the survey to members.
Nationwide Jewellers managing director Colin Pocklington said his buying group was one of these organisations and that the questionnaire was forwarded to seven retail members and six preferred suppliers. Those selected included retailers located in capital, regional, country and metropolitan areas as well as suppliers specialising in loose diamonds, diamond manufacturers/wholesalers and other product categories.
Proposed regulations: second stage
Under the government’s proposal, AML/CTF regulations would be imposed on HVDs involved in a cash transaction equal to or above $10,000. The transaction must be carried out in a single operation or in several operations that appeared to be linked.
Businesses would be required to comply with a number of obligations, including enrolling with the Australian Transaction Reports and Analysis Centre (AUSTRAC), performing customer due diligence, lodging reports and implementing compliance programs.
The AML/CTF regime was introduced in 2006 and currently includes bullion dealers, financial institutions and gaming service providers.
The spokesperson said the deadline for questionnaire submissions was 20 April and that KPMG’s analysis would be presented to Minister for Justice Michael Keenan by the end of the financial year.
They added that the AGD was unable to advise on a proposed timeline for the regime’s implementation should the government decide to include the jewellery sector.
According to government documentation, HVDs are classified as businesses involved in the buying and selling of high-value goods commonly considered to include jewellery, antiques and collectibles, fine art, yachts and luxury motor vehicles. The buying and selling of high-value goods are recognised internationally as an avenue for money laundering activity and to finance terrorism.