AUSTRAC and regulators classify precious metals dealers in Australia as high money‑laundering risk due to high‑value, portable assets often traded in cash or virtual assets. Criminals have been exploiting this industry via trade‑based laundering, false invoices, smuggling, and refined concealment of illicit gold.
The AML/CTF Amendment Act 2024 and Tranche 2 Reforms
These reforms aim to close longstanding regulatory gaps in gatekeeper professions and other Tranche 2 sectors identified by FATF as vulnerable to money laundering. The government has allocated substantial funding to AUSTRAC and agencies to support implementation and enforcement, including public sector consultations and sector‑specific guidance. The precious metals and stones dealers are now clearly identified as high-risk, and from mid‑2026 will be required to operate under Australia’s enhanced AML/CTF regime.
Dealers in precious metals and stones must enrol with AUSTRAC by 31 March 2026 and achieve full compliance by 1 July 2026.
Designated Services That Trigger Obligations
Any dealer providing:
- Buying or selling precious metals/stones worth A$10,000+ in cash or virtual assets
- Facilitating, brokering, transporting or storing such assets
- Refining, wholesale/retail trade, or providing loans secured against them
Such activities make the dealer a regulated reporting entity under the AML/CTF Act.
Typical Money Laundering Techniques Used in the Sector
Criminals exploit the sector via:
- Large cash purchases to avoid oversight
- Smuggling or refining illicit gold/stones to anonymise origins
- Trade‑based laundering with over‑ or under‑invoicing
- Structuring transactions or shell companies to mask funds
- Use of repeated or circular resale transactions to layer and obscure illicit funds
Indicators of Suspicious Activity
AUSTRAC highlights red flags including:
- Multiple cash purchases or structured under thresholds
- Customers using private mailboxes or having unrelated business profiles
- Requests to ship bullion to high-risk jurisdictions
- Sudden spikes in orders without a clear business purpose
Compliance Obligations for the Precious Metals Dealers in Australia
Dealers must establish and maintain:
- Enterprise‑wide ML/TF risk assessment
- AML/CTF programs tailored to dealer‑specific risk
- Customer identification (CDD) and enhanced due diligence (EDD)
- Transaction monitoring and suspicious matter reporting
- Periodic independent reviews (every 3 years) and 7‑year data retention
At a Glance
As Australia tightens its financial crime controls, the precious metals and stones sector can no longer remain a blind spot. The value, portability, and liquidity of these assets make them an attractive vehicle for money laundering, and the regulatory shift reflects this reality.
By preparing early, implementing tailored risk assessments, customer due diligence, and robust monitoring, dealers can avoid disruption, safeguard their reputation, and help close one of the most exploited gaps in Australia’s financial ecosystem. The gold standard is no longer just about the asset itself; it’s now about the integrity of how it’s traded.
Navigate the New Compliance Landscape Smoothly by Partnering with NameScan
NameScan helps businesses of all sizes – from small firms and mid-tier practices to large enterprises – navigate the complexities of Tranche 2 compliance with ease. Our flexible screening and verification solutions help entities meeting the unique needs of each organisation, ensuring they can identify risks, and remain compliant without unnecessary overheads. Our Pay-As-You-Go (PAYG) model allows businesses to access powerful compliance tools without committing to long-term contracts or large upfront costs.
FAQs
What is Tranche 2 in Australia?
Tranche 2 refers to the long-anticipated reforms to Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime. It extends obligations to ‘Designated Non-Financial Businesses and Professions’ (DNFBPs), such as lawyers, accountants, real estate agents, trust and company service providers, and dealers in precious metals and stones.
Why is Tranche 2 being introduced?
Australia has been under pressure from the Financial Action Task Force (FATF) to bring DNFBPs into the AML/CTF regime, as these sectors are often exploited by criminals to launder money and finance terrorism. Tranche 2 aims to close regulatory gaps and strengthen Australia’s defences against financial crime.
Who will be affected by Tranche 2?
Lawyers, conveyancers, accountants, real estate agents, trust and company service providers, and dealers in precious metals and stones will need to comply with AML/CTF obligations such as customer due diligence, record-keeping, reporting, and risk assessments.
What obligations will businesses have under Tranche 2?
Obligations are expected to include customer due diligence (CDD), ongoing monitoring, suspicious matter reporting, record-keeping, and establishing an AML/CTF compliance program tailored to the business’s risk exposure.
How can businesses prepare for Tranche 2?
Businesses should start assessing their risk exposure, reviewing customer onboarding processes, and exploring AML/CTF solutions for due diligence and ongoing monitoring. Early preparation will make the transition smoother once the reforms take effect.
0 Comments