The purpose of this document is to highlight the new legislative requirements under the Proceeds of Crime (Money Laundering) Terrorist Financing Act (PCMLTFA) which applies to Dealers in Precious Metals and Stones (DPMS) effective on December 30, 2008. A DPMS is defined as a person or an entity that, in the course of its business activities, buys or sells precious metals, precious stones or jewelry, generally for purposes other than manufacturing. A DMPS will have to comply with the Anti-money Laundering (AML) regulations and have a Compliance Regime in place by December 30, 2008.
CS Toronto contacted Mr. Ken Mulhall, President and CEO of the Canadian Jewellers Association, who stated that up to this date these were the only requirements pertaining to Dealers in Precious Metals and Stones under the Proceeds of Crime (Money Laundering Terrorist Financing ACT (PCMLTF). The Canadian Jewellers Association and the Financial Transactions and Reports Analysis Centre of Canada are working together on this issue.
As of December 30, 2008 a Dealer in Precious Metals and Stones (DPMS) is subject to the requirements listed below if they engage in the purchase or sale of precious metals, precious stones or jewelry in an amount of $10,000 or more in a single transaction. In other words, you are not subject to these requirements if you engage only in purchases or sales less than $10,000 per transaction.
The purchases or sales referred to above exclude those carried out for, connected with, or for the purpose of:
- manufacturing jewelry
- extracting precious metals or precious stones from a mine; or
- cutting or polishing precious stones.
In other words, if all your purchases and sales are related to these manufacturing, extracting, cutting or polishing activities, you are not subject to these requirements.
If you are an agent of the Crown (i.e. a government department or an agent of her Majesty in right of Canada or of a province), you are also considered a dealer in precious metals and stones and subject to the requirements listed below if you ever sell precious metals to the public in an amount of $10,000 or more in a single transaction.
Precious metals include gold, silver, palladium, whether in coins, bars, ingots, granules or in any other similar form. Precious stones include diamonds, sapphires, emeralds, tanzanite, rubies or alexandrite. Jewelry means, precious stones or pearls intended for personal adornment.
If you are an employee of a reporting entity, these requirements are the responsibility of your employer except with respect to reporting suspicious transactions and terrorist property, which is applicable to both.
By Elizene Osores and Marjan Mijic