Contents
- Valuables
- Money Laundering and Terrorist Financing risks arising from the trade in precious metals, precious stones, jewelry and watches
- FATF „Guidance on the Risk-Based Approach for Dealers in Precious Metals and Stones“
- FATF Report on „Money Laundering and Terrorist Financing through Trade in Diamonds“
- RED FLAGS AND INDICATORS FOR REGULATED ENTITIES
- RED FLAGS AND INDICATORS FOR DIAMOND DEALERS
- Customer or supplier related red flags and indicators
- Red flags related to the sale or purchase of diamonds (transaction)
- Red flags and indicators related to the use of third parties
- Red flags and indicators relating to the use of suspected/falsified documents
- Red flags and indicators relating to the method of payment
- Red flags and indicators related to geographic location/country
- RED FLAGS AND INDICATORS FOR CUSTOMS
- FATF „Money laundering and terrorist financing risks and vulnerabilities associated with gold“
- German GwG
- Joint Interpretation and Application Guidelines of the Federal States of the Federal Republic of Germany
Valuables
The trade in precious metals, precious stones, jewelry, and watches represents a highly lucrative and diverse industry with a rich history that spans centuries.
This sector is known for its opulence, beauty, and cultural significance, as well as its potential for significant financial transactions.
However, like any thriving industry, it is not immune to the illicit activities of money laundering and terrorist financing (ML/TF).
Money Laundering and Terrorist Financing risks arising from the trade in precious metals, precious stones, jewelry and watches
Precious Allure
Valuables such as gold, diamonds, gemstones, and luxury timepieces possess unique qualities that make them irresistible to criminals. Their intrinsic value remains stable over time, enabling the conversion of ill-gotten gains into a legitimate asset. These treasures are compact, portable, and easy to hide, making them perfect for discreetly moving wealth. Transactions can be conducted anonymously, and their high values allow criminals to launder substantial sums.
Regulatory Safeguards
To combat these risks, international and national regulatory frameworks, like those set forth by the Financial Action Task Force (FATF), have been established. These regulations aim to enhance transparency, reporting, and due diligence within the industry. Industry professionals, dealers, and retailers are required to adhere to strict compliance measures.
Red Flags and Risk Indicators
Vigilance is key to identifying and preventing ML/TF activities within this industry. Be on the lookout for red flags and risk indicators, such as unusual transaction patterns, unverified customers, or cash-heavy dealings. Recognizing these signs is crucial in maintaining the integrity of the valuables trade.
Real-World Examples
Delve into case studies that expose the methods employed by criminals to exploit the valuables trade. From intricate international networks to cash transactions, these examples shed light on the ever-evolving tactics used for illicit gains.
Challenges and Solutions
The complexities of this industry, including its global reach and susceptibility to trade-based money laundering, present unique challenges. However, through international cooperation, information sharing, and the implementation of best practices, these challenges can be overcome.
Guardians of Elegance
In the world of precious metals, stones, jewelry, and watches, stakeholders must act as guardians of elegance, ensuring that the industry remains untarnished by the shadow of illicit activities. By understanding the risks and working together, we can preserve the allure of these treasures while safeguarding against those who seek to exploit them.
FATF „Guidance on the Risk-Based Approach for Dealers in Precious Metals and Stones“
The FATF has issued guidance on the Risk-Based Approach (RBA) for dealers in precious metals and stones. This guidance has been developed in collaboration with representatives from the precious metals and precious stones industries and is aimed at combatting money laundering and terrorist financing within these sectors.
FATF Report on „Money Laundering and Terrorist Financing through Trade in Diamonds“
The FATF Report on „Money Laundering and Terrorist Financing through Trade in Diamonds“ highlights the vulnerabilities and risks associated with the global diamond trade. The report is the result of a typologies research project conducted in collaboration between the FATF (Financial Action Task Force) and the Egmont Group of Financial Intelligence Units. It encompasses all sectors of the diamond trade, including production, rough diamond sale, cutting and polishing, jewelry manufacturing, and jewelry retailers.
Key findings and observations from the report include:
- Vulnerabilities in the Diamond Trade: The report identifies that the diamond trade is subject to significant vulnerabilities and risks. These vulnerabilities arise from the closed and opaque nature of diamond markets, the high value of diamonds, and a lack of expertise among authorities in regulating this industry. Criminals have exploited these vulnerabilities for money laundering and terrorist financing activities.
- Evolution of the Diamond Trade: While the diamond trade has a long history, it has undergone significant changes in recent decades. De Beers, once a dominant force, no longer holds a monopoly on diamonds. Smaller dealers have entered the market, distribution channels have diversified, new trade centers have emerged, and cutting and polishing have shifted to countries like India and China. The use of cash in transactions is decreasing, and the internet has become a prominent platform for diamond trading.
- Changing Risks and Vulnerabilities: Given the transformation of the diamond trade, the report questions whether the risks and vulnerabilities remain the same. It examines whether existing anti-money laundering and countering the financing of terrorism (AML/CFT) standards and national regulations are adequate in addressing the evolving risks.
- Creative Methods by Criminals: The report presents case studies that illustrate the inventive methods criminals have employed to exploit the diamond trade for money laundering and terrorist financing. These case studies serve as examples of the various tactics used to abuse the industry.
- Global Nature of the Trade: The diamond trade is inherently transnational and complex, making it a convenient vehicle for money laundering and terrorist financing transactions. Criminal activities often involve international and multi-jurisdictional aspects.
- Use of Diamonds as Currency: Diamonds are challenging to trace and offer anonymity in financial transactions, making them attractive to criminals seeking to hide the origins of illicit funds.
- Trade-Based Money Laundering (TBML): The report highlights that the specific characteristics of diamonds as a commodity, coupled with the high volume of international transactions, make the diamond trade susceptible to trade-based money laundering techniques, particularly over/under valuation of diamonds.
- High Transaction Amounts: The diamond trade involves transactions worth tens of millions to billions of US dollars, making it possible to launder significant amounts of money. This also escalates the level of risk associated with the industry.
- Limited Awareness: Law enforcement agencies and AML/CFT authorities, including financial intelligence units (FIUs), often have limited awareness of potential money laundering and terrorist financing schemes within the diamond trade. This lack of awareness poses challenges in detecting and preventing illicit activities effectively.
RED FLAGS AND INDICATORS FOR REGULATED ENTITIES
Red flags and indicators relating to trade practices
- Profit is unlikely with respect to the investment of a diamond dealer.
- Diamonds originate from a country where there is limited production or no diamond mines at all.
- Trade in large volumes conducted with countries which are not part of the „diamond pipeline“.
- An increase of the volume of the activity in a diamond dealer’s account despite a significant decrease in the industry-wide volume.
- Selling or buying diamonds between two local companies through an intermediary located abroad (lack of business justification. uncertainty as to actual passage of goods between the companies).
- Volume of purchases and/or imports that grossly exceed the expected sales
amount - Sale of gold bars, coins, and loose diamonds from a jewellery store (retail).
- Payments related to the appearance of rare or unique diamonds in the
international market outside of known trading procedures (e.g. Argyle’s
rare pink diamond appearing in the international marketplace outside of
the annual tender process). This to the best knowledge of the financial
institution. - A single bank account is used by multiple businesses.
- Unusual forms of payment in the diamond trade, for example, use of
travellers cheques (all stages according to the accepted forms of payments). - Date of payment not customary in the trade, (e.g. receiving/sending funds
for a diamond deal conducted a very long time ago (outside accepted
payment terms). Or, a customer paying upfront where the customary
payment date is within a 120 days term. - Financial activity is inconsistent with practices in the diamond trade. For
example,- Foreign currency deposits followed by currency conversion and cash
withdrawal in local currency. - Cheque deposits followed by immediate cash withdrawals in slightly
lower amounts (possible use of the diamond dealer account for
cheques discounting). - Transfers of foreign currency and/or foreign currency cheques
deposits, followed by currency conversion and immediate withdrawal
from the account (possible use of the diamond dealer account for
exchange services).
- Foreign currency deposits followed by currency conversion and cash
- No economic rationale for transactions involving an individual or company
in the diamond industry. - Deposits or transfers to a diamond dealer’s account from foreign companies
followed by immediate transfer of similar amounts to another jurisdiction. - Immediately after a diamond dealer’s related account is opened, highvolume and high-value account activity is observed.
- Transactions between accounts of different companies which are affiliated
with the same customer, particularly to or from Free Trade Zones or
countries with tax leniencies (may be an indication of transfer pricing or
trade mispricing). - Open export is settled by offsetting to, and receiving payment from, a
third party. - Open export is settled abroad by offset in front of the importer.
- Settling an open export invoice with unrelated companies that engage in
diamonds and not through value/return from abroad or return of goods to
the diamond merchant. - Details of the transaction are different from the details of the commercial
invoice presented by the diamond dealer to the bank (name of
importer/exporter, sum, place etc.). - High-value funds deposited or transferred to an account described as short
term loans with no transactions showing repayment of loans. - Early repayment of diamond dealer’s loan (a loan for 25 years is repaid
after five month) with no reasonable explanation. - Sale of diamonds and jewellery at small incremental amounts (retail).
- Multiple cheques drawn on the same diamond dealer’s account on the same
day. - Origin/destination of funds is different from the destination/origin of the
diamonds. - Diamond dealer account is credited by transactions with no evidence of
diamonds sales. - Numerous returns of advanced payments.
Customer-related red flags and indicators - Activity does not match KYC, for example:
- Actual trade volumes are significantly larger than the expected
volume. - Customers and/or suppliers of the customer do not correspond to the
stage of the trade initially declared.
- Actual trade volumes are significantly larger than the expected
- Diamond dealer is not familiar with trade practices.
- Diamond dealer maintains high level of secrecy.
- Diamond dealer conducting activity in a branch not specializing in
diamonds (where such branches exist). - Use of a bank account in the name of a charity122 to transfer funds to/from
diamond dealers. - Frequent changes in company name and contact person for a business in
the diamond industry (mainly wholesale)
- Customer consults a third party while conducting transactions.
- Receiving/transferring funds for import/export activity to/from entities that are not known to be involved in the diamonds trade (either an individual or a legal entity).
- Return of an advanced payment from a third party.
- Receiving/transferring funds for import/export where the ordering customer/beneficiary is an MSB.
- Use of third parties to deposit funds into single or multiple diamond dealers‘ accounts.
- Return of an advanced payment from a third party.
- Name of sender in the payment transfer to the diamond dealer is not the importer/buyer (mainly rough and polished trade).
- Name of receiver in the payment from the diamond dealer is not the exporter/supplier.
- A single bank account with multiple deposit handlers (retail and wholesale).
Red flags and indicators relating to the use of missing/suspicious/falsified documents
- KP certificate is or seems to be forged.
- Long validity of a KP certificate123.
- Transfers of funds or an attempt to transfer funds through a diamond company’s account without producing appropriate documentation.
- Diamond dealer claims funds received/transferred are an advanced payment without producing any appropriate export/import invoice to support it.
- Transfers between a diamond company and a private account that are reported to the bank as diamond transactions, without presenting appropriate documentation.
- Invoice presented by the diamond dealer appears to the bank as unreliable/fake.
- Failing to provide a customs declaration in relation to a foreign currency cash deposit resulting from selling precious stones abroad.
RED FLAGS AND INDICATORS FOR DIAMOND DEALERS
- Purchases or sales which are unusual for customer or supplier (all stages of the trade).
- From what the diamond dealer knows about the customer or supplier, the transaction appears to him to be illogical from a business or economic point of view (all stages of the trade).
- Customer or supplier does not hold a position within a company they claim to represent (all stages of the trade).
- Customer or supplier is not familiar with trade practices (all stages of the trade).
- Customer or supplier maintains high level of secrecy (all stages of the trade).
- Customer or supplier known for their involvement in trafficking conflict diamonds (mainly rough trade. Could apply to diamond dealer who is involved in both rough trade and polished trade)
- Customer indiscriminately purchases merchandise without regard for value/price, size or colour (all stages of the trade).
- Sale of illicit goods from a jewellery store, such as counterfeit jewellery (retail and wholesale).
- Sale of gold bars, coins, and loose diamonds from a jewellery store (retail).
- Purchases or sales that are not in conformity with standard industry practice (all stages of the trade).
- Origin/destination of funds differs from the destination/origin of the diamonds (mainly rough trade and polished trade).
- Diamonds are not accompanied by a valid KP certificate.
- Diamond cutters receiving unwashed and uncut diamonds where the source of the diamonds is unknown or questionable (rough trade).
- The appearance of rare diamonds in the international market outside of known trading procedures (e.g., Argyle’s rare pink diamond appearing in the international marketplace outside of the annual tender process. (rough trade, cutting and polishing).
- Selling or buying diamonds between two local companies through an intermediary located abroad (lack of business justification. uncertainty as to actual passage of goods between the companies).
- Purchase of diamonds with a credit card issued in a country which is not the buyer’s country (where credit cards are used, mainly retail).
- Regular interval purchases, rather than seasonal purchases from foreign wholesaler (retail especially, less so with diamond dealers and wholesalers).
- Buying of diamonds or jewellery and reselling even at wholesale price (retail).
- Customer is known to purchase of diamonds off the street (retail).
- Use of third parties to sell diamonds jewellery where this is not acceptable in terms of trade practices (all stages).
- Use of third parties including relatives to conduct transactions/receive payments where this is not acceptable in terms of trade practices (all stages).
- Customer or supplier consults a third party while conducting transactions (all stages of the trade).
- Purchase of diamond or jewellery from a company abroad (funds are sent to the selling company) and receiving the diamonds from a third company (rough trade, polished trade, jewellery).
Red flags and indicators relating to the use of suspected/falsified documents
- KP certificate is or seems to be forged.
- Long validity of a KP certificate
Red flags and indicators relating to the method of payment
- High-value cash purchases of diamonds particularly in non-cash jurisdiction and/or non-cash stage of trade (all stages and depending on jurisdiction).
- A customer paying for high-priced jewellery with cash only (mainly retail).
- Unusual means of payment in the diamond trade, for example, use of traveller’s cheques, cashier’s cheques or money orders. Higher risk where they are sequentially numbered (all stages of the trade).
- Customer or supplier appears to be indifferent to the date of payment (all stages of the trade).
- Paying for diamonds with cheque and noting on the cheque the payment is for something else (retail and wholesale).
- Customer attempt to use a third party cheque or a third party credit card.
- The customer or supplier appears to be related to a high-risk jurisdiction (all stages of the trade).
RED FLAGS AND INDICATORS FOR CUSTOMS
- Origin of diamonds seems to be fictitious.
- The long validity period of the KP Certificate opens up possibilities for reuse and setting up a carousel.
- Low invoice amount.
- Overvaluation of imported good.
- The consignee doesn’t specify a permanent address on the airway bill but makes use of a hotel, or other temporary accommodation, to receive the shipment, complicating the audit trail.
- The consignee specified on the airway bill is a known diamond dealer, but a different delivery address is provided.
- The diamond appears to have been shipped as a form of payment.
FATF „Money laundering and terrorist financing risks and vulnerabilities associated with gold“
The FATF report on „Money Laundering and Terrorist Financing Risks and Vulnerabilities Associated with Gold“ highlights the attractiveness of gold to criminals as an alternative means to store or move illicit assets. This report, jointly produced by FATF (Financial Action Task Force) and APG (Asia-Pacific Group on Money Laundering), emphasizes the unique features of gold that make it an appealing vehicle for money laundering and terrorist financing. Here are the key points from the report:
- Alternative Asset Storage: As regulatory authorities continue to strengthen anti-money laundering (AML) and counter-terrorist financing (CTF) measures within the formal financial sector, criminals seek alternative methods to store or move their illicit assets. Gold presents an attractive option for this purpose.
- Stable Value: Gold is known for its stable value, making it a reliable store of wealth. Criminals can use gold to preserve the value of their ill-gotten gains over time, reducing the risk of asset depreciation.
- Anonymity: Gold transactions can offer a high degree of anonymity. This anonymity is particularly appealing to criminals, as it makes it challenging for authorities to trace and identify the individuals or entities involved in gold-related illicit activities.
- Transformability and Interchangeability: Gold is easily transformable and interchangeable. Criminals can convert it into various forms, such as jewelry, coins, or bullion, making it more adaptable for concealment and movement.
- Lucrative Gold Market: The gold market is highly profitable and offers significant profit-generating opportunities for criminals at every stage of the gold supply chain, from mining to retailing. This presents attractive prospects for illicit financial gain.
- Similarities to Precious Metals and Stones: The report draws parallels between the appeal of gold and other precious metals and stones, such as diamonds, to criminals seeking to legitimize their assets and generate profits through illicit means.
- Case Studies: The report includes a series of case studies that illustrate how criminals have exploited the gold market for money laundering and terrorist financing. These cases provide real-world examples of the risks and vulnerabilities associated with gold.
- Red Flag Indicators: The report also offers red flag indicators to raise awareness among AML/CTF practitioners and companies operating in the gold industry. These indicators help stakeholders identify suspicious activities and transactions within the gold sector.
RED FLAGS ML/TF ACTIVITY AND UNDERLYING PREDICATE CRIME ACTIVITY
CUSTOMER BEHAVIOUR
- Established customer (including bullion dealers) dramatically increasing
his purchase of gold bullion for no apparent reason. - Foreign nationals purchasing gold bullion through multiple transactions
over a short time period. - Bullion transferred among associates using bullion accounts (including
family members) for no apparent commercial purpose. - Occupation inconsistent with customer’s financial profile. For example, the
customer may list their occupation as ‘student’ or ‘truck driver’ yet transfer
large values of funds to bullion accounts. - Customer buying gold bullion and using a General Post Office (GPO), or
private service provider, mail box as their address, without listing a
corresponding box number. - Unusual pattern of bullion transactions and the nature of the transactions
are inconsistent with the customer profile. - A previously unknown customer requesting a refiner to turn gold into
bullion.
COMPANY BEHAVIOUR
- Non-reporting to the FIU by the gold industry organisations (where there is
an obligation to report). - Changes to business name of entities registered to deal in gold.
- Registration of a trading company in a tax haven even though its business
relates to another jurisdiction. - Movement of abnormally large sums of money in various accounts of the
individuals and companies which are not related to the nature of their
business. - Unusual deposits i.e. use of cash or negotiable instruments (such as
traveller’s cheques, cashier’s cheques and money orders) in round
denominations (to keep below reporting threshold limit) to fund bank
accounts and to pay for gold. The negotiable instruments may be
sequentially numbered or purchased at multiple locations and may
frequently lack payee information. - Numerous sole proprietorship businesses/private limited companies set up
by seemingly unrelated people (proxies) but controlled by the same group
of people. False addresses are used to register such businesses. - Use of a corporate structure of shell companies located across the
jurisdictions. - Significant number of companies registered to one natural person.
- Commercial activities are not easy to track as the companies are registered
elsewhere. - No clarity of how the company transports the merchandise it has bought.
TRADE-BASED BEHAVIOUR (ALSO RELATED TO TRADE-BASED MONEY LAUNDERING)
- Cash payments for high-value orders are an indication of trade based
money laundering (TBML) activity. - Misclassification of gold purity, weight, origin and value on customs
declaration forms. - Gold is shipped to or from a jurisdiction designated as ‘high risk’ for money
laundering activities or sensitive / non co-operative jurisdictions. - Gold is transhipped through one or more such high risk / sensitive
jurisdictions for no apparent economic reason. - Consignment size or type of commodity being shipped appears inconsistent
with the scale or capacity of the exporter or importer’s having regard to
their regular business activities or the shipment does not make economic
sense i.e. there is no reasonable explanation for the client’s financial
investment into the shipment. - The transaction involves the use of front or shell companies. Both shell and
front companies can be used to facilitate TBML but in different ways. A shell
company has no real operating activity and is used to hide money
laundering activity and the identities of individuals involved so as to
obscure the money trail. If activity is traced to the company it is literally an
empty shell.
PRODUCT DIFFERENTIATION
- The bullion has physical characteristics that are inconsistent with industry
standards. - Gold prices higher than those of the local gold market.
PAYMENT BEHAVIOUR
- A number of affiliated entities in the payments chain.
- Transit movement of funds and changes in purposes of payments.
- Payments to shell companies with further withdrawals.
- Granting of loans (with zero interest rates) to foreign companies.
- Granting of loans (with zero interest rates) to natural persons.
- Natural person or business sells gold saying that it comes from a place with no extraction license or from places with no gold mines.
- Large amount of funds transferred internationally and then withdrawn very quickly.
- International transfers to countries where the company is not registered.
- Significant cash withdrawals from bank accounts by participants within the gold trading industry.
- Division of funds in cheques and smaller cash transactions to pay for merchandise.
- Purchase of gold bullion with bank cheques may be an attempt to conceal the source of the funds and underlying ownership.
- The use of cash to purchase bullion, especially when there are multiple purchases in a short timeframe, or when large amounts are purchased at once, or when there are structured cash deposits into an account to finance a single gold bullion purchase.
- Original source of funds to buy gold bullion cannot be established. The transaction involves the receipt of cash (or by other payment methods, including cheques or credit cards) from third party entities that have no apparent connection with the transaction or front or shell companies or wire instructions / payment from parties which were not identified in the original letter of credit or other documentation. The transactions that involve payments for goods through cheques, bank drafts, or money orders not drawn on the account of the entity that purchased the items also need further verification.
- Transactions between domestic buyers and sellers with sales proceeds sent to unknown third parties overseas.
PREDICATE CRIME ACTIVITY
GOLD MINING BEHAVIOUR
- Production and commercialisation of gold by a person or business without a license.
- An ethnic community hires a third party for the entire operation of the mine.
- Licensed mines where the production has decreased with no apparent
explanation. - The development of mining activities using machinery and equipment that
is not in accordance with the characteristics of the licensed small or
artisanal mining. - The development of mining activities without compliance with the
administrative, technical, social and environmental regulation. - The development of mining activities in prohibited areas.
German GwG
The German GwG defines „valuables“ in Section 1 (10) as goods that stand out from everyday use items due to their quality, market value, or intended use, or because of their high price, making them non-everyday purchases.
Valuables include:
- Precious metals like gold, silver, and platinum.
- Precious stones.
- Jewelry, watches, and clocks.
- Works of art and antiques.
- Motor vehicles, ships, motorboats, and aircraft.
Obliged entities, as per Section 2 (1) No. 16 of the German GwG, are institutions and individuals involved in specific business or professional activities. This includes traders in goods, intermediaries in the trade of works of art, and persons storing works of art, especially in free ports.
Section 4 (5) requires that obliged entities falling under Section 2 (1) No. 16 have effective risk management systems in place. These systems must cover various scenarios, including transactions related to works of art worth €10,000 or more, transactions involving valuables as defined in Section 1 (10) Sentence 2 No. 1 with cash payments of €2,000 or more (either made or received), and transactions involving other goods with cash payments of €10,000 or more, either made or received. The same risk management requirement applies to intermediaries in the trade of works of art and persons storing works of art in transactions of €10,000 or more.
Section 7 (3) empowers supervisory authorities to order obliged entities under various sections, including Section 2 (1) No. 16, to appoint a Anti-Money Laundering Officer (AML Officer) if deemed necessary. In the case of Section 2 (1) No. 16, the order should be issued primarily if the main activity of the obliged entity consists of trading in valuables.
Joint Interpretation and Application Guidelines of the Federal States of the Federal Republic of Germany
In the „Joint Interpretation and Application Guidelines of the Federal States of the Federal Republic of Germany,“ specific rules and threshold values apply to traders in goods, art intermediaries, art storers, and real estate agents. These rules are related to their obligations regarding anti-money laundering and counter-terrorism financing measures.
Threshold Values for Traders in Precious Metals and Other Goods
- Risk Management System and Due Diligence Obligations: These entities are required to establish a risk management system and fulfill general due diligence obligations not tied to any suspicion when specific threshold values are reached or exceeded.
- Smurfing: It’s emphasized that threshold values can also be met through multiple smaller payments if there is suspicion of an artificial splitting of the total amount aimed at evading anti-money laundering regulations (known as „Smurfing“).
- Cash Payments: The provisions regarding threshold values apply to both the acceptance and disbursement of cash, meaning they are applicable to both buying and selling transactions.
- Cash Deposits: Deposits made by customers into the entities‘ accounts are considered as the acceptance of cash.
- Definition of „Cash“: „Cash“ encompasses payments made in domestic or foreign banknotes and coins. Foreign banknotes and coins should be converted into Euros at the European Central Bank’s exchange rate on the day of acceptance or disbursement to determine if the relevant threshold value is reached.
- Acceptance of Goods: The acceptance of goods as part of a trade does not constitute the acceptance of cash.
Trade in Precious Metals
- Threshold Value: For the trade in precious metals like gold, silver, and platinum, a threshold value of 2,000 Euros in cash applies. This threshold doesn’t apply to gemstones, jewelry, and watches since they are not classified as precious metals. It also doesn’t apply to the trade in artworks and antiques.
- Interpretation: The interpretation of products made of precious metals depends on various factors, including whether the value is primarily based on the weight of the metal or if other factors like rarity, age, or production costs contribute significantly. The lower threshold value applies to transactions primarily based on weight or intended for investment purposes.
Trade in Other Goods
- Threshold Value: For the trade in all other goods, a threshold value of 10,000 Euros in cash applies.
Sources:
- FATF „Guidance on the Risk-Based Approach for Dealers in Precious Metals and Stones“ https://www.fatf-gafi.org/en/publications/Fatfrecommendations/Fatfguidanceontherisk-basedapproachfordealersinpreciousmetalsandstones.html
- FATF Report „Money laundering and terrorist financing through trade in diamonds“ https://www.fatf-gafi.org/en/publications/Methodsandtrends/Ml-tf-through-trade-in-diamonds.html
- FATF „Money laundering and terrorist financing risks and vulnerabilities associated with gold“ https://www.fatf-gafi.org/content/fatf-gafi/en/publications/Methodsandtrends/Ml-tf-risks-and-vulnerabilities-gold.html
- German Anti-Money Laundering Act (Geldwäschegesetz – GwG) https://www.bafin.de/SharedDocs/Downloads/EN/Aufsichtsrecht/dl_gwg_en.html
- Common interpretation and application instructions from the states of the Federal Republic of Germany https://rp-darmstadt.hessen.de/sicherheit-und-kommunales/gefahrenabwehr/geldwaesche