How does Tranche-2 affect Dealers in Precious Metals, Stones, and Product Services?

This infographic explains how Tranche 2 of the AML/CTF reforms applies to businesses dealing in Precious Metals, Stones and Products. It sets out the A$ 10,000 threshold for cash and cryptocurrency transactions, and highlights that Bullion is always regulated, regardless of value or payment method. 

When is Buying or Selling Precious Metals, Stones, or Products Covered under Tranche 2?

Under the Anti-Money Laundering and Countering Terrorism Financing Amendment Act 2024 (hereinafter referred to as the Amendment Act 2024), Designated Services apply when a business is involved in buying or selling Precious Metals and Stones (PMS), or products where A$10,000 or more is exchanged in physical currency, virtual assets, or a combination of both. These Tranche 2 Regulations for DPMS applies to: 

• A single transaction, or 

• Multiple transactions that are linked or appear linked to bypass reporting obligations. 

Exception

If a business never handles cash or crypto payments of A$10,000 or more, such as operating only through card payments, cheques, or electronic transfers, it will not fall under Tranche 2 regulation for DPMS.

What Counts as Precious Metals, Stones, and Products under the New AML/CTF Reforms?

Precious Metals  

The Tranche 2 Regulations for DPMS under Amendment Act 2024 defines Precious Metals broadly to include:

• Gold, silver, platinum 

• Iridium, osmium, palladium, rhodium, ruthenium 

• Any alloy containing at least 2% by weight of the above metals 

These metals attract obligations due to their liquidity, portability, and potential misuse in illicit finance.  

Precious Stones  

Covered stones under the new Tranche 2 Regulations for DPMS are those of recognised gem quality, including:

• Diamonds 

• Opals 

• Pearls 

• Garnets 

Both natural and cultured stones are included, ensuring that Regulated Services capture a wide range of high-value trade.  

Precious Products  

Beyond raw metals and stones, the new AML/CTF rules under AUSTRAC extends to products containing them as well, such as: 

• Jewellery and watches 

• Items of personal adornment 

• Goldsmith or silversmith wares

While Providing the Service of Buying or Selling Precious, Metals, Stones, and Products, who is the Customer?  

The definition of customer may vary depending on the direction of the transaction: 

• In a sale above the A$10,000 threshold, the buyer of the metal, stone, or product is the customer. 

• In a purchase scenario (e.g., a dealer buying gold in cash), the seller is treated as the customer.  

This dual approach ensures coverage for both ends of high-value trades.

Buying or Selling Bullion is a Separate Designated Service 

The buying or selling of Bullion is treated separately and carries unique obligations. Unlike Jewellery or Precious Stones, Bullion transactions are regulated regardless of payment method or transaction size. Even a small Bullion deal, whether paid in cash, card, or virtual assets, is automatically a Designated Service under AUSTRAC.  

Key Takeaways

With the Tranche 2 Regulations for DPMS, AUSTRAC has expanded AML/CTF oversight to include Precious Metals, Stones and Jewellery businesses. Any trade involving A$ 10,000 or more in cash or cryptocurrency now brings compliance responsibilities, ranging from Customer Due Diligence to Transaction Monitoring. Meanwhile, Bullion Trading continues to carry strict obligations regardless of transaction size. 

By understanding these requirements and embedding appropriate AML Software and solutions and compliance practices, businesses can reduce financial crime risks, avoid penalties, and build greater trust with regulators and customers alike.