Anti-Money Laundering Compliance: What You Need to Know
Thursday, June 6, 2019
By Jewelers Mutual Insurance Group
There are a lot of things you need to focus on when growing sales and keeping your jewelry business successful. However, more money can bring more problems.
Jewelers specifically need to be cognizant of Anti-Money Laundering (AML) laws. Complying with these laws can be challenging, but one thing is for sure: if you don't, you could face serious penalties.
Recently, representatives from the U.S. Department of State communicated that the government is looking to tighten scrutiny of the gem and jewelry industry, requiring businesses to know and declare where every component of their merchandise is sourced. This will affect diamonds, gems, and precious metals.
Government officials recommend suppliers and jewelers ensure they follow existing sourcing requirements such as the Clean Diamond Act, the World Diamond Council’s System of Warranties and the Kimberley Process (KP), and that their Anti-Money Laundering (AML) programs are up-to-date.
These regulations are mandatory. If a jeweler or supplier is not compliant they could face the following:
- A civil penalty which may be a fine up to $250,000 or up to two times the amount of the transaction, not to exceed $1,000,000.
- A criminal penalty which may be a fine up to $500,000 and a maximum of 10 years in prison, or both.
Of course, formal investigations and legal proceedings will be done before any charges are filed, but much like an employment lawsuit, you may find it difficult to keep a positive public image associated with your business during the process.
Even if you unknowingly launder money, you can still be charged for being negligent.
Jewelers Mutual has an online AML Compliance Tool available, enabling dealers to comply with the regulations governing the industry (commonly referred to as Patriot Act Compliance).
This solution can enable you to put your business in full compliance in a few, easy, self-service, online sessions—and maintain your compliant status year after year.