- Operational brief on risks, indicators for dealer in precious metals and stones (DPMS).
- Operational brief provides information and guidance on factors that expose retailers, wholesalers/suppliers, who are DPMS, to money laundering and terrorist financing.
- Indicators help DPMSs determine when to report suspicious transaction to FINTRAC.
- Chart listing these red flag indicators is provided at the end of the operational brief.
Products, Services, Delivery Channels
- Characteristics that inform ML/TF risk: product size or mass, liquidity of product, market size, product value, product size or mass, and ability to store or transfer.
- The greater the liquidity, market size, value, ability to store/transfer, the greater
- The larger the product size or mass, the harder it is to transport and/or store.
- This translates into lower risk; larger or heavier low quality stones pose less risk.
- When doing business, DPMS must consider these attributes, and delivery channels.
- Transactions not conducted face to face present greater risk, for example, when metals or stones are shipped to post office boxes without names, or international addresses.
Clients and Transactions
- DPMS must consider how their clients present themselves and conduct transactions.
- Dealing in large amounts of cash is riskier, but non-cash activity is not clean per se.
- For example, cash payments against layaway plans may be an attempt to structure transactions in way to avoid $10k reporting requirements; should report as suspicious.
- Bank drafts present more risk than checks because they are not linked to an account.
- When customers use other payment methods, such as wire transfers, credit cards or checks, DPMS should consider if it's in line with what is known about the customer.
- Individuals who arrange for anonymity, such as buying via shell company, are riskier.
- New technologies offer benefits to bad actors through enhanced anonymity, quicker transactions and transactions outside of the financial system covered by AML laws.
- Virtual currencies, email money transfers and payment processors have increased as subjects or features of transactions in suspicious reports received by FINTRAC.