C-FINTRAC Precious Metal Dealer

On Jul. 24, C-FINTRAC issued risks for precious metal dealers.

  • 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

  • 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.