C-FINTRAC Precious Metal Dealer

• Operational brief on risks, indicators for dealer in precious metals and stones (DPMS).

Content

• 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.