Gems, metal dealers may have to register to cut money laundering risk
Dealers of precious stones and metals could soon have to register with the authorities in a move to reduce money laundering and terrorism financing risks in the industry.
The new rules proposed by the Ministry of Law yesterday could also require dealers to have measures in place to guard against similar risks posed by customers and transactions.
Dealers already have to abide by a cash transaction reporting regime that mandates customer due diligence for cash deals of $20,000 or more under existing rules.
But the ministry noted in a statement that the precious stones and metals dealership industry is not governed by the same range of anti-money laundering and terrorism financing regulations as the financial sector or designated non-financial operators such as pawnbrokers.
The new regulatory regime "will close this gap", it added.
"Precious stones and metals are portable, valuable and easily convertible to cash," the ministry said. "This exposes the (precious stones and metals dealers) sector to inherent money laundering and terrorism financing risks."
The Ministry of Law, which would become the regulatory agency for the sector, said it will develop the proposed new rules in consultation with industry stakeholders such as associations, manufacturers, wholesalers and retailers.
It will assess the risks the sector faces and adopt "a targeted, risk-based approach to address the risks while keeping regulatory costs reasonable".
A public consultation will be held "in the coming months".
It commissioned a survey of precious stones and metals dealers on the matter from April to June. - THE STRAITS TIMES
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