Why Jewelers Must Act Now: Avoiding FINTRAC Fines Through Strong AML Compliance
A Wake-Up Call for Jewelers: Regulatory Risk Is Real
In December 2025, a Canadian full-service jeweler with multiple locations was hit with an administrative monetary penalty of $77,137.50, not for fraud, but for failing to meet the basic compliance expectations under Canada’s anti-money-laundering regime. The cause: missing or inadequate compliance documentation, lack of risk assessment, and no periodic review of their AML program.
For businesses operating as dealers in precious metals stones, where high-value transactions, cash payments and third-party buys are common, this serves as a stark reminder: if you don’t build and maintain an AML program, regulators will act.
What Went Wrong: The Key Violations & What They Mean for You
The FINTRAC examination revealed three core compliance failures. Each area is one that many jewelers overlook, but together they lead directly to administrative monetary penalties.
1. No Written, Up-to-Date Policies and Procedures
The retailer lacked a documented AML manual tailored to its business. Their compliance documentation did not cover fundamental obligations: client identification, record-keeping, reporting triggers. In short: there was no compliance backbone.
For a dealer, that means no clear policy on verifying ID for cash purchases, no procedure for tracking beneficial owners when selling to corporations or third parties, and no defined process for large cash or suspicious transactions, a critical oversight under the law.
2. No Risk Assessment Specific to Dealers in Precious Metals and Stones
Regulations require businesses to assess their risk of money laundering or terrorist-financing based on factors such as: products/services offered, delivery channels, geographic exposure, and the nature of clients or business relationships.
This retailer failed to assess how the jewellery business’s high value, cash-intensive sales, potential third-party transactions, or inter-location transfers could contribute to risk. Without that assessment, you can’t build controls that actually match the risks inherent to your business.
3. No Periodic Review / Effectiveness Testing of the AML Program
An AML program is not “set and forget.” The law requires that an entity periodically (required every two years) reviews its compliance program, including policies, risk assessment, training and controls, to test its effectiveness and document the results.
The fined retailer had never done this. Which means that outdated or ineffective processes went unchecked, creating a compliance blind spot over time.
Why Dealers in Precious Metals and Stones Are Especially Vulnerable
High-value items + cash sales — makes the business an attractive target for laundering illicit proceeds marked as “purchases.”
Third-party or corporate buyers — cash or other payments from corporations or intermediaries can obscure beneficial ownership.
Multiple locations / franchise-style operations — increases complexity of oversight and compliance consistency across outlets.
Resale, buy-back or trade-in programs — complicates provenance tracking and client history.
Without robust, documented policies and ongoing oversight, even a legitimate business can trigger red flags.
What Dealers in Precious Metals and Stones Should Do To Build a Compliant & Resilient AML Program
Here are essential steps to bring your business into compliance, and stay there:
Create and maintain a written AML compliance manual: tailored to your industry and business model. Include procedures for client ID, cash and large-value sales, record-keeping, and reporting triggers.
Conduct a risk assessment specific to dealers in precious metals and stones operations: map out where risk comes from: cash transactions, third-party payments, inter-store transfers, corporate buyers, geographic exposure, resale/buy-back cycles.
Institute a compliance governance structure: appoint a compliance officer or MLRO, define oversight, sign-off authority, and senior-management approval of compliance policies.
Document and enforce controls consistently across all locations: ensure every store follows the same onboarding, sale, recordkeeping, and reporting procedures.
Set up periodic reviews and testing of the AML program: at least every two years, or sooner if business model changes. Reviews should validate controls, staff compliance, training effectiveness, and record completeness.
Train staff and agents on red flags and compliance obligations: cash sales, unusual transactions, third-party payments, large purchases, repeat customers, and high-value buy-back/resale deals.
Keep thorough records and logs, in a secure and organized system: client IDs, sales records, payment methods, beneficial owner info if corporate, transaction history, and any internal compliance communications or decisions.
How We Help Dealers in Precious Metals and Stones Stay Compliant
At Platino Consulting, we specialize in AML compliance for jewelers, bullion and dealers in precious metals & stones, and high-value retailers. Our services include:
Custom policy & procedure development — we draft an AML manual tailored to your operations, including retail sales, cash trades, buy-backs and corporate buyers.
Industry-specific risk assessment — we map risk factors unique to precious-metals sales and advise on appropriate controls.
Compliance governance & oversight framework — we help you appoint a compliance officer, set approval processes, and define roles & responsibilities.
Training & awareness program — retail staff and management get actionable training on AML obligations, red flags and reporting procedures.
Periodic compliance reviews & audits — to meet regulatory review obligations and ensure program effectiveness over time.
Record-keeping & documentation support — implement organized, secure systems for client data, transaction logs, and audit trails.
Ongoing advisory & regulatory support — if FINTRAC examines, we help you respond confidently and defend your compliance program.
With our help, you won’t just meet the minimum standard, you’ll build a defensible, professional compliance program that protects your business and gives you peace of mind.
Compliance is Business Protection, Not a Burden
The recent fine shows that even established multi-location jewelers can run afoul of AML obligations when compliance is treated as a secondary task. For dealers in precious metals and stones, who operate at high value and often deal in cash, the cost of non-compliance can be steep: not just penalties, but reputational harm, disrupted operations, and loss of trust.
By proactively building a robust, well-documented AML program, tailored to your business’s risks, you avoid regulatory risk and strengthen your business reputation.
If you’re ready to protect your jewellery business, safeguard your customers, and build compliance the right way, contact us for a confidential consultation. We’ll help you assess your current exposures, build or fix your AML program, and prepare you for regulatory confidence.
