When Precious Metals Penalties Hit — What Dealers of Precious Metals & Stones Need to Do Now for AML Compliance
A leading dealer in precious metals and stones has just been fined $264,000.00 CAD by FINTRAC for a large range of AML compliance failures: not submitting suspicious transaction reports despite apparent indicators; lacking written, senior-approved policies and procedures; failing to document risk assessments; missing required ongoing staff and agent training; and omitting scheduled reviews of the compliance framework. This case emphasizes that compliance isn’t optional, dealers of precious metals and stones are under increasing scrutiny, and gaps can lead to very steep penalties.
Key Obligations Under FINTRAC for Jewelry & Precious Metals Dealers
If your business buys or sells precious metals & stones, you are likely subject to the Dealers in Precious Metals and Precious Stones (DPMS) obligations under the PCMLTFA. You are required to maintain a full compliance program: this includes client identity verification, beneficial ownership verification if dealing with entities, ongoing monitoring, risk assessments, and reporting suspicious or large transactions. Recordkeeping must be thorough, policies and procedures must be written and approved at the senior level, and staff (including agents and mandataries) must receive regular training.
Common Pitfalls Dealers of Precious Metals & Stones Encounter
In examining FINTRAC’s findings and guidance, certain weaknesses tend to repeat:
Lack of documented risk assessments: not properly identifying high risk clients, transactions, or channels (e.g. remote sales, high-cash, third parties).
Insufficient policies & procedures: outdated or generic policies, missing key elements like beneficial ownership, PEP / HIO screening, or ministerial directives.
Weak or irregular training: staff unaware of red flags, or training not documented; agents or employees acting without clear guidance.
Missing reviews or audits of compliance-program effectiveness: failure to test or update policies in light of changing risks.
How Platino Consulting Can Protect Your Business
You don’t have to wait until a FINTRAC examination or fine to take action. Businesses that work with Platino Consulting get ahead in several ways:
Tailored gap-assessments that map your current state vs what FINTRAC expects, including hidden risks unique to the precious metals trade.
Develop customized compliance policies & procedures that cover all required elements: KYC, beneficial ownership, PEP/HIO screening, reporting obligations, and record keeping.
Build training programs for your staff and agents, ensuring everyone knows red flags, when to escalate, how to report, and how to document.
Assist in setting up monitoring systems (transaction thresholds, ongoing client reviews) and regularly review your program (internal audits or independent effectiveness reviews) to ensure it keeps pace with law, regulation, and enforcement trends.
For dealers of precious metals and stones, that level of depth is no longer a luxury, it’s essential to avoid the kinds of AMPs and reputational damage that we’re seeing more often.
If your business wants to ensure your AML compliance is defensible, ready for inspection, and built to limit risk exposure, especially in the high-value precious metals and jewelry space, reach out to Platino Consulting for a consultation. Our team of AML experts can help you close gaps, train your team, and build a compliance program that passes scrutiny.
