Bullion dealers are businesses that buy or sell bullion and may include precious metal traders, refiners, jewellers, coin dealers and pawn brokers.

Bullion dealers that provide certain designated services have obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) due to the money laundering and terrorism financing (ML/TF) risk that they face. 

These obligations include:

• enrolling with AUSTRAC
• implementing and maintaining an AML/CTF program
• identifying and verifying customers
• reporting certain information to AUSTRAC
• record-keeping.

Designated services for bullion dealers

Buying and selling bullion in the course of carrying on a bullion-dealing business is a designated service.

Buying bullion from a non-retail customer (that is, a bullion wholesaler) is a designated service.

Buying or selling bullion in a private capacity (that is, where you are not buying and selling bullion in the course of carrying on a bullion-dealing business), is not a designated service.

Buying or selling bullion may not necessarily involve the customer taking physical possession of the bullion. This may occur when the bullion dealer holds the bullion in storage for the customer, or when the customer buys into ‘pools’ managed by the bullion dealer.

Definition of bullion

AUSTRAC considers ‘bullion’ to include gold, silver, platinum or palladium authenticated to a specified fineness. Bullion can come in the form of bars, ingots, plates, wafers or other similar mass form, and certain coins.

Bullion coins

Dealing in bullion coins is a designated service.

A bullion coin must have a precious metal purity of at least .9166, and is traded at a value determined by reference to the market value of the constituent precious metal.

AUSTRAC does not consider collector, proof or other coins traded for their numismatic (that is, their inherent value as a collectible coin), commemorative or rarity value to be bullion. Numismatic coins are essentially rare or valuable coins that have an external value above and beyond the base value of the precious metal. There are many factors that can add an external value to a coin and place it in the category of numismatics, but generally they are valued for being rare or collectable. However, if the price of a collector or proof coin is determined by reference to the value of its precious metal content, then it may be a bullion coin.

Metals and metal variants

Dealing in the following metals or metal variants are not designated services because they fall outside the definition of bullion. These include:

• industrial-use metals including platinum group metals (other than platinum and palladium) comprising iridium, rhodium, osmium and ruthenium
• jewellery
• scrap gold
• gold dust
• gold granules.

Identifying your customers

As a bullion dealer, you must identify and know your customers. Your customer identification and verification procedures must be documented in your AML/CTF program.

You are required to identify your customers and verify that their information is correct (known as applicable customer identification procedures) for purchases or sales of bullion when the retail value of the transaction is A$5,000 or more, or the foreign currency equivalent.

Purchases and sales of less than $5,000

You are not required to carry out applicable customer identification procedures for purchases or sales of bullion when the retail value of the transaction is less than A$5,000 or the foreign currency equivalent.

However, if you determine for ongoing customer due diligence purposes that you should obtain, update or verify any customer identification information then you must carry out your customer identification procedures, regardless of the transaction amount.

Indicators of suspicious activity

If you suspect that a customer or transaction is linked to a crime, you are required to submit a suspicious matter report to AUSTRAC.

This list of indicators of suspicious activities will help you identify circumstances that indicate potential ML/TF activity.

Where a suspicion arises (e.g. one of the indicators), you must conduct enhanced customer due diligence and determine whether to submit a suspicious matter report.