Dealers in precious metals and stones

Your Obligations

The following summary of the legislative requirements under the PCMLTFA applies to you if you are a dealer in precious metals and stones.

A dealer in precious metals and stones means an individual or an entity that buys or sells precious metals, precious stones or jewellery, in the course of its business activities. You are subject to the requirements listed below if you ever engage in the purchase or sale of precious metals, precious stones or jewellery in an amount of $10,000 or more in a single transaction. In other words, you are not subject to these requirements if you engage only in purchases or sales of less than $10,000 per transaction.

The purchases or sales referred to above exclude those carried out for, connected with, or for the purpose of:

• manufacturing jewellery;
• extracting precious metals or precious stones from a mine; or
• cutting or polishing precious stones.

In other words, if all of your purchases and sales are related to these manufacturing, extracting, cutting or polishing activities, you are not subject to these requirements.

If you are an agent of the Crown (i.e. a government department or an agent of her Majesty in right of Canada or of a province), you are also considered a dealer in precious metals and stones and subject to the requirements listed below if you ever sell precious metals to the public in an amount of $10,000 or more in a single transaction.

Precious metals include gold, silver, palladium or platinum whether in coins, bars, ingots, granules or in any other similar form. Precious stones include diamonds, sapphires, emeralds, tanzanite, rubies or alexandrite. Jewellery means objects made of precious metals, precious stones or pearls intended for personal adornment.

If you are an employee of a reporting entity, these requirements are the responsibility of your employer except with respect to reporting suspicious transactions and terrorist property, which is applicable to both.

• Reporting
  • Suspicious Transactions
  • Terrorist Property
  • Large Cash Transactions
• Record Keeping
• Ascertaining Identity
• Use of personal information
• Third Party Determination
• Compliance Regime

Printable summary for dealers in precious metals and stones (PDF version, 49 kb)

Additional Information for Dealers in Precious Metals and Stones

• Penalties for Non-compliance
• FINTRAC Interpretation Notices
• Compliance Assessment Report

Reporting

• Suspicious transactions
  You must report where there are reasonable grounds to suspect that a transaction or an attempted transaction is related to the commission or attempted commission of a money laundering offence or a terrorist activity financing offence.
  
  See Guideline 2: Suspicious Transactions and Guideline 3: Submitting Suspicious Transaction Reports to FINTRAC
  
  
• Terrorist property
  You must report where you know that there is property in your possession or control that is owned or controlled by or on behalf of a terrorist or a terrorist group.
  
  See Guideline 5: Submitting Terrorist Property Reports to FINTRAC
  
  
• Large cash transactions
  You must report large cash transactions involving amounts of $10,000 or more received in cash.
  
  See Guideline 7: Submitting Large Cash Transaction Reports to FINTRAC
  
  

Record Keeping

You must keep the following records:

• Large cash transaction records
• Copies of suspicious transaction reports

See Guideline 6I: Record Keeping and Client Identification for Dealers in Precious Metals and Stones

Ascertaining Identity

You must take specific measures to identify the following individuals or entities:

• Any individual who conducts a large cash transaction
• Any individual for whom you have to send a suspicious transaction report (reasonable measures and exceptions apply)

See Guideline 6I: Record Keeping and Client Identification for Dealers in Precious Metals and Stones

Use of personal information

The use of personal information in Canadian commercial activities is protected by the Personal Information Protection and Electronic Documents Act (PIPEDA), or by substantially similar provincial legislation. You have to inform individuals concerning the collection of personal information about them. However, you do not have to inform individuals when you include personal information about them in any of the reports that you are required to make to FINTRAC. You can get more information about your responsibilities in this area from the following:

• Industry Canada (Privacy For Business); or
• The Office of the Privacy Commissioner of Canada (http://www.priv.gc.ca).
  • The Office of the Privacy Commissioner of Canada has on its Web site information about how to comply with PIPEDA and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (http://www.priv.gc.ca/resource/io_pr_8_e.asp) that will help you in understanding your responsibilities under both federal laws.

Third Party Determination

Where a large cash transaction record is required, you must take reasonable measures to determine whether the individual is acting on behalf of a third party.

In cases where a third party is involved, you must obtain specific information about the third party and their relationship with the individual providing the cash.

See Guideline 6I: Record Keeping and Client Identification for Dealers in Precious Metals and Stones

Penalties for Non-compliance

Non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) Terrorist Financing Act may result in criminal or administrative penalties.

FINTRAC Interpretation Notices

FINTRAC issues FINTRAC interpretation notices (FINs) to provide technical interpretations and positions regarding certain provisions contained in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated Regulations.

• The 24-Hour Rule

For more information on your obligations and on FINTRAC, you can also consult our Frequently Asked Questions.

Compliance Assessment Report

Part of FINTRAC's mandate is to ensure compliance by financial intermediaries and other reporting entities with their obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and regulations. To do this, we can inquire into your business and examine records, including those relating to your compliance regime.

The compliance assessment report is one of the ways that FINTRAC can inquire into your business. FINTRAC will advise you in writing when you are required to complete it. If you have received such a request from FINTRAC or would like more information about this report, consult the Guide for Submitting the Compliance Assessment Report. It explains how to complete the compliance assessment report and how to submit it.

If you have received a request from FINTRAC, you need the access code provided in that request to be able to log on to the secure Compliance Assessment Report System ( https://www22.fintrac-canafe.gc.ca/cars-srec/).

For any questions about this, please contact us by e-mail at  CARS-SREC@fintrac-canafe.gc.ca. If you do so, be sure to indicate your company/organization name as well as your reporting entity sector.