AML Compliance Guide
Log in Create Free Account

Customer due diligence for Precious metals & stones dealers — 2026 AUSTRAC Guide

From 1 July 2026, if your jewellery, precious metals, stones or high-value product business provides a designated service, you must verify the identity of each customer before you provide that service. This applies because dealers in precious stones and metals are a known money laundering risk in Australia: high-value items are easy to move, easy to resell and often targeted by criminals using cash or layered ownership structures. If you skip customer due diligence, or do it badly, you risk AUSTRAC enforcement, civil penalties of up to $33.5 million per contravention, and criminal penalties for intentional breaches.

Your AML/CTF obligations

  1. 1. AUSTRAC enrolment
  2. 2. Compliance officer
  3. 3. ML/TF risk assessment
  4. 4. AML/CTF program
  5. 5. Customer due diligence
  6. 6. Sanctions screening
  7. 7. Suspicious matter reporting
  8. 8. Record keeping (7 years)
  9. 9. Staff training

Customer due diligence means you do more than take a name at the counter. Before providing a designated service, you must identify the customer and verify that identity using reliable information. For an individual, that means name, date of birth and residential address checked against government-issued ID. For a company, it means verifying the company name, ACN or ABN and company type through ASIC, and then identifying any beneficial owners. For a trust, you need the trustee details, the trust deed and the beneficial owners. A beneficial owner is the natural person who owns 25% or more, or who exercises effective control.

How a dealer should handle CDD in practice

  • First, confirm that the sale or arrangement you are about to provide is a designated service. Not every transaction in your business will be caught.
  • Before completing the transaction, collect the customer's full identity details and sight the right documents. For individuals, use government-issued ID; for companies, check ASIC; for trusts, obtain the trust deed and trustee details.
  • Work out who really owns or controls the customer. If a company, family trust or another person is buying the item, do not stop at the name on the invoice.
  • Check whether the customer is a politically exposed person or otherwise high risk, and apply enhanced due diligence if needed.
  • Screen the customer against the DFAT autonomous sanctions list and the UN Security Council consolidated list before you proceed.
  • Keep records of the documents, checks and decisions for 7 years after the relationship ends.

Do the ID check before the deal goes through

You must verify identity before providing the designated service. For a dealer, that means before handing over high-value precious goods, accepting funds under the designated service arrangement, or otherwise completing the regulated transaction. If the buyer will not provide the information you need, do not proceed.

Common mistakes in this sector are very practical. Staff may assume a regular customer does not need to be checked, rely on a business card instead of proper verification, or treat the person standing in the showroom as the real customer when the purchase is actually for a company, trust or overseas principal. Another frequent error is focusing only on cash. Cash matters for threshold transaction reports, but customer due diligence is broader and applies before you provide the designated service, regardless of whether payment is in cash or another form. Dealers also get caught by unusual urgency, requests to split ownership, third-party payments, or a customer who is indifferent to price but highly interested in resale, portability or anonymity.

Practical tips for jewellery and precious goods businesses

  • Build a simple front-of-house checklist for sales staff so they know when to pause a transaction and collect ID.
  • For corporate buyers, keep a standard pack: ASIC extract, director details and beneficial owner declaration.
  • For trusts and SMSFs, ask early for the trust deed and trustee information so the deal does not stall at settlement.
  • Train staff to spot red flags specific to this trade, such as requests for easy-to-conceal items, rapid repeat purchases, resale questions, or attempts to use nominees.
  • If a transaction feels wrong, escalate it internally straight away so you can decide whether an SMR is required without tipping off the customer.

A lightweight AML platform, built exclusively for Tranche 2

Get AUSTRAC's mandates done as fast and effortless as possible.

  • Built around AUSTRAC's actual requirements
  • Single maintained compliance file
  • No compliance expertise required
  • 25 minute initial compliance setup
  • Obligations calendar & reminders
  • Instant data export
Setup: ~25 minutes Ongoing: minutes per client Price: $8 per KYC
See the product →

Frequently asked questions

Do I need to verify every walk-in retail customer who buys jewellery?
No. The trigger is whether you are providing a designated service, not simply making any retail sale. Check AUSTRAC's guidance for dealers in precious metals, stones and products and use its regulation checker, because not every sale in a jewellery business will be regulated.
What if the customer is buying through a company or family trust?
You must verify the entity as well as the natural people behind it. For a company, verify the company details through ASIC and identify beneficial owners. For a trust, obtain trustee details, review the trust deed and identify the beneficial owners or controllers.
Can I complete the sale first and collect the ID later if the customer is in a hurry?
No. Identity must be verified before you provide the designated service. If the customer will not wait or refuses to provide documents, you should not proceed with the regulated transaction.
What counts as extra checks for a high-risk customer or a PEP?
Enhanced due diligence means applying higher scrutiny than your standard process. In practice, that can include getting more information about the source of funds, the purpose of the purchase, who is behind the entity, and whether there are links to high-risk countries, unusual transaction patterns or sanctions exposure.
Will customer due diligence be expensive for a small jeweller or dealer?
It does not need to be. Many small dealers can build a workable process using staff training, standard checklists, government-issued ID checks, ASIC searches for company customers and clear record keeping. The cost of getting the process in place is usually far lower than the risk of non-compliance or being used in a criminal transaction.

Related guides