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Suspicious matter reporting for Precious metals & stones dealers — 2026 AUSTRAC Guide

If you deal in precious metals, precious stones or precious products and provide a designated service from 1 July 2026, you must report suspicious matters to AUSTRAC. This matters particularly in your sector because jewellery, watches, stones and precious metal items are attractive to criminals: they are high value, portable, easy to resell, easy to conceal and can be under- or over-valued. If you fail to report when you have reasonable grounds to suspect suspicious activity, AUSTRAC can take enforcement action, civil penalties can reach $33.5 million per contravention, and intentional breaches can lead to criminal penalties.

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

A suspicious matter report, or SMR, is required when you form a suspicion on reasonable grounds that a customer, transaction, attempted transaction, or inquiry may be linked to money laundering, terrorism financing, other crime, or attempts to avoid AML/CTF controls. The threshold is not proof and not certainty. In a precious metals and stones business, suspicion often arises from the way a customer behaves, how they want to pay, what they want to buy or sell, and whether the value, source or ownership of the goods makes sense.

What to do in practice

  • Train sales staff, buying staff and managers to recognise red flags in retail, wholesale and second-hand transactions, not just completed sales.
  • Stop and escalate unusual activity internally as soon as it appears, especially large cash proposals, requests for anonymity, third-party payments, rushed repeat purchases, or unexplained buying and selling patterns.
  • Gather the facts you already hold: customer identity records, item descriptions, invoices, payment method, conversations, CCTV references, delivery details and any linked entities or beneficial owners.
  • Decide quickly whether you have reasonable grounds to suspect. If yes, lodge the SMR with AUSTRAC within 3 business days, or within 24 hours if terrorism financing is suspected.
  • Keep the report confidential. Do not tell the customer you lodged an SMR or that you are considering one.

Deadline and tipping-off warning

You have 3 business days from forming the suspicion to file an SMR with AUSTRAC. If the suspicion relates to terrorism financing, the deadline is 24 hours. Telling the customer you made, or may make, an SMR is tipping off and is a separate criminal offence.

For your sector, common red flags include a customer trying to buy high-value jewellery or watches with physical cash, virtual assets or layered third-party payments; a person accepting a substantial loss to resell an item quickly; reluctance to provide identification; use of companies or trusts where beneficial ownership is hard to pin down; pressure to avoid invoices or split transactions; and overseas connections that do not fit the customer story. AUSTRAC has identified dealers in precious stones and metals as among the most at risk of being used for money laundering in Australia, particularly because these goods can be readily bought and sold, moved offshore, melted down, remodelled or deliberately mispriced.

Common mistakes for precious metals and stones dealers

  • Waiting for proof of criminal conduct before reporting. The test is reasonable grounds to suspect, which is lower than belief.
  • Assuming only completed sales are reportable. Attempted purchases, suspicious sell-backs and abandoned deals can still trigger an SMR.
  • Confusing SMRs with threshold transaction reports. An SMR can apply to any suspicious activity; a TTR is only for physical cash of $10,000 AUD or more.
  • Thinking luxury watches, jewellery and finished pieces are low risk because they are normal retail products. They are specifically attractive for storing and moving value.
  • Failing to document why staff became suspicious and when that suspicion was formed, which makes deadline tracking much harder.

The most practical approach is to build SMR triggers into your day-to-day sales and buying process. Give staff a short escalation form, require manager sign-off on unusual high-value deals, record serial numbers and product details carefully, and keep notes where pricing, ownership history or source of funds do not add up. Good-faith reports to AUSTRAC are legally protected, so your focus should be on prompt reporting and clean internal records rather than trying to investigate the customer yourself.

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Frequently asked questions

Do I need to file an SMR if the customer never actually buys anything?
Yes, potentially. An attempted transaction, abandoned purchase or suspicious inquiry can still require an SMR if you form reasonable grounds to suspect criminal activity or an attempt to avoid AML/CTF controls. In your sector, that can include a customer who asks how to pay anonymously, wants to split payments, or walks away when asked for identification.
If a customer pays $10,000 or more in cash, do I file a TTR, an SMR, or both?
They are different reports and sometimes both are required. A TTR is required for physical currency of $10,000 AUD or more in a single transaction and must be filed within 10 business days. If the same transaction is also suspicious, such as obvious structuring or inconsistent explanations about the funds, you may also need to file an SMR within 3 business days.
What if I only suspect the goods are being under-valued or over-valued?
That can still support an SMR. In precious metals, stones and jewellery, deliberate mispricing is a recognised money laundering risk because it can disguise value transfer or justify unexplained funds. If the pricing, resale pattern, or customer explanation does not make commercial sense, assess whether that gives you reasonable grounds to suspect.
Does it cost anything to lodge an SMR with AUSTRAC?
No. Lodging reports with AUSTRAC is part of your legal obligations as a reporting entity and there is no filing fee for the SMR itself. Your real cost is staff time, training and having a process that lets you identify and escalate suspicious activity quickly.
What should I do if the suspicious customer is a regular trade buyer or another jeweller?
Treat them the same way you would any other customer. Regular status, industry connections or a long relationship do not remove your reporting obligation if the activity is suspicious. In fact, AUSTRAC identifies jewellers and legal entities with unclear beneficial ownership as higher-risk customer types in this sector, so repeated dealings can increase the importance of good records and timely reporting.

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