Hundreds of jewellers are not ready for a wave of regulation targeting them to prevent money laundering, child exploitation, trafficking, scams, fraud and terrorism.
This is all according to law firm Bartier Perry, with partner Rebecca Hegarty saying many of the estimated 2,500 plus Australian businesses that deal in precious stones and metal are still in denial about the huge impact that the amended Anti-Money Laundering and Counter Terrorism Financing Act 2006 (AML/CTF Act) will have on their business.
“These laws have been in place since 2006 for a range of financial institutions, bullion dealers, insurance companies, superannuation funds, money remitters and gambling service providers who would be well versed in the severe financial and reputational risks of not adhering to them,” Hegarty said.
The new changes are set to come into effect from July 1, 2026.
On its website, the Department of Home Affairs confirms three key objectives for the new legislation. As well as expanding the reach to additional high-risk services, the other two aims are to modernise the regulation of digital currency and of virtual asset and payments technology, as well as simplifying and clarifying the AML/CTF regime to increase flexibility, reduce regulatory impacts and support businesses to better prevent and detect financial crime.
The Australian Institute of Criminology (AIC) estimates that serious and organised crime cost the Australian community up to $60.1 billion in 2020 and 2021, with illicit financing at the centre of most crime types. “It directly impacts the safety and wellbeing of Australian communities, and exploits and distorts legitimate markets and economic activity,” the Home Affairs website added.
Once the new rules commence in July next year, the scope will move from covering an estimated 17,000 entities or Australian businesses to more than 90,000.
“Yes, there will be some leeway for these businesses to get things right under the legislation but that will not last forever and as we’ve seen with the multimillions in fines handed out to banks and casinos in recent years, the cost of getting it wrong is very high,” Hegarty said.
“We expect money launderers will be actively seeking out smaller jewellery businesses in the possibly justified hope they won’t have the knowledge of the laws or the systems in place to question transactions.
Bartier Perry chief transformation officer Roger Habib added that the new laws will require significant cultural and operational change across firms, for employees to detect, deter and disrupt money laundering and terrorism financing activities.
“This is not a ‘tick the box’ exercise,” Habib said. “It’s important that lawyers, accountants, precious metal merchants and real estate professionals don’t view these laws as a burden.”
By July 1, 2026 firms will need to have in place their AML/CTF Compliance Officer, Policy, Program and Procedures. They should also have provided training to all staff on the obligations and how to identify and report suspicious activity.
There are also stringent record-keeping requirements for seven years from July 1 next year.