AML Policies and Procedures
FinCEN - Financial Crimes Enforcement Network
Under an interim final rule by the Financial Crimes Enforcement Network (FinCEN), dealers in precious metals, stones or jewels are required to establish anti-money laundering programs. At a minimum, dealers must establish an anti-money laundering program that comprises the following four elements:
--Policies, procedures and internal controls, based on the dealer’s assessment of the money laundering and terrorist financing risk associated with its business;
--A compliance officer who is responsible for ensuring that the program is implemented effectively;
--Ongoing training of appropriate persons concerning their responsibilities under the program;
--and Independent testing to monitor and maintain an adequate program.
FinCEN is issuing this regulation to better protect those that deal in jewels, precious metals and precious stones from potential abuse by criminals and terrorists. “The characteristics of jewels, precious metals and precious stones that make them valuable also make them potentially vulnerable to those seeking to launder money,” said William J. Fox, Director of FinCEN. “This regulation is a key step in ensuring that the Bank Secrecy Act is applied appropriately to these businesses.”
The interim final rule applies to “dealers” that have purchased and sold at least $50,000 worth of “covered goods” during the preceding year. The dollar threshold is intended to ensure that the rule only applies to persons engaged in the business of buying and selling a significant amount of these items, rather than small businesses, occasional dealers and persons dealing in such items for hobby purposes.
“Covered goods” include jewels, precious metals, and precious stones, and finished goods (including but not limited to, jewelry, numismatic items, and antiques) that derive 50 percent or more of their value from jewels, precious metals or precious stones contained in or attached to such finished goods. The interim final rule is final and binding.
Texas Precious Metals uses all of its commercially reasonable efforts to comply with FinCEN regulations. As a dealer in precious metals, Texas Precious Metals uses its commercially reasonable efforts to only source its customers' precious metals from companies that comply with FinCEN regulations. Additionally, Texas Precious Metals has an express policy against aiding and abetting in the act of money laundering or facilitating any illegal acts governed by the USA Patriot Act or otherwise. By agreeing to Texas Precious Metals' terms and conditions and consummating a transaction with Texas Precious Metals, each customer represents and warrants to Texas Precious Metals that (i) the customer is in compliance with the USA Patriot Act, (ii) none of the funds being used to consummate the transaction were derived from or related or connected to money-laundering, terrorism or any other illegal or illicit activity and (iii) the transaction is not a scheme, or part of a scheme, involving or in support of terrorism, money-laundering or any other illegal or illicit activity. Texas Precious Metals, at all times, reserves the right to require the customer to provide supporting information and documentation in support of the preceding representations and warranties or to ensure compliance with FinCEN regulations.
Texas Precious Metals 1) maintains an active Anti-money Laundering Program 2) has a compliance officer, elected yearly, who actively monitors sales activity, trains staff, and monitors changes to regulations 3) conducts a period 3rd party audit on its AML program.
Cash Transactions, Reporting to IRS
Texas Precious Metals restricts client payment options to the following:
--Bank wires are accepted as payment for all orders.
--Personal checks and "electronic bill pay" checks are accepted for all orders less than $25,000.
--Cash is acceptable for orders placed in person, provided (i) the order is less than $10,000, and (ii) the client does not exceed $10,000 in cash payments per calendar year, per household.
Effective August 5th, 2013, we no longer accept payment by bank check, cashier's check, or money order. We handle precious metals trades as two separate transactions. Both the "buy side" and the "sell side" of the transaction are subject to applicable restrictions.
1099B reporting to IRS
Clients that are selling precious metals back to the company should be aware of IRS reporting requirements for certain products. Sell side reporting requirements are available here (link).