Dealers in Precious Metals and Stones (DPMS)

Gold bars, diamonds and gems carry great value in a small space, keep value across borders, and can be converted back into cash without much paperwork. Parts of the trade rely on cash, informal sourcing and long supply chains, which make the true origin of goods hard to confirm. Criminals use the trade to turn cash into portable assets, to move value in trade-based schemes, and to disguise the proceeds of illegal mining and smuggling. International standards treat dealers as one category of designated non-financial business, meaning a non-bank sector covered by anti-money laundering rules. They are expected to apply customer due diligence and report suspicious activity, at least when they deal in cash above a set threshold, which varies by country. Compliance teams at jewellers, refiners, bullion traders and the banks that serve them look at customer identity, the origin of goods and the fit between transaction size and business profile. Supervisors test whether a dealer will refuse a cash sale it cannot explain; a lax one lets launderers swap dirty cash for gold without touching a bank.

A jewellery store owner offers to buy 500 grams of gold bars and asks to pay half in cash and half through three relatives' bank transfers. He does not want the sale recorded under his name and has no clear reason for the purchase. The dealer's compliance officer refuses the sale and files a suspicious transaction report.