The Financial Transactions and Reports Analysis Centre of Canada (Fintrac) has issued an operational brief providing information and guidance about the factors that expose dealers in precious metals and stones to money laundering and terrorist financing risks.
The brief applies to individuals and entities, including retailers, wholesalers and suppliers and includes indicators to help dealers determine when they should report a suspicious transaction to Fintrac.
Unique risk profile
Fintrac says that dealers in precious metals and stones have a unique risk profile with regard money laundering and terrorist financing because they trade in easily transferable items of value that can easily be converted to cash.
This risk is heightened because these items can be used for several illicit purposes. Precious metals and stones could themselves be the proceeds of crime, or they could be purchased with the proceeds of crime or even used to launder the proceeds of crime.
When dealers in precious metals and stones enter into a deal, either as buyer or seller, of C$10,000 (US413,327) or more, they become what are known as “designated reporting entities” and must report such transactions to Fintrac.
Dealers must also have policies and procedures in place to determine when transactions pose a high-risk for money laundering or terrorist financing.
Compliance and risk assessment
According to Fintrac, this can accomplished by creating an effective compliance programme and a documented risk assessment approach, including mitigation measures and strategies.
To ensure dealers are meeting their requirements, Fintrac conducts on-site and office examinations to evaluate traders’ compliance and risk assessment activities against the requirements set out in operational briefs and other sources of information.
Categories: Trade Based Financial crimes News