Comprehensive Elements of an Effective AML/CFT Framework for Precious Metals and Precious Stones Dealers

Abstract

This comprehensive analysis examines the essential elements required for effective Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) frameworks specifically designed for dealers in precious metals and stones. The study addresses the unique regulatory challenges posed by high-value, portable commodities that are frequently exploited for illicit financial activities including money laundering, terrorist financing, corruption, smuggling, and arms trafficking,The research establishes the critical foundation provided by Financial Action Task Force (FATF) international standards, particularly Recommendations 22, 23, and 28, which mandate customer due diligence, suspicious transaction reporting, and effective supervisory oversight for dealers operating above specified transaction thresholds (USD/EUR 15,000). The analysis explores the implementation of risk-based approaches that require sophisticated assessment of customer profiles, transaction patterns, geographical risks, and business relationships to identify and mitigate potential financial crime threats.