“Dealing with PayPal was never a pleasant experience, but after you created AML program for our business, PayPal closed the case against our company promptly and did not have a lot of questions. You addressed all our concerns and questions and were very quick to respond and resolve issues. Overall, the experience was very professional and we are glad we chose to work with you."
Elena and Michael Gleyzer
Gleyzer International, Inc.
Do We Need to Comply?
The determination of whether or not your firm is required to have an AML program in place during each year is based on the sales and purchases you had in the previous calendar or tax reporting year. An AML program is required when during the past year:
You bought $50,000 or more of Covered Goods (defined below) from non-dealers/retailers (that is, retail purchases),
AND
You sold $50,000 or more of Covered Goods to non-dealers/retailers (that is, retail sales).
What are Covered Goods?
Numismatic or bullion items that derive 50 percent or more of their value from precious metals where precious metals are defined as:
- Gold, iridium, osmium, palladium, platinum, rhodium, ruthenium, or silver, having a level of purity of 500 or more parts per thousand; and
- An alloy containing 500 or more parts per thousand, in the aggregate, of two or more of the metals listed above
For example, most common date Saints and Libs, American Eagles, 90% silver, foreign gold coins, rounds and bullion bars would qualify.
Precious stone and jewel items that derive 50 percent of more of their value from precious stones and/or jewels, or precious metal and finished goods which derive 50% or more their value from jewels, precious stones or precious metals contained or attached to such finished goods. Precious stones and jewels are defined as a substance with gem quality market-recognized beauty, rarity, and value, and include:
- Diamond
- Corundum (including rubies and sapphires)
- Beryl (including emeralds and aquamarines)
- Chrysoberyl
- Spinel
- Topaz
- Zircon
- Tourmaline
- Garnet
- Crystalline and cryptocrystalline quartz
- Olivine peridot
- Tanzanite
- Jadeite jade
- Nephrite jade
- Spodumene
- Feldspar
- Turquoise
- Lapis
- Lazuli
- Opal
What if We Don't Comply?
Some coin dealers and jewelers who operate honest and reputable businesses tend to think they don’t need an AML compliance program. But that is taking a roll of the dice. If you are audited by the IRS they will want to see a copy of your AML compliance program, employee AML training records with signature forms, recent AML program reviews. Should you be unable to produce these documents you may be fined. Typically, the IRS gives you a period of time to put a written AML plan into place, designate a compliance officer, assess your firm’s risks, train staff, make changes to processes and recordkeeping procedures, and have the compliance program independently reviewed.
Because your business bank, PayPal and other financial institutions can be considered an accomplice in money laundering if they don’t perform adequate due diligence on their clients, your institutions may ask to see a copy of your compliance program. And often your independent compliance reviews as well. If you can’t produce a plan in a timely manner you could lose financial privileges.
On the extreme end, penalties for non-compliance can be draconian for those accused of laundering large amounts of money: They run the gamut from financial penalties to seizure of assets to imprisonment. Below are examples of Civil Penalties.
| NEW PENALTIES EFFECTIVE AUGUST 1, 2016 | ||
| Source: Federal Register/Vol. 81, No. 126/Thursday June 30, 2016/ Rules and Regulations 42503-42506 | ||
| CIVIL PENALTIES | ||
| VIOLATION | MINIMUM | MAXIMUM |
| Willful Violations of Bank Secrecy Act | $53,909 | $215,628 |
| Willful or Gross Negligence - Record Keeping | $19,787 | |
| Pattern of Negligent Activity | $83,864 | |
| Negligent Violation | $1,078 | |
If you meet the minimum requirements, having an Anti-Money Laundering Compliance Program in place is the law.
How Do We Comply?
It’s as simple as a confidential phone call to discuss your needs. You might even learn that you don’t need a plan – about 20% of firms that contact us aren’t required to have one. But if you need AML Compliance services you will find that our industry knowledge, depth of regulatory experience, top quality materials and reasonable prices meet your needs.