Red flags for dealers in gold, art and luxury goods

What supervisors and standard-setters expect

Dealers in precious metals and stones sit in the FATF framework as a designated non-financial sector, and the FATF has published risk-based approach guidance written with the industry. It is non-binding, and the FATF page notes that it predates the 2025 revisions to Recommendation 1. The binding rules are national, and most key numbers turn on cash.

In the UK, a high value dealer is a firm that makes or receives cash payments of at least £10,000 in total for a transaction, including linked operations. Regulation 27 applies customer due diligence to dealers' cash transactions of £10,000 or more, and to art market participants' trades of works worth £10,000 or more; the sums were substituted on 30 June 2026. In the EU, Regulation 2024/1624 makes persons trading precious metals, stones, high-value goods and cultural goods (at €10,000 or more) obliged entities from 10 July 2027, caps cash payments in commercial dealings at €10,000 under Article 80, and requires at least basic identification for cash transactions of €3,000 or more unless a national limit applies. For these traders the supplier counts as a customer too. In the US, 31 CFR 1027.210 requires a written program built on a risk assessment that covers products, customers, suppliers, distribution channels, geography and transactions outside established customers or sources of supply, plus a compliance officer, training and independent testing.

Canada shows where the sector falls short. FINTRAC imposed $264,000 on Spence Diamonds on May 8, 2025, for five violations. The most serious was failing to file suspicious transaction reports despite indicators such as a client transacting at different locations or with different employees, an apparently altered or stolen payment card, and a client avoiding face-to-face dealing. FINTRAC also found incomplete policies, an undocumented client risk rating method, gaps in training, and no effectiveness review. The September 2026 FATF and APG evaluation of Canada concluded that supervision focused on higher-risk entities leaves dealers in precious metals and stones, and real estate, vulnerable.

For this page's red flags, the duty map is straightforward. Large cash for scrap or bullion from an unexplained source engages the cash thresholds and the aggregation of linked payments. Buyers acting through shells or paying through third parties engage beneficial ownership and the identity of who is really paying. Suppliers who cannot show where metal came from engage the supplier-as-customer rule and the US requirement to risk-assess transactions outside established sources of supply. Turnover out of line with size is what monitoring and suspicious transaction reporting exist to catch.

As of October 2026: Checked October 21, 2026. UK thresholds were re-set by S.I. 2026/621 on 30 June 2026 and the page does not show the earlier figures. The EU rules are not yet in application. The FATF's own cash threshold for these dealers could not be confirmed from an FATF page that opened, so it is not stated here. The US dealer definition and its $50,000 purchase test were read but not repeated. The Spence Diamonds penalty is closed; other FINTRAC jewellery penalties are under Federal Court appeal and may change.