Anti-Money Laundering Compliance in the Gold Industry

May 29, 2025

Why Anti-Money Laundering Is Critical in the Gold Industry

Anti-Money Laundering (AML) is a critical concern in the gold industry due to gold's high value, ease of transport, and liquidity. These characteristics make gold a prime target for criminals seeking to launder illicit funds or finance terrorism. To combat this, regulators worldwide—particularly in Singapore—have implemented stringent AML and Countering the Financing of Terrorism (CFT) frameworks. Gold dealers must understand and implement Anti-Money Laundering controls to remain compliant and protect their operations from legal, reputational, and financial risks.

Anti-Money Laundering Regulatory Framework for Gold Dealers

Who is Regulated: Any dealer in gold, precious metals, or stones is considered a “regulated dealer” under AML/CFT legislation.
Singapore Legislation: The Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 (PSPM Act) is the main statute. See the official guidelines for regulated dealers.

Mandatory Registration: Dealers must register and comply with all requirements. Failure to do so may result in heavy penalties, suspension, or prosecution.

Key Anti-Money Laundering Controls for Gold Businesses

1. Risk Assessment and Risk-Based Anti-Money Laundering Approach

Businesses must identify, evaluate, and document AML/CFT risks based on their client base, products, and operating model.
This risk-based approach is endorsed by the Financial Action Task Force (FATF) and should be embedded in all compliance systems.

2. Anti-Money Laundering Customer Due Diligence (CDD) & Enhanced Due Diligence (EDD)

Standard CDD: Required for any transaction exceeding SGD 20,000. It includes identity verification, business nature, and relationship purpose.
EDD: Necessary for high-risk clients such as PEPs or those from high-risk jurisdictions. Additional scrutiny of source of funds is essential.
Remote Onboarding: For non-face-to-face transactions, robust verification methods must be applied to mitigate impersonation risks.

3. Anti-Money Laundering Transaction Monitoring & Reporting

Cash Transaction Reporting (CTR): Dealers must report transactions over SGD 20,000 to the Suspicious Transaction Reporting Office (STRO).
Suspicious Transaction Reporting (STR): If any transaction appears unusual or linked to criminal activity, it must be reported regardless of the amount.
Red Flags: Examples include multiple transactions just under threshold limits or dealings with sanctioned countries. See this enforcement case.

4. Record-Keeping for Anti-Money Laundering Compliance

Dealers must maintain complete records for a minimum of five years after the transaction or end of the business relationship.
These include customer identity, transaction details, and supporting documents for both in-person and remote dealings.

5. Internal Anti-Money Laundering Policies, Controls and Staff Training

Written AML/CFT Policies: These must reflect your unique risk profile and business structure.

Compliance Officer: A trained officer should oversee implementation and reporting of AML/CFT obligations.
Independent Audits: Conduct routine reviews or engage Gold Inventory Auditing services to validate your compliance programme.
Staff Training: Employees should receive regular updates on recognising suspicious activity and fulfilling reporting requirements.

6. Group-Wide Anti-Money Laundering Policies for Multi-Entity Dealers

Group-wide AML/CFT controls must apply across all subsidiaries and branches, with secure data sharing and local law compliance.

Anti-Money Laundering Best Practices in the Precious Metals Sector

Adopt a proactive, risk-based strategy, not a checkbox approach.
Leverage AML technology tools like KYC databases, watchlist screening, and automated monitoring software.

Monitor for new threats like crypto-backed laundering and supply chain fraud.
Collaborate with industry peers and associations to improve data sharing and red flag detection.

Regulatory Enforcement of Anti-Money Laundering Obligations

Regulatory authorities in Singapore regularly inspect gold dealers. Failure to comply with Anti-Money Laundering controls has led to criminal charges, fines, and business bans. See this case for an example of prosecution due to failed CDD protocols.

Summary Table: Anti-Money Laundering Controls for Gold Dealers

Control Area	Key Requirements
Registration	Mandatory with PSPM; penalties for non-compliance
Risk Assessment	Tailored to business model and updated regularly
Customer Due Diligence	Identity verification, beneficial ownership, source of funds
Monitoring & Reporting	STRs and CTRs filed with STRO
Record-Keeping	Maintain documents for 5 years minimum
Internal Controls	Policies, compliance officers, audits, training
Group Policies	Cross-border integration with legal safeguards

Strengthen Your Anti-Money Laundering Strategy

Anti-Money Laundering compliance is a business-critical function for gold dealers in today's regulatory climate. By integrating risk-based assessments, CDD/EDD protocols, robust internal controls, and staff training, companies can not only meet compliance standards but also protect their operations from crime and reputational harm.

To assess or upgrade your AML/CFT programme, or for support with Gold Inventory Auditing, Contact Us today for practical guidance.