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Protecting Your Business: A Guide to Suspicious Transactions in the Jewellery and Bullion Industry
In the high-stakes world of jewellery and bullion, staying ahead of anti-money laundering (AML) regulations isn’t just about compliance—it’s about safeguarding your business’s reputation and financial integrity. The Prevention of Money Laundering Act (PMLA) requires vigilance from every team member, from sales representatives to procurement teams, to identify and report suspicious transactions to the Financial Intelligence Unit (FIU).
What Makes a Transaction Suspicious?
A suspicious transaction is any financial activity that seems unusual, lacks a clear purpose, or raises questions about its legitimacy. This includes transactions that:
- Involve money from criminal activities
- Are structured to hide the true source of funds.
- Seem overly complex without a valid reason.
- May be linked to terrorism financing.
In simpler terms, any transaction that deviates from a customer’s normal behavior, involves large sums of money, or lacks transparency can be considered suspicious. Once identified, these transactions must be reported via a Suspicious Transaction Report (STR) to the FIU for further investigation.
Common Red Flags in the Jewellery and Bullion Industry
To ensure compliance with PMLA regulations, it’s crucial to train employees to recognize and report suspicious behaviors, such as:
- Reluctance to provide personal or financial information.
- Submission of tampered or altered documents.
- Inability to explain the source of funds.
- Discrepancy between the customer’s stated purpose and transaction activity.
- Large cash transactions (above INR 10 lakh) without a valid justification.
- Splitting high-value purchases into smaller amounts to evade reporting.
- Payments made by third parties whose identity is unclear or suspicious.
The Power of AML Training
Given the complexities of AML compliance, comprehensive training is essential to equip employees with the skills to detect and report suspicious transactions. A well-trained workforce enhances compliance, mitigates risks, and protects businesses from financial crime penalties. Finmetals offers specialized online training solutions that cover:
- Identifying suspicious transactions.
- Understanding PMLA regulations.
- Filing Suspicious Transaction Reports (STRs).
- Implementing best practices for AML compliance
Staying Updated with Global AML Trends
Staying informed about global AML developments is vital for businesses in the jewellery and bullion industry. Recent updates include:
- Philippines Removed from FATF Grey List after three years of enhanced monitoring.
- FATF Plenary outcomes highlighting global AML advancements.
- FATF’s work on combating proliferation financing and countermeasures against Iran.
- Argentina’s Crypto Crackdown following FATF pressure.
Ensuring Seamless PMLA Compliance
Navigating PMLA regulations can be complex, but with the right tools and training, businesses can ensure seamless compliance. Finmetals offers tailored solutions to help businesses in the jewellery and bullion industry detect and prevent suspicious transactions effectively. For a demo of our PMLA compliance training and solutions, contact us today. Let’s build a secure and compliant financial ecosystem together!
For any queries related to PMLA compliance, please reach out to the Compliance team.