6 key insights for AML compliance for bullion dealers
- Bullion dealers are already regulated under the AML/CTF Act because bullion services are “designated services” that pose ML/TF risk.
- Your core obligations include enrolling with AUSTRAC, implementing an AML/CTF program, identifying and verifying customers, reporting to AUSTRAC and keeping records.
- AUSTRAC’s bullion sector risk assessment and indicators of suspicious activity for the bullion sector must feed directly into your ML/TF risk assessment and transaction monitoring settings.
- The 2026 reforms will tighten expectations on all reporting entities, while bringing dealers in precious metals, stones and products into the regime for transactions of A$10,000 or more in cash or virtual assets. Bullion will remain a separate designated service with strict obligations.
- Common challenges include dealing with high-value cash, complex supply chains, customer anonymity, trade-based laundering and linking bullion transactions to gambling or other high-risk activity.
- Specialist Tranche 2 consultants can help bullion dealers refresh risk assessments, redesign AML/CTF programs, tune monitoring, and prepare for AUSTRAC scrutiny in a way that fits your business model.
Bullion has everything criminals like: high value in a small package, global acceptance, and the ability to be melted, reshaped and moved quietly across borders. AUSTRAC’s National Risk Assessment describes the bullion sector as having a medium overall ML/TF risk, with very significant vulnerabilities. Let’s understand the obligations related to AML compliance for bullion dealers in Australia.
As a result, bullion dealers are already reporting entities under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). If you buy or sell bullion as part of a business, you are squarely in scope of AML compliance for bullion dealers and must meet AUSTRAC’s rules.
On top of that, the broader AML/CTF reform program and Tranche 2 changes for dealers in precious metals, stones and products will lift expectations right across the precious metals ecosystem from 31 March 2026 (for existing reporting entities) and 1 July 2026 (for new Tranche 2 entities).
The legal and regulatory framework for bullion dealers
Who counts as a bullion dealer?
AUSTRAC’s Bullion dealers overview explains that bullion dealers are businesses that buy or sell bullion and may include: precious metal traders, refiners, jewellers, coin dealers and pawn brokers.
“Bullion” is generally understood to be gold, silver, platinum or palladium authenticated to a specified fineness, in investment-grade forms such as bars, ingots, plates, wafers or similar mass forms. Jewellery and scrap gold usually fall under other categories.
If you buy or sell bullion in the course of a bullion-dealing business, you are providing a designated service and therefore a reporting entity.
Existing AML/CTF obligations
According to AUSTRAC’s quick guide and sector pages, bullion dealers that provide designated services must:
- enrol with AUSTRAC
- implement and maintain an AML/CTF program
- identify and verify customers
- report certain information to AUSTRAC
- keep AML/CTF records.
These obligations have applied for several years; they are not new. However, AUSTRAC is now raising the bar on how well these obligations are understood and implemented in practice.
Tranche 2 reforms and bullion
The AML/CTF reform program focuses on expanding the regime to additional high-risk services, including dealers in precious metals, stones and products that are not already covered as bullion dealers. From 1 July 2026, AML/CTF obligations will apply to buying or selling precious metals, stones and products for A$10,000 or more in physical currency or virtual assets.
Bullion itself remains a separate, already-regulated designated service, but the reforms will:
- update and strengthen obligations for current reporting entities from 31 March 2026, and
- bring non-bullion precious metals and stones traders into the net, raising expectations across the wider sector.
In simple terms: if you are a bullion dealer today, you are already expected to be “Tranche 2-ready” in how you manage precious metals risk.
AUSTRAC guidance bullion dealers must know
AUSTRAC has created a suite of resources specifically for bullion dealers and related precious metals businesses, including:
- Bullion dealers overview and Bullion dealers Quick Guide – high-level obligations, definitions and services in scope.
- Money laundering and terrorism financing risk assessment: Bullion dealers in Australia – detailed sector-wide risk assessment with an overall medium risk rating.
- Indicators of suspicious activity for the bullion sector – AUSTRAC’s own red flag list for bullion transactions.
- Risk insights and indicators for dealers in precious stones, metals and other products – complementary insights for non-bullion precious metals and stones.
- AML/CTF reform hub and Check if you may be regulated (Reform) – to understand how Tranche 2 for precious metals, stones and products intersects with your bullion business.
Your AML/CTF program should explicitly reference these documents and show how you have used them.
Core AML/CTF obligations – what bullion dealers must do in practice
Enrolment with AUSTRAC
All bullion dealers that provide designated services must enrol with AUSTRAC and keep their details up to date (ownership, structure, contact people and services offered).
If you are diversifying into non-bullion precious metals or virtual assets, you will also need to monitor AUSTRAC’s Tranche 2 guidance pages closely.
AML/CTF program tailored to bullion
AUSTRAC expects bullion dealers to have a written AML/CTF program that:
- is based on a current ML/TF risk assessment
- sets out governance, roles and responsibilities
- includes detailed customer identification and verification procedures
- explains your transaction monitoring and reporting approach
- describes record-keeping and staff training
- is reviewed regularly, particularly when business models or risks change.
Most bullion dealers structure their program into:
- Part A – risk assessment, governance, controls
- Part B – customer identification and verification procedures.
Customer due diligence (CDD) – including thresholds
AUSTRAC material makes clear that bullion services attract threshold-based obligations:
- customer identification is required from A$5,000 in total bullion transactions with a customer (the customer identification threshold), and
- transaction reporting obligations often apply from A$10,000 in cash or equivalent (the TTR threshold).
Good practice CDD for AML compliance for bullion dealers includes:
- verifying customers reliably before high-value trades
- identifying and verifying beneficial owners where customers act for companies or trusts
- understanding the purpose of the transaction and source of funds for larger or repeated trades
- applying enhanced due diligence where risk factors (e.g. high-risk jurisdictions, complex structures, adverse media) are present.
Transaction monitoring and reporting
AUSTRAC’s indicators of suspicious activity for the bullion sector highlight behaviours that should trigger closer review and possible Suspicious Matter Reports (SMRs), such as customers who:
- buy and sell bullion frequently at a loss
- purchase high-value bullion or pay invoices using large sums of cash
- break down transactions into smaller amounts to avoid the A$5,000 ID threshold or A$10,000 reporting threshold
- rapidly sell bullion purchased with unknown-source funds and move the proceeds into other high-risk sectors (e.g. online gambling).
Your monitoring systems – manual, automated or hybrid – should be tuned around AUSTRAC’s indicators and your own risk assessment, and must support timely SMR and TTR reporting.
Record keeping and training
Bullion dealers must keep records of:
- customer identification and verification
- bullion purchases, sales, invoices and payment methods
- SMR and TTR decisions and submissions
- AML/CTF risk assessments and program updates
- staff training delivered.
Staff at all levels – front office, back office, finance, and management – should receive AML/CTF training that covers bullion-specific risks and AUSTRAC’s expectations.
ML/TF/PF risk landscape and red flags for bullion dealers
Why criminals like bullion
AUSTRAC’s sector resources highlight why bullion is such an attractive ML tool:
- High value, small volume – large sums can be stored or transported in a compact form.
- Global fungibility – bullion is recognised and tradable worldwide.
- Ease of conversion – it can be turned back into cash or other assets with limited documentation in some channels.
- Perception of legitimacy – bullion is associated with investment, wealth preservation and hedging.
These features make it ideal for:
- integrating cash-based criminal proceeds into apparently legitimate investments
- moving value across borders without using the banking system
- layering funds through a mix of gold, gambling, remittance and trade activities.
A recent AUSTRAC intelligence case (Operation Dartmoor) highlighted how significant gold sales to a bullion dealer with ML links formed part of a broader laundering and gambling scheme, underlining the sector’s vulnerability.
Key red flags from AUSTRAC’s bullion indicators
AUSTRAC’s Indicators of suspicious activity for the bullion sector set out specific red flags. Common ones include:
- customers buying and selling bullion frequently at a loss
- repeated high-value cash purchases with no clear source of funds
- splitting payments across days or branches to stay under A$5,000 or A$10,000 thresholds
- use of third parties to pay or collect on behalf of the apparent customer
- links to adverse media, scams, fraud, drug trafficking or tax evasion
- customers unwilling or unable to provide identification or basic KYC information.
Your AML/CTF program should show how these indicators have been built into your onboarding, ongoing monitoring and SMR decision framework.
Best practices for AML compliance for bullion dealers
Build a living risk assessment
Use AUSTRAC’s Bullion Dealers in Australia risk assessment, sector indicators and wider precious-metals risk insights to create an ML/TF/PF risk assessment that:
- maps your customer segments (walk-in retail, wholesale, investors, high net worth, offshore buyers)
- considers channels (in-store, online, telephone, intermediaries)
- looks at products (bars, coins, pooled accounts, storage)
- assesses geographies (domestic only, export, import, offshore storage).
Update it regularly as your business model and AUSTRAC’s expectations evolve.
Tighten KYC and beneficial ownership
Strong customer due diligence is non-negotiable:
- move to electronic verification wherever possible
- identify and verify beneficial owners of corporate and trust customers
- ask clear source of funds questions for larger or unusual trades
- set risk-based transaction and account limits aligned to the customer profile.
This is where many enforcement cases fall down: AUSTRAC often finds that basic customer information was never properly verified or updated.
Smarter transaction monitoring
Combine AUSTRAC’s red flags with your own data to design practical monitoring, for example:
- scenarios for frequent loss-making trades
- alerts for structured payments just under thresholds
- flags for customers linking bullion activity with gambling, remittance or high-risk counterparties
- reviews for repeated cash purchases from customers with no obvious legitimate income source.
Monitoring does not need to be complex, but it does need to be risk-based, explainable and effective.
Integrate tax, fraud and sanctions risk
Practically, AML in bullion businesses overlaps with:
- tax evasion risk (under-reporting or mis-describing trades)
- fraud and scams (victims liquidating assets on behalf of criminals)
- sanctions and export-control risk (shipments or sales linked to high-risk jurisdictions).
Best practice is to bring these together into a single risk view, not treat them as separate silos.
Embed training and culture
Frontline staff need to recognise that AML compliance for bullion dealers is part of good customer service and business protection, not an optional extra. Training should:
- use realistic bullion-specific scenarios
- explain why thresholds exist and how criminals try to avoid them
- give clear escalation pathways to your AML/CTF officer
- be refreshed regularly and documented for AUSTRAC.
Common challenges bullion dealers face
From AUSTRAC material and industry experience, typical pain points include:
- Cash-heavy business models
Handling large amounts of cash makes source-of-funds assessment and transaction monitoring more complex. - Mix of retail and wholesale customers
Balancing walk-in trade, wholesale trades and online orders in a single AML framework is operationally challenging. - Multiple product lines
Many bullion dealers also trade in jewellery or stones, meaning they will sit across both existing bullion regulation and Tranche 2 DPMS reforms from 2026. - Legacy systems and manual processes
Spreadsheets and paper-based records make it hard to track thresholds, monitor patterns and evidence SMR decisions. - Keeping up with AUSTRAC reforms
The pace of change, especially around Tranche 2 and revised rules, can stretch small compliance teams.
How Tranche 2 consultants can help bullion dealers
Although bullion dealers are not “new” Tranche 2 entities, consultants working on Tranche 2 for dealers in precious metals, stones and products are operating at the sharp end of AUSTRAC’s latest expectations. That experience is directly relevant to bullion businesses.
On this firm’s blog, it is worth being open about how we typically help with AML compliance for bullion dealers:
Bullion AML health check
- Review your current AML/CTF program against AUSTRAC’s Bullion dealers Quick Guide, sector risk assessment and bullion indicators.
- Map out gaps in governance, KYC, monitoring and reporting and prioritise remediation.
Risk assessment and program uplift for 2026
- Rebase your ML/TF/PF risk assessment using AUSTRAC’s latest NRA, bullion sector insights and Tranche 2 materials for precious metals.
- Redesign your AML/CTF program so it is risk-based, practical and clearly aligned to AUSTRAC guidance.
Monitoring and reporting optimisation
- Tune your monitoring scenarios around AUSTRAC’s bullion red flags and your own transaction data.
- Strengthen SMR decision frameworks and documentation so they withstand AUSTRAC review.
Policy, training and culture
- Draft clear, user-friendly procedures for frontline staff and management.
- Deliver tailored AML/CTF training that makes sense to sales, counter staff and management, not just compliance teams.
The goal is simple: to move your bullion business from “baseline compliance” to confident, risk-aware and regulator-ready, without losing commercial agility.
"The Tranche 2 reforms shift focus towards assessing and managing risks rather than ticking boxes. Bullion dealers now face greater expectations for the quality of their Suspicious Matter Reports and the effectiveness of their monitoring systems."
FAQs – AML compliance for bullion dealers
1. What is AML compliance for bullion dealers in Australia?
AML compliance for bullion dealers means meeting all obligations under the AML/CTF Act as a provider of designated bullion services. This includes enrolling with AUSTRAC, maintaining a risk-based AML/CTF program, conducting customer due diligence, monitoring transactions, lodging Suspicious Matter Reports and Threshold Transaction Reports, and keeping accurate records.
2. Are bullion dealers part of Tranche 2?
No. Bullion dealers are already regulated under the AML/CTF Act and have been for some time. Tranche 2 reforms extend AML/CTF obligations to additional high-risk services such as dealers in precious metals, stones and products (non-bullion), real estate, and professional services. However, the same reform package also tightens expectations on current reporting entities, including bullion dealers, from 31 March 2026.
3. What AUSTRAC guidance should bullion dealers follow?
Key AUSTRAC resources include the Bullion dealers overview and Bullion dealers Quick Guide, the Money laundering and terrorism financing risk assessment: Bullion dealers in Australia, the Indicators of suspicious activity for the bullion sector, and the broader risk insights for dealers in precious stones, metals and other products plus the AML/CTF reform hub.
4. What are common red flags for money laundering involving bullion?
Common red flags include frequent buying and selling of bullion at a loss, large cash purchases with no clear source of funds, structuring payments to stay below A$5,000 identification and A$10,000 reporting thresholds, use of third parties to buy or sell on someone else’s behalf, and links to scams, fraud, drugs or high-risk jurisdictions. AUSTRAC’s indicators of suspicious activity for the bullion sector provide detailed examples.
5. How do the 2026 reforms affect bullion dealers?
The 2026 reforms introduce AML/CTF regulation for dealers in precious metals, stones and products and modernise requirements for all reporting entities. For bullion dealers, this means your AML/CTF program, risk assessment, CDD, monitoring and reporting will be assessed against a more explicit, risk-based standard. You should expect more focus on effectiveness, quality of SMRs and the way you manage high-risk products and payment methods, including cash and virtual assets.
6. Do small bullion shops still need a full AML/CTF program?
Yes. Any bullion dealer that provides designated bullion services must have an AML/CTF program, irrespective of size. AUSTRAC allows a proportionate approach, so smaller, lower-risk businesses can adopt simpler processes, but they must still cover core elements: risk assessment, KYC, monitoring, SMR/TTR reporting, record keeping and training.
7. How can consultants specialising in Tranche 2 and precious metals help bullion dealers?
Specialist consultants can help bullion dealers by reviewing and uplifting their AML/CTF programs, refreshing risk assessments, tuning transaction monitoring to AUSTRAC’s bullion indicators, designing practical procedures and checklists for high-value trades, training staff, and preparing for AUSTRAC enquiries or inspections. Many of the tools and approaches developed for Tranche 2 precious metals and stones dealers translate directly to bullion.
