Anti-Money Laundering Act
Also: MLR, AML Regulations, Money Laundering Regulations
The UK Money Laundering Regulations require precious-metal dealers above certain thresholds to identify their customers and report suspicious transactions.
The UK's anti-money-laundering framework – the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the "Money Laundering Regulations") – implements the international anti-money-laundering standards into national law and applies to the commercial trade in precious metals, jewellery and antiques. Anyone who buys or sells gold, silver or other precious metals as a business may be a "high value dealer" and must fulfil a range of due-diligence obligations.
Who Is Affected?
Obliged businesses in the precious-metals sector include in particular:
- Gold dealers, refineries and precious-metal refiners
- Jewellers and jewellery dealers
- Pawnbrokers and buyers of scrap gold or broken gold
- Coin dealers who trade commercially in bullion coins or collector coins
Private sellers are generally not obliged – the due-diligence duties fall on the commercial counterparty. Businesses that accept high-value cash payments must register as high value dealers with HMRC.
The Key Thresholds
| Situation | Threshold | Obligation |
|---|---|---|
| Cash payment for a precious-metal purchase | at/above the high-value threshold | Customer due diligence (identification) |
| Other transactions | risk-based | Customer due diligence |
| Suspicion of money laundering | regardless of amount | Suspicious Activity Report (SAR) to the NCA |
| High-risk third countries | any amount | Enhanced due diligence |
A business dealing in goods that accepts or makes high-value cash payments must register as a high value dealer and carry out customer due diligence. This makes anonymous over-the-counter cash deals above the threshold impermissible. Always check the current cash threshold on gov.uk, as HMRC updates it from time to time.
Obligations in Detail
Customer due diligence (KYC – Know Your Customer):
- Identification of the contracting party using official photo ID
- Determination of the beneficial owner (e.g. for purchases made through third parties)
- Obtaining information about the purpose and nature of the business relationship
- Ongoing monitoring of existing business relationships
Internal control measures (for larger businesses):
- Appointment of a nominated officer / money-laundering reporting officer
- Risk assessment and internal policies
- Staff training
- Record-keeping and retention obligations (typically 5 years)
Suspicious Activity Report to the NCA: If there are grounds to suspect money laundering or terrorist financing, the dealer must report this to the National Crime Agency (NCA) – regardless of any monetary threshold and, where relevant, before carrying out the transaction.
Consequences of Breaches
Breaches of the Money Laundering Regulations can be penalised with substantial fines and, in serious cases, criminal sanctions. Supervision of high value dealers rests with HMRC.
Distinction from Tax Rules
The Money Laundering Regulations are a preventive framework governing the prevention of money laundering – they make no statement about the tax treatment of gains from precious-metal sales. For questions about Capital Gains Tax or the VAT exemption for investment gold, separate tax rules apply. Note: This does not constitute tax or legal advice.
When buying precious metals, sellers should expect that reputable dealers will request a copy of photo ID for high-value cash transactions – this is a legal requirement, not optional.
In Brief
The Money Laundering Regulations require precious-metal dealers to identify customers for high-value cash payments and to report suspicious transactions; private buyers and sellers are not directly obliged but should expect their counterparty to fulfil these duties.