[Jewelry making - Article 00245] - Re: [Orchid] News on Patriot Act?

[Daniel Spirer]

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    The Jewelers Vigilance Committee (which you should all belong to so
    you get these updates yourself instead of having to wait until
    someone like me posts it on Orchid--not to mention that it supports
    the entire jewelry industry) has just posted the rules based on the
    USA Patriot Act.  Based on my reading of what they are saying it is
    unlikely that most of you have to do anything.  Retailers appear to
    be exempt as long as they don't make major purchases (over $50k per
    year) from any foreign gem or jewelry dealers (US dealers have to
    comply with the act) or any major purchases from your customers. 
    Gem dealers, on the other hand, might want to look into this a
    little closer. 

    What follows is part of the transcript of the JVC email I just
    received (hopefully I'm not violating any copyright here) and the
    JVC does offer the opportunity to purchase a compliance kit.  You
    should contact the JVC directly if you want the kit. 

          JANUARY 1, 2006 IS COMPLIANCE DEADLINE 

          The US Treasury Department has issued the final rules
          requiring "dealers" in precious metals, jewels and stones to
          institute anti-money laundering (AML) programs.  YOU MUST
          COMPLY BY JANUARY 1, 2006. 

          According to the final rules, you must institute an AML
          program if: 

          1.      You are a dealer, meaning, you purchased "covered
          goods" (precious metal, jewels and stones) in an amount in
          excess of $50,000 during the prior calendar or tax year AND
          received more than $50,000 in gross proceeds from the sale of
          precious metal, jewels or stones during the same period. 

          2.      The calculation of the value threshold for purchase
          and sale is limited to the value of the precious metal, jewels
          and stones ONLY! 

          IMPORTANT EXCEPTIONS FOR RETAILERS - READ THIS!!!!! 

          According to the final rules, retailers (those selling
          primarily to the public) may not need to implement an AML
          program if you qualify for one of the following exceptions:

          1.      If you are a retailer, and purchase only from other
          dealers (as defined above) who implement a U.S. AML program,
          you do not need to comply. 

          2.      If you do purchase from non-dealers, such as members
          of the public and foreign sources of supply (to whom the US
          rules do not apply), and the value of the covered goods is
          less than $50,000, you do not need to comply.  If the value of
          the covered goods is more than $50,000 in any one calendar or
          tax year, you must comply.

          3.      If you are a licensed pawn broker (rules for pawn
          brokers will be published by Treasury at a later date).

          Retailers:  For the purpose of determining your exception
          status you need not include in your calculation purchases in
          the form of trade ins, as long as they did not include
          providing funds of any kind to the customer in exchange for
          trade ins of such covered goods. 


Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140
617-2344392
www.spirerjewelers.com

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