In the world of precious metals, trust is everything. Whether you're trading gold bars, silver coins, or platinum ingots, your clients expect discretion, security, and professionalism. But with the looming Tranche 2 AML/CTF reforms, bullion dealers in Australia—especially SMEs—must prepare for a significant shift in how they operate.

While bullion dealers have long been on AUSTRAC’s radar, Tranche 2 formalises and strengthens the compliance expectations that will now be enforceable under law. If you’re an SME in the bullion business, the time to act is now.

Here’s what you need to prioritise.

What is Tranche 2, and How Does It Affect Bullion Dealers?

Tranche 2 is the long-awaited extension of Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act. It expands obligations to include Designated Non-Financial Businesses and Professions (DNFBPs)—and crucially, it formalises obligations for dealers in high-value goods, like gold, silver, and other bullion products.

While AUSTRAC has issued guidance in the past, Tranche 2 will now:

• Make AML/CTF compliance mandatory, not optional
• Introduce penalties for non-compliance
• Require formal AML/CTF programs, customer due diligence (CDD), and suspicious matter reporting (SMR)

Your Top 6 Priorities as a Bullion Dealer Under Tranche 2

1. Formalise and Document Your AML/CTF Program

No more informal processes or ad-hoc decisions. You’ll need a written, risk-based AML/CTF program that:

• Assesses your business’s specific risks
• Describes your procedures for onboarding, monitoring, and reporting
• Is reviewed regularly and updated as needed

Tip: Get legal or compliance support to draft this correctly. AUSTRAC expects a formal document with governance controls.

2. Know Your Customer (KYC) – And Then Some

In the bullion industry, large cash purchases and anonymous buyers are red flags. You'll need to:

• Collect and verify full identity information before completing high-value transactions
• Record beneficial ownership for entities
• Apply Enhanced Due Diligence (EDD) when red flags arise (e.g. politically exposed persons, offshore structures)

Threshold: Even a one-off purchase over $10,000 AUD (or equivalent) triggers customer verification and transaction reporting duties.

3. Set Up Transaction Monitoring Systems

You’ll be required to monitor transactions for:

• Structuring (splitting purchases to avoid thresholds)
• Unusual payment methods (crypto-to-cash, third-party payments)
• Frequent, unexplained cash transactions

Best Practice: Create a playbook for frontline staff to recognise suspicious behaviour and escalate concerns efficiently.

4. Establish a Reporting Framework

Under Tranche 2, you’ll be expected to submit:

• Suspicious Matter Reports (SMRs) for transactions that seem unusual or inconsistent
• Threshold Transaction Reports (TTRs) for any cash transaction over $10,000 AUD
• International Funds Transfer Instructions (IFTIs) if applicable

These must be submitted within strict timeframes—within 3 business days for SMRs, for example—so having internal triggers and templates is critical.

5. Train Your People

Every person in your business—especially those in sales, customer service, or handling transactions—needs to:

• Understand AML/CTF obligations
• Know how to complete identity checks properly
• Be trained to recognise and respond to red flags

Training must be ongoing and documented for compliance audit purposes.

6. Review Your Supply Chain and Payment Channels

Risk doesn’t stop at your front door. Make sure to:

• Vet suppliers and payment processors for AML integrity
• Watch for suspicious inbound transactions (e.g. large prepayments from unknown entities)
• Know where your metals are sourced from (e.g. avoiding conflict zones or unverified origins)

What Happens If You Don’t Comply?

Failure to implement Tranche 2 obligations could result in:

• Fines or penalties from AUSTRAC
• Reputational damage in a high-trust industry
• Being denied banking or insurance services
• Increased risk of financial crime exposure

Even as an SME, you’re expected to meet the same standards as larger institutions—scaled to your business size, of course, but no less rigorous in intention.

Final Thoughts

Australia’s bullion market is respected worldwide. Tranche 2 is not just a legal requirement—it’s a business opportunity to build customer trust, attract institutional buyers, and protect your operation from misuse.

By prioritising:

1. A formal AML/CTF program
2. Robust KYC/EDD processes
3. Staff training
4. Transaction monitoring
5. Reporting workflows
6. Responsible sourcing and partnerships

…you’re not only preparing for regulation—you’re elevating your business.

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