Compliance, the Retailer, and a JVC Road Trip

Gary Roskin, G.G., FGA, Senior Editor -- JCK-Jewelers Circular Keystone, 4/1/2008 8:25:00 AM

The Jewelers Vigilance Committee’s Cecilia Gardner and Suzan Flamm (pictured left) traveled to four east coast cities this past week: Boston, Providence, Philadelphia, and New York, to tell retail jewelers why legal compliance is not an option.

“You must have an anti-money laundering program,” says Flamm, JVC’s new assistant general counsel, told attendees at the Philadelphia event, held March 27 at Loews Philadelphia Hotel. “It’s not that retail jewelers are actively laundering money, but it’s that businesses will be used unwittingly to launder money by criminals and terrorists.”

The free legal compliance seminars gave retail jewelers, suppliers, and estate buyers reasons to be compliant that include self interest to avoid risks, as well as building your reputation. Being compliant also enhances the reputation of the entire jewelry industry, and can build confidence with consumers.

“If you are a retail jeweler who buys and sells more than $50,000 worth of ‘covered goods,’ then you must comply,” says Flamm. It used to be that all government attention was on banks. But now the jewelry industry is being viewed as a financial institution. Criminals buy gems and jewelry and then convert it back to cash. “There’s increased government scrutiny,” says Flamm, “and risks are greater.” When you comply, your risks are much lower.

You do have to have a program if you buy from a foreign source, especially if it’s from a country that has no AML program. You also need a program if you are buying from estate sales or auction houses, even government sponsored sales.

Retail jewelers must be in legal compliance with the Kimberly process, advertising, and appraisal claims. Retailers must require a warranty from suppliers to comply with the Kimberly process. Gemstone disclosures must be clear and conspicuous.

Gardner, president, chief executive officer, and general counsel, helped answer questions regarding compliance with disclosure of gemstone treatment and proper advertising practices, as well as reporting cash sales while assessing whether or not a series of cash sales from one customer could be considered possible laundering activity.


PA Jeweler David C Rotenberg of David Craig Jewelers Ltd. with Cecilia Gardner, buying the JVC handbook on legal compliance.

Flamm and Gardner also touched on competition from online and television retailers, stating that JVC’s purpose is to help get everyone on a fair and level playing field. “This is the stuff we do,” says Gardner. “And we do more.” The four city legal compliance road trip was sponsored by the JCK Industry Fund.

If you missed one of these seminars, JVC has created a DVD Series, sponsored by GE Money, that covers legal compliance and anti-money laundering topics of interest to retailers, manufacturers, wholesalers, distributors, and designers on the manufacture, marketing, and sale of fine jewelry.

JVC has also created legal compliance handbooks and a USA PATRIOT Act Compliance Kit (PACK) for AML program development.

Additional JVC education seminars include:
* “The Art of the Deal” - Your Contractual Obligations When Selling Or Buying
* “Five Easy Ways to Get Sued” - Legal Liabilities of Retail Jewelers
* “Appraisal Liabilities” - Standing Behind Your Jewelry Appraisals
* “Selling Compliantly” - Best Advertising Practices

To purchase products and become a member of JVC, log onto the JVC Web site at www.JVCLegal.org. For more information regarding AML compliance, e-mail Cecilia Gardner at askamlexpert@aol.com.