Patriot Act compliance expected by summer

By this summer, every member of the jewelry industry—whether manufacturer, wholesaler, gem dealer, metals refiner, or retailer—will be required to comply with new Federal anti- money-laundering laws set forth in the USA Patriot Act passed by Congress in October 2001.

Cecilia Gardner, executive director and general counsel of the Jewelers’ Vigilance Committee, led a coalition of industry associations to help establish the specific set of regulations the jewelry industry will have to follow.

“In the Patriot Act, there is a section requiring all financial institutions to promulgate an anti- money-laundering program,” explains Gardner. The definition of “financial institution,” set forth in a separate piece of legislation, includes a lengthy list of businesses, among which are “dealers in precious metals, gems, and jewels.” The list also includes pawnshops, car dealers, travel agencies, among others.

The Federal Treasury Department approached the JVC to help set down rules for the jewelry, metal and gem industry. The JVC, along with Jewelers of America, the Manufacturing Jewelers and Suppliers of America, the Diamond Manufacturers and Importers Association, the American Gem Trade Association, the American Gem Society, the International Precious Metals Institute, and the World Gold Council, met with Treasury Department officials in Washington last year, and the JVC was then tasked with submitting a proposal of regulations for the industry as a whole.

Those recommendations were submitted to the government in July 2002, and in mid-February 2003, the JVC received back from the Treasury Department a preliminary code of Federal regulations. The industry has until April 22 to comment on the proposed regulations, and the final rules will be published shortly thereafter—hopefully, says Gardner, in time for the JCK Show in Las Vegas.

After the final rules are published, every member of the jewelry industry will have 90 days to bring their businesses into compliance. The JVC will be preparing a list of easy-to-understand guidelines and developing a template for the industry to use and, at press time, Gardner was working on a plan for a major presentation to the industry in Las Vegas (if the final rules are ready in time).