The new anti-money-laundering rules of the USA PATRIOT Act specifically exempt jewelers who buy less than $50,000 from non-U.S. companies. Which has caused some to wonder … will that mean domestic jewelers will buy less merchandise from overseas businesses?
This has caused real concern abroad—but Cecilia Gardner, executive director of the Jewelers Vigilance Committee, says she “doubts” it will have an impact. “If a retailer wants the product enough, and the price is right, they will make the purchase,” she argues. “The burdens the retailer then has to institute are really rather low. They are not enough of a barrier for retailers to change their buying decisions.”
Major buyers contacted by JCK tend to agree. “We’ve been moving toward direct product sourcing as part of our strategic plan,” says David Sternblitz, vice president and treasurer for Zale Corp. “As part of our strategic plan a number of our new vendors are overseas. We are still at the very early stages but at this point I don’t think this changes our strategic plan.”
Gardner notes that, even if a retailer does meet the threshold and has to institute an anti-money-laundering program, the program applies only to their activities with the non-U.S. dealers. “So if once a year they go off to Hong Kong and make purchases there, then their program only involves their Hong Kong trip,” she says.
She also notes that many foreign suppliers will likely institute the rules anyway. “A foreign supplier who has any kind of physical presence, like a sales office or a sales force, or if they attend a trade show, must comply with the rules,” she says.