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, and travel agencies.

The Treasury Department approached JVC to help set down rules for the jewelry, gem, and precious metals industry. JVC, along with Jewelers of America, 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, D.C., last year, and 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. In mid-February 2003, the Treasury Department sent JVC a preliminary code of federal regulations. The industry had until April 22 to comment on the proposed regulations, and the final rules were due to be published shortly thereafter—in time, Gardner hoped, for The JCK Show ~ Las Vegas.

After the final rules are published, members of the jewelry industry will have 90 days to bring their businesses into compliance. JVC will prepare a list of easy-to-understand guidelines and develop 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).