80% of jewellers skip registration with FIU
Thu Aug 22 2024
Jewellers continue to be hesitant about reporting high-value or suspicious cash transactions, even after a year-and-a-half of mandatory registration under the Prevention of Money Laundering Act. According to sources, less than one fifth of a total of 100,000 jewellers have registered with the respective trade bodies or reported any suspicious cash transactions or cash transactions over Rs 10 lakh.
In 2023, the government issued a guidance note for precious metals dealers regarding compliance with anti-money laundering norms.
Government guidelines state that jewellers with an annual turnover of more than Rs 500 crore must share information with the Financial Intelligence Unit (FIU). Jewellers with a gross annual turnover of less than Rs 500 crore must register with trade bodies such as the Indian Bullion and Jewellers Association, Gem and Jewellery Council, and Gem and Jewellery Export Promotion Council. These trade bodies will appoint a nodal officer to provide the required information to the FIU. Such jewellers do not have to register with FIU.
According to the spokesperson of the Gem and Jewellery Council, a national organisation for jewellers, they have approximately 2,000 registered members who are automatically considered registered for PMLA. The council’s official acts as the nodal officer and coordinates with FIU.
It is estimated that there are over 100,000 jewellers in the country. The serious issue is that among the registered jewellers, very few report cash transactions above Rs 10 lakh to the nodal officers.
Surendra Mehta, the national secretary and nodal officer of IBJA, stated that in the past year and a half, no one has reported cash transactions above the prescribed limit or any suspicious cash transactions.
A senior banker who handles gold business at a private sector bank stated that the responsibility to register under PMLA and report cash transactions lies with the jewellers and not bankers who deal with them. He added, “Because we only deal with RTGS and not cash, we don’t have to worry about cash deals.”
The matter becomes even more serious because approximately 155 tonne of gold was imported unofficially in India in 2023. These business deals are conducted in cash until they reach the ultimate consumers. All of these cash transactions worth billions of rupees in the system go untraced.
Source: https://www.financialexpress.com