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These Two Tips Can Keep You Out of Legal Hot Water in 2018



Are you covered on the legal issues we face in the jewelry industry? At Jewelers Vigilance Committee (JVC), we’re here to help. Let’s start with anti money laundering (AML) and Made in the USA.

Make sure you have an anti money laundering program — we’ve seen the IRS increase audits lately. As Investopedia states, anti-money-laundering laws may cover a relatively limited number of transactions and criminal behaviors, but their implications are far-reaching. For example, AML regulations require institutions issuing credit or allowing customers to open accounts to complete due-diligence procedures to ensure they are not aiding in money-laundering activities.

You are considered a dealer if you purchased “covered goods” (precious metal, jewels and stones and finished goods) in an amount in excess of $50,000 during the prior calendar or tax year and received more than $50,000 in gross proceeds from the sale of precious metal, jewels and stones during the same period. The calculation of the value threshold for purchase and sale is limited to the value of the precious metal, precious jewels and stones only.

Some exceptions apply! Retailers (those selling primarily to the public) may not need to implement an AML program if you qualify for one of the following exceptions:

  • If you are a retailer and purchase only from other dealers (as defined above) who implement a US AML program, you do not need to comply.
  • If you do purchase from non-dealers, such as members of the public and foreign sources of supply (to whom the US rules do not apply), and the value of the covered goods is less than $50,000, you do not need to comply.

For the purpose of determining your exception status, you need not include purchases in the form of trade-ins, as long as they did not include providing funds of any kind to the customer in exchange for trade-ins of such covered goods.

Secondly, be sure you’re not accidentally getting into hot water by claiming or passing along a claim of “Made in the USA” by mistake. In order to qualify under the FTC guides, the entire piece, its design and manufacture, and, most importantly, all of the components must originate from the US, making it almost impossible to substantiate this claim. As an alternative, you can claim “designed in the USA,” “made in the USA from the world’s finest materials,” “assembled in the USA” and “assembled in the USA from exotic materials from around the world.”


This article originally appeared in the February 2018 edition of INSTORE.

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