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

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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.”

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

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Wilkerson Testimonials

Retirement Made Easy with Wilkerson

The store was a landmark in Topeka, Kansas, but after 80 years in business, it was time for Briman’s Leading Jewelers to close up shop. Third generation jeweler and owner Rob Briman says the decision wasn’t easy, but the sale that followed was — all thanks to Wilkerson. Briman had decided a year prior to the summer 2020 sale that he wanted to retire. With a pandemic in full force, he had plenty of questions and concerns. “We had no real way to know if we were going to be successful or have a failure on our hands,” says Briman. “We didn’t know what to expect.” But with Wilkerson in charge, the experience was “fantastic” and now there’s plenty of time for relaxing and enjoying a more secure retirement. “I would recommend Wilkerson to any retailer considering a going-out-of-business sale,” says Briman. “They’ll help you reach your financial goal. Our experience was a tremendous success.”

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

Published

on

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.

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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.

Continue Reading
Advertisement

SPONSORED VIDEO

Wilkerson Testimonials

Retirement Made Easy with Wilkerson

The store was a landmark in Topeka, Kansas, but after 80 years in business, it was time for Briman’s Leading Jewelers to close up shop. Third generation jeweler and owner Rob Briman says the decision wasn’t easy, but the sale that followed was — all thanks to Wilkerson. Briman had decided a year prior to the summer 2020 sale that he wanted to retire. With a pandemic in full force, he had plenty of questions and concerns. “We had no real way to know if we were going to be successful or have a failure on our hands,” says Briman. “We didn’t know what to expect.” But with Wilkerson in charge, the experience was “fantastic” and now there’s plenty of time for relaxing and enjoying a more secure retirement. “I would recommend Wilkerson to any retailer considering a going-out-of-business sale,” says Briman. “They’ll help you reach your financial goal. Our experience was a tremendous success.”

Promoted Headlines

Most Popular