US asks for help in money laundering fight

By JEANNINE AVERSA, AP Economics Writer

Friday, June 3, 2005

06-03) 15:08 PDT WASHINGTON (AP) -- The Bush administration, in its latest effort to nab drug lords
and terrorist financiers, will require major dealers in gold, diamonds and other precious metals and
gems to set up comprehensive anti-money laundering programs.

The Treasury Department's Financial Crimes Enforcement, dubbed FinCen, announced the action on
Friday.

Specifically, such dealers will need to take steps including establishing policies and procedures to
identify risks and minimize opportunities for abuse, training employees and designating a point
person to assess compliance.

The provision applies to dealers who have bought and sold at least $50,000 worth of precious metals
and gems. Dealers whose activities for the 2005 calendar year fall into that dollar threshold will
have until Jan. 1, 2006, to set up anti-money laundering programs.

Given the dollar threshold, most retailers in this industry are not required to set up such
programs, a statement issued by FinCen said.

"The dollar threshold is intended to ensure that the rule only applies to persons engaged in the
business of buying and selling a significant amount of these items, rather than small businesses,
occasional dealers and persons dealing in such items for hobby purposes," the agency said.

The Treasury Department has required a broad range of financial companies to adopt anti-money
laundering programs. The issue took on heightened importance after the Sept. 11, 2001, terror
attacks.

"The characteristics of jewels, precious metals and stones that make them valuable also make them
potentially vulnerable to those seeking to launder money," said FinCen's director William Fox.

In one money-laundering scheme uncovered by authorities, drug-money cash was exchanged for gold,
which was then molded into tools, belt buckles, light switches and other items to be smuggled out of
the country.

Congressional investigators have told the Treasury Department it needed to get a firmer grip on how
terrorists may be using alternative means - such as trafficking in gold and hard-to-trace diamonds -
to raise and move financial assets.

On the Net:
Financial Crimes Enforcement Network: www.fincen.gov/

©2005 Associated Press