Plain-English guide

Do jewelers need an AML program?

Updated October 2026 · Based on 31 CFR 1027.100 and 1027.210, FinCEN's rule for dealers in precious metals, precious stones or jewels

Many jewelers are surprised to learn that a federal rule may require them to keep a written anti-money-laundering (AML) program. The rule is FinCEN's dealer rule at 31 CFR Part 1027. Whether it applies to you depends on what you buy and sell, how much, and who you buy from. This guide walks through the tests in order, so you can see where your business lands.

1. Step 1: Do you deal in "covered goods"?

The rule only counts covered goods. These are jewels, precious metals and precious stones. They also include finished goods, such as jewelry, numismatic items and antiques, that get 50% or more of their value from jewels, precious metals or precious stones (31 CFR 1027.100(a)).

Here's what that means at the counter:

A gold chain, a diamond ring, a loose sapphire or a bullion coin is almost always a covered good.
Costume and fashion jewelry with little or no precious content usually isn't, because it doesn't get half its value from those materials.
Mixed pieces, such as items with a high design or labor cost, need a closer look. Ask whether at least half the value comes from the metal and stones.

Jewels, metals or stones built into industrial machinery or equipment are excluded, along with the sale of that equipment (31 CFR 1027.100(b)(4)). Most jewelry stores never deal with these.

2. Step 2: The general dealer test

You're generally a dealer if you're in the business of buying and selling covered goods in the US and, during the prior calendar or tax year, you both:

bought more than $50,000 of covered goods, and
received more than $50,000 in gross proceeds from selling covered goods (31 CFR 1027.100(b)(1)).

Three details matter:

Both lines. You must cross both thresholds. A business that sold $200,000 of covered goods but bought only $40,000 doesn't meet this test.
Prior year. The test looks back at the last calendar or tax year, not the current one.
Metal and stone value only. For finished goods, only the value of the jewels, precious metals or precious stones counts toward the $50,000 thresholds, not the full price of the piece (31 CFR 1027.100(b)(5)).

If you mainly sell to other businesses, as a wholesaler, manufacturer or refiner does, this general test is the one that applies to you.

3. Step 3: The retailer test

Most jewelry stores are retailers. A retailer is a business that sells covered goods mainly to the public (31 CFR 1027.100(f)). Retailers get a narrower test. A retailer is a dealer only if, during the prior calendar or tax year, it bought more than $50,000 of covered goods from persons other than dealers or other retailers (31 CFR 1027.100(b)(2)(i)). Those persons include members of the public and foreign sources of supply.

So for a retail store, the question isn't how much inventory you bought from your usual suppliers. It's how much you bought from:

walk-in customers selling scrap gold, estate jewelry, coins or loose stones;
private collections and estates; and
foreign sources of supply.

An example. Last year a store sold $900,000 of jewelry. It bought its new inventory from wholesalers. It also bought $38,000 of scrap gold over the counter. On those facts, the store isn't a dealer this year under the retailer test, because its purchases from the public weren't more than $50,000. If those counter purchases had been $62,000, it would be. Our guide to buying gold from the public shows how to track that number month by month.

If a retailer does cross the line, there's some good news. Its program only has to address those purchases from people other than dealers and retailers (31 CFR 1027.210(a)(2)).

4. Trade-ins don't count as purchases

When a customer trades in a piece and you credit its value toward another purchase or their account, without paying out funds, that isn't a "purchase" or "sale" for the dealer definition (31 CFR 1027.100(b)(3)). A customer who trades in an old ring toward a new one doesn't add to your purchase total.

The exclusion depends on not providing funds. If a deal mixes a trade-in credit with a cash or check payout, keep clear records of which part was which, and ask counsel how to count it (recommended practice).

5. Pawn shops

Licensed or authorized pawnbrokers are excluded only to the extent of their pawn transactions, including selling pawn loan collateral (31 CFR 1027.100(b)(2)(ii)). Gold or jewelry bought outright over the counter isn't a pawn transaction. Those purchases can still count toward the thresholds above. A pawn shop that buys a lot of gold outright should run the tests on those purchases.

6. If you're covered: the six-month deadline

A business that becomes a dealer must have its AML program in place within six months after it becomes subject to the rule (31 CFR 1027.210(c)). The rule's original start date, January 1, 2006, has long passed, so the six-month window is the one that matters now.

The program must be written, approved by senior management, and available to FinCEN on request (31 CFR 1027.210(a)(1)). It must include four parts (31 CFR 1027.210(b)):

Policies, procedures and internal controls based on a risk assessment (31 CFR 1027.210(b)(1)). See our risk assessment guide.
A designated compliance officer (31 CFR 1027.210(b)(2)).
Ongoing training for the right staff (31 CFR 1027.210(b)(3)).
Independent testing (31 CFR 1027.210(b)(4)). See our independent testing guide.

7. Check again every year

Because the tests look at the prior year, your status can change. FinCEN guidance says a business must re-assess each year whether it meets the dealer definition for the following year (FinCEN dealer FAQ 5(b)–(c)). A simple habit is to total your covered-goods purchases and sales every January, plus your purchases from the public if you're a retailer (recommended practice).

Form 8300 applies either way. Even if you aren't a dealer, any trade or business that receives more than $10,000 in currency in one transaction or related transactions must file Form 8300 (31 CFR 1010.330(a)(1)(i)). See our Form 8300 guide for jewelers.

Also check: state and local rules. Many states and cities have their own rules for precious-metals, secondhand-goods or pawn dealers. Check with your state and local authorities.

8. Quick decision list

Do you buy and sell covered goods (items that get 50% or more of their value from jewels, metals or stones)? If not, the dealer rule doesn't reach you.
Do you sell mainly to the public? If yes, use the retailer test: more than $50,000 bought last year from people other than dealers or retailers.
If you sell mainly to businesses, use the general test: more than $50,000 bought and more than $50,000 sold last year.
Leave out trade-in credits with no funds paid, and pawn transactions if you're a licensed pawnbroker.
Count only the metal and stone value of finished goods.
Over the line? Plan to have a written program in place within six months.
Not sure? Ask your attorney or accountant, and re-check every year.

Coming soon: an AML program you can adopt as your own

FineVault AML will give you a written policy, risk assessment, procedures, red-flag guide, testing checklist and staff training, built around 31 CFR Part 1027. You fill in your details and adopt it. Planned pricing from $49/month, training included.

Join the waitlist

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This guide summarizes federal rules as of the date above. State law and your own facts may add requirements. It isn't legal advice, so talk to a qualified attorney about your situation.