"Like it or not, compliance to official requirements for a clear audit trail of one’s processes is now an integral part of a diamantaire’s business. You could say compliance is the 'Fifth C' of the business", writes Pranay Narvekar, partner at Pharos Beam LLP and an independent consultant to the diamond industry.
Australia is considering tightening its anti-money laundering regulations to include precious stone dealers and real estate agents following a warning from the Financial Action Task Force (FATF) over potential illicit cash entering the country. While strengthened rules would not target any particular country, Australian authorities are reacting "following a surge of cash from wealthy Chinese buyers looking for a safe haven away from the market turmoil of their home markets," Reuters reported.
"De-risking", according to the Financial Action Task Force (FATF), "refers to the phenomenon of financial institutions terminating or restricting business relationships with clients or categories of clients to avoid, rather than manage, risk in line with the FATF’s risk-based approach." The issue, which the FATF wishes to avoid by means of its risk 'management' approach, is that "de-risking may drive financial transactions underground, which creates financial exclusion and reduces transparency, thereby increasing money laundering and terrorist financing risks." Yet the evidence is growing -