Jeweller program starter kit: examples of dealing with customers
These examples show how the jeweller program starter kit can work in practice to deal with your customers based on their risk.
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The examples are meant to highlight how the program starter kit can adapt to different money laundering, terrorism financing and proliferation financing risk levels. We refer to these as ML/TF risks.
They’re not intended to be illustrative of real scenarios.
Low-risk customer example
A jeweller accepts a request from a customer to create a custom diamond ring valued at $12,000. The customer asks if they can pay for the ring in cash.
Before completing the transaction, the jeweller completes initial customer due diligence (CDD) on the buyer using the:
- Initial CDD policy in the Policy document
- Onboarding form – individual or sole trader
- Initial customer due diligence form – individual or sole trader.
The jeweller asks the customer the reason for the purchase and the customer advises that they’re purchasing it as an engagement ring.
Ask the customer to complete the onboarding form and provide their identification documents
The jeweller asks the customer to complete the Onboarding form – individual or sole trader.
The buyer completes the onboarding form and provides the following information:
- their name, date of birth, residential address, country of residence and occupation
- the reason for buying the diamond ring is an engagement ring
- the funds for the purchase were previously held in their bank account
- they’re not a politically exposed person (PEP)
- they’re going to provide their driver's licence to confirm their identity.
Complete the initial customer due diligence form
The jeweller uses the Initial customer due diligence form – individual or sole trader to assess the risk of the customer, verify the information provided in their onboarding form, and record the checks they complete.
When completing the initial customer risk assessment, the jeweller doesn’t identify any medium or high-risk factors. They rate the customer’s ML/TF risk as low.
The jeweller then verifies the name and date of birth of the buyer, and that they are who they claim to be. They do this by checking the driver's licence details against their appearance and the details in the onboarding form. They record that the documents appear valid and there are no discrepancies between the information provided and their identity documents.
The jeweller then verifies that the buyer isn’t a politically exposed person (PEP) or subject to sanctions using the:
- Sanctions check process
- Politically exposed persons check process.
The jeweller records these findings in the Initial customer due diligence form.
The jeweller then completes the final onboarding checks in the form, validating they’ve completed all steps required for onboarding.
The jeweller checks the Escalation checklist and confirms that no triggers in this checklist are present, and there are no triggers to escalate the transaction to the AML/CTF compliance officer. A final ML/TF risk rating of low is assigned to the customer.
Once the transaction is completed, the business relationship concludes. No further ongoing CDD or monitoring of the customer is needed.
Medium-risk customer example
An individual approaches a jeweller wanting to purchase a custom bracelet and watch valued at $15,000. Both the bracelet and watch include precious stones. The customer asks to use cash for the purchase.
The jeweller completes initial CDD on the buyer before completing the purchase using:
- Initial CDD policy in the Policy document
- Onboarding form – individual or sole trader
- Initial customer due diligence form – individual or sole trader.
The jeweller asks the individual if they’re buying the products for themselves. The individual states that they’re acting as a representative of their employer (a sole trader) who is the customer and will be purchasing the products.
Ask the customer to complete the onboarding form and provide their identification documents
The jeweller asks the individual to complete the Onboarding form – individual or sole trader and provide information about the customer they’re representing.
The individual completes the form on behalf of their employer and provides the following information about themselves and the customer:
- both the individual and their employer’s name, date of birth, residential address, country of residence and occupation
- the employer wants to purchase precious products worth more than $10,000 in cash
- the employer will be making the purchase using funds that were previously held in their bank account
- the employer won’t be using a company or trust to purchase the precious products
- the employer is the parent of a state Member of Parliament (MP)
- the individual has documentation showing that they have the authority to act on behalf of the customer
- the individual isn’t a reporting entity enrolled with AUSTRAC
- the individual isn’t a politically exposed person (PEP)
- both the individual and the employer will provide Australian driver's licences and Medicare cards to verify their identities.
Complete the initial customer due diligence form
The jeweller uses the Initial customer due diligence form – individual or sole trader to assess the risk of the customer and complete the necessary checks. The jeweller identifies that the customer is a domestic PEP and is using a third-party agent to make the purchase.
As there are 2 medium ML/TF risk factors, the jeweller rates the customer’s ML/TF risk as medium.
When completing initial CDD and verifying the identity of the individual and their employer (the customer) the jeweller:
- documents all required information from the identification documents of both the customer and the individual representing the customer
- confirms both identities by comparing the photo in the identification document against the individual
- has no concerns about the validity of the documents or information provided at onboarding by the customer representative.
Conduct a PEP and sanctions check
The jeweller uses the Sanctions check process to complete a sanctions check. The jeweller documents all required details and confirms that the individual and their employer aren’t subject to sanctions.
The jeweller then uses the Politically exposed persons check process to complete PEP checks, and documents that the:
- representative isn't a PEP
- customer is a family member of a domestic PEP.
The jeweller reviews the Escalation triggers and actions process and determines that there are no:
- triggers to escalate the matter to the AML/CTF compliance officer
- circumstances that have changed the initial risk rating.
The jeweller proceeds with the transaction. Once the transaction is completed, the business relationship concludes. No further ongoing CDD or monitoring of the customer is required.
High-risk customer example
A jeweller is approached by an individual wanting to purchase 100-point loose diamonds using $50,000 in cash.
The jeweller completes initial CDD on the buyer before completing the purchase using the:
- Initial CDD policy in the Policy document
- Onboarding form – individual or sole trader
- Initial customer due diligence form – individual or sole trader.
The jeweller asks the individual if they’re buying the diamonds for themselves or another person. The individual confirms they’re purchasing the diamonds for themselves.
Ask the customer to complete the onboarding form and provide their identification documents
The jeweller has the customer fill out the Onboarding form – individuals or sole trader.
The customer provides the following information:
- their name, date of birth, residential address, country of residence and occupation
- that they want to purchase precious stones valued at more than $10,000 using cash (physical currency, specifically bank notes)
- they’ll be purchasing the diamonds in their own name
- they’re not a politically exposed person (PEP)
- they’ll provide an Australian driver’s licence to prove their identity.
Complete the initial customer due diligence form
The jeweller uses the Initial customer due diligence form – individual or sole trader to assess the risk of the customer. The jeweller notes that the customer is:
- completing a cash transaction valued at $50,000 or higher
- purchasing precious stones that will effectively retain their value, are easy to transport and don’t need significant labour to improve before on-selling.
The jeweller follows the guide in the form and rates the customer as a high ML/TF risk. The customer needs to be escalated to the AML/CTF compliance officer.
Escalate the customer to the AML/CTF compliance officer
The jeweller completes the Escalation form and provides all the necessary information to the AML/CTF compliance officer.
The AML/CTF compliance officer uses the Enhanced CDD form and Initial customer due diligence form – individual to conduct enhanced CDD and verify the identity of the customer. The compliance officer:
- documents all required information from the identification documents of the customer
- confirms the customer’s identity by comparing the photo in the identification document against the individual
- has no concerns about the validity of the documents or information provided at onboarding by the customer
- confirms that the information provided by the customer about why they were requesting the services was truthful.
AML/CTF compliance officer does further checks
The AML/CTF compliance officer contacts the customer to complete further checks. The compliance officer completes a source of funds and a source of wealth check, using the Source of funds and source of wealth check process.
The customer explains that the source of funds for the transaction is from share dividends, and their main sources of wealth are their salary and share dividends. The compliance officer asks the customer to provide documentary evidence including payslips and dividend statements.
The customer provides payslips, which the compliance officer reviews. The customer has a low income, and their salary doesn’t support the ability to make such a large purchase in cash.
When the compliance officer follows up to request the dividend statements, the customer makes excuses that they lost them, and they can’t get them easily. The customer asks if the jeweller can just accept what they’re saying. The compliance officer also completes open-source background checks, including adverse media searches. These searches don’t show any adverse results.
Results of the checks
The AML/CTF compliance officer decides that there are reasonable grounds for a suspicion, based on the:
- requested transaction
- customer’s income that doesn't support the purchase
- fact that the customer couldn’t substantiate most of their wealth.
The AML/CTF compliance officer submits a suspicious matter report to AUSTRAC using their analysis and the information provided by the customer.
In addition, due to the customer’s high ML/TF risk rating, the AML/CTF compliance officer seeks written approval from a senior manager to continue or end the transaction.
The senior manager advises that the matter falls outside the business’s risk appetite and to reject the transaction. The sales representative advises the customer that the refusal is because the value of the cash transaction is outside of their accepted limits.
The business advises the customer that if they wish to proceed with the transaction in cash, they can deposit the funds into a bank account and pay using a bank transfer or EFTPOS.
Related pages
The program starter kits are intended to be used as a complete package and have been designed for use by those reporting entities who satisfy certain suitability criteria. That suitability criteria is set out in the ‘Getting Started’ web page under the heading “Who the starter kit is for” in each program starter kit. In particular, those Tranche 2 entities who, from 1 July 2026, are for the first time subject to anti-money laundering and counter-terrorism financing legislation (AML/CTF).
The program starter kits have been designed for the purpose of providing practical guidance to those reporting entities to assist them to build their own AML/CTF programs. The program starter kits represent AUSTRAC’s interpretation and application of the law to the eligible reporting entities only and are not intended to represent an interpretation and application of the law in all circumstances. The program starter kits are not a substitute for legal advice about any reporting entity’s AML/CTF compliance obligations. Australian courts are ultimately responsible for interpreting the AML/CTF legislation and determining if any provision of these laws are contravened.
This guidance sets out how we interpret the Act, along with associated Rules and regulations. Australian courts are ultimately responsible for interpreting these laws and determining if any provisions of these laws are contravened.
The examples and scenarios in this guidance are meant to help explain our interpretation of these laws. They’re not exhaustive or meant to cover every possible scenario.
This guidance provides general information and isn't a substitute for legal advice. This guidance avoids legal language wherever possible and it might include generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.