Anti-Money-Laundering for Jewelry Stores in Mexico: What to Know
Why selling jewelry and precious metals is a "vulnerable activity", which obligations come with it, and how to keep records so you can comply without the headache.
This article is for information only and does not replace advice from your accountant or lawyer. Amounts and criteria change, so always confirm the current ones on the SAT portal.
In Mexico, the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin (the Anti-Money-Laundering Law, or LFPIORPI) lists certain businesses as "vulnerable activities". Dealing in precious metals, precious stones, jewelry or watches is one of them.
What "vulnerable activity" means
It is a lawful activity that, by its nature, can be used to move money of illegal origin into the financial system. It does not mean your business is under suspicion. It means the law assigns you certain obligations to help prevent that use.
According to the tax authority (SAT), the activity covers habitual or professional trading or brokering of precious metals, precious stones, jewelry or watches. If you sell jewelry as a business, it probably applies to you.
The main obligations
In general terms, the law requires you to:
- Register on the SAT's anti-money-laundering portal.
- Identify your customers when a transaction reaches or exceeds a set amount.
- Keep the information and documents from those transactions for the period the law sets.
- File notices with the SAT when a transaction, or several from the same customer, reach the reporting threshold.
- Follow the cash rules, which limit transactions above certain amounts.
Thresholds are expressed in UMA (a unit of measure that is updated every year). For that reason, check the current UMA value and the thresholds for the metals and jewelry category on the SAT website. Figures found in blogs and news items can be out of date.
Who to identify and what to ask for
When the identification threshold is reached, the data usually required depends on whether the customer is an individual or a company. It generally includes:
- Full name and date of birth.
- Tax ID (RFC) or population ID (CURP), as applicable.
- Address.
- A copy of official ID.
- If acting on behalf of someone else, who the real owner is.
Confirm the exact list in the current rules before you design your form.
Transactions add up
A common mistake is to look at each sale on its own. The law treats several transactions with the same customer in a period as ones that can be aggregated to reach a threshold. You need a history per customer and cannot rely on memory at the counter.
Purchases count too
The rule covers buying as well as selling. If you buy used gold from individuals, you must also be able to show where it came from and from whom. See how to structure that process in how to buy scrap gold without losing money.
How to get organized
- Name one person responsible for compliance.
- Capture customer data in the system at the time of sale, not afterwards.
- Aggregate by customer to see when someone nears a threshold.
- Store receipts in an organized and accessible way.
- Review every month the transactions that came close to a threshold.
- Train your staff so they know what to ask for and when to report.
A system with customer records and sales linked to each one lets you pull up a customer's history in seconds and lowers the risk of omissions.
What happens if you do not comply
The law provides for penalties that can include significant fines and, in serious cases, criminal consequences. That is why professional advice is worth having, and why this should not wait.
Frequently asked questions
Does it apply if I sell very little? It depends on whether your activity is habitual or professional and whether you reach the thresholds. Ask your accountant.
What if I only sell online? The activity is defined by what you sell, not by the channel.
Where do I find the current amounts? On the SAT's anti-money-laundering portal, in the precious metals and jewelry section.
