Protagonist? My ego is not that big.....at least not any more. lol. Here is another previous article from Coin World that may shed more light on the subject.
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD noWrap>Publication:Coin World; </TD><TD noWrap>Date:<SCRIPT xmlns:ms="urn:schemas-microsoft-com:xslt"> var d = new Date("10/31/2005"); document.write(d.toLocaleString().replace(/([0-9])*[0-9][:,-][0-9][0-9]([:,-][0-9][0-9])*( AM| PM)*/gi,"")); </SCRIPT> Monday, October 31, 2005 ; </TD><TD noWrap>Section:Page 3 News; </TD><TD noWrap>Page:5</TD><TD width="100%"></TD><TD noWrap></TD></TR></TBODY></TABLE>Some dealers face new Patriot Act regulations
Law defines ‘dealers’ and ‘retailers’
By Jeff Starck COIN WORLD Staff
New regulations issued by the Department of the Treasury under the USA Patriot Act will force coin dealers and retailers, and jewelers, to enact additional procedures designed to thwart money laundering, especially by terrorists and for terrorist nations.
The Industry Council on Tangible Assets has been alerting its members about Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) regulations, the interim final ruling of which was announced in August and which go into effect beginning Jan. 1, 2006. "The characteristics of jewels, precious metals and precious stones that make them valuable also make them potentially vulnerable to those seeking to launder money," according to a FinCEN briefing on the regulations.
The regulation will only affect "dealers," or those defined as someone that both buys and sells $50,000 or more of "covered goods" in the previous year. Covered goods are items that derive 50 percent or more of their value or price from the "jewels, precious metals or precious stones contained in or attached to such finished goods," the FinCEN briefing said.
For instance, American Eagle 1-ounce gold bullion coins and common-date U.S. gold coins, such as $5 half eagles, $10 eagles and $20 double eagles, would be covered unless they were sold for more than double their intrinsic value.
According to a FinCEN FAQ document released in August, "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 to small businesses, occasional ‘dealers’ and persons dealing in such items for hobby purposes."
The regulation distinguishes between "dealers" and "retailers."
"FinCEN has defined the term retailer as a person engaged within the U.S. in sales of covered goods, primarily to the public," according to the FinCEN FAQ report. "FinCEN believes that retailers, as defined, do not pose the same level of risk for money laundering as do dealers. Thus, most retailers will not be required to establish anti-money-laundering programs." (Emphasis noted in the original document.) Retailers will not be covered by the regulations as long as they buy their covered goods from U.S.-based dealers and other retailers, the FAQ document states. "Thus, retailers that, for example, purchase excess inventory from other retailers from time to time would still be covered by the retailer exemption," according to the FinCEN FAQ document.
However, if their sales and purchases cross the $50,000 threshold during the prior tax or calendar year "from persons other than the U.S.-based dealers or retailers (such as non-U.S. dealers and members of the general public), and sold more than $50,000 of covered goods," they then would be required to have an anti-money-laundering program to only address purchases from non-U.S. dealers.
Pawnbrokers are also not covered under the regulations.
The $50,000 threshold is calculated by the value of the precious metal in the finished good and not the overall value.
On Oct. 26, 2001, President George W. Bush signed the USA Patriot Act. Section 352 (which became effective April 24, 2002) required businesses as described in the Bank Secrecy Act, which includes "precious metal dealers and jewelers," to establish anti-money-laundering programs. Regulations had to be created for different business sectors before the law could be enforced. The FinCEN regulations have been rolled out, with "money services businesses" and security brokers facing enforcement first.
On behalf of ICTA, Raymond Gregson Jr., a retired Internal Revenue Service Criminal Investigation Division agent, presented a compliance seminar at the Long Beach Coin, Stamp and Collectibles Expo Sept. 21. Gregson is helping ICTA members develop their plans as required under the new regulation.
Compliance components The regulations require four components, the first being the establishment of an AML program of written and implemented policies and procedures, which are enforced by a designated compliance officer within the organization, the second component.
"Different dealers have different policies on what they’ll do," Gregson said, noting that most dealers are already collecting the information required under the regulations. What’s new, Gregson said, is the formal establishment of the AML program, though Gregson noted that, "As soon as the Patriot Act passed, some dealers began implementing their own AML program."
Dealers will be required to keep all sorts of identifying information regarding transactions, like names, addresses and Social Security numbers, though they do have some flexibility with regards to when they keep records, Gregson said.
For instance, one dealer for whom Gregson wrote an AML policy chose to keep information on every transaction above $20. "If that’s what they want, that’s how we write the policies and procedures. It’s not only to protect the business, but to protect other customers," Gregson said.
"If you’re a dealer, absolutely nothing’s going to change for you, other than the written policy, and other than the training," in regards to collecting identification, Gregson said. "Other than that, it’s business as usual."
Dealers will have to consult with lists of terrorists and terrorist nations created by the Office of Financial Control, also through the Treasury Department.
"The majority of coin dealers do not do that right now," Gregson admits.
Gregson said ICTA is working to provide its members with access to a service that checks names against the lists. Banks have similar requirements, and there are programs or services that check the names against the lists. They cost either by the day or by the transaction, and Gregson said he’s not sure what ICTA will chose. "We’re not doing it right now but it’s going to have to be done."
Noncompliance A business owner not complying faces a maximum of $250,000 and five years in prison, Gregson said, though the IRS has latitude in how it assesses the fine. "It all depends on the IRS person going in there. You may not get fined if you get a guy in a good mood," Gregson said. "It’s the same way with an audit. They’ve got to fund their budget just like everyone else. They could fine the hell out of you. If you’re a dealer, do you really want to take that chance? To me it’s a no-brainer."
The regulations don’t modify current law, which forces a dealer to file an IRS Currency Transaction Report (Form 8300) if the dealer receives $10,000 or more in currency in a single transaction or series of transactions in a day.
Dealers can also file a Suspicious Activities Report with FinCEN or contact law enforcement if they regard suspicious financial activity. "If they don’t want to give the information, they probably are not legitimate," Gregson said.
Each year, dealers would have to reassess whether they would be covered under the regulations for the following year based on current activity.
"If you sell $45,000 a year, why not get the program and then you won’t have to worry about how much you sold the year before. You could sell $1 million and you’re covered," Gregson said. "You have everything done once and you’re done forever, unless the law is changed."
The rules have not been finalized. Fin-CEN may decide to remove silver from classification as a precious metal, and it may redefine the percentage of value, which is used to determine whether an item is a covered good. Other issues that may change regard jewelers.
Gregson is offering ICTA members a reduced rate to create a custom anti-money-laundering plan to ensure compliance. Prices vary, though a basic plan costs $600, half what it normally would. Gregson will also create compliance programs for non-ICTA members at full price, and ICTA notes, "You may also have your accountant, attorney or other qualified person write your plan."
ICTA will host Gregson for a seminar at the Florida United Numismatists show in Orlando, probably from 11 a.m. to 1 p.m. Jan. 4, prior to dealer set-up.
For more information about the regulations, visit www.fincen.gov (http://www.fincen.gov) or telephone the network’s help line at (800) 949-2732.
Telephone ICTA at (410) 626-7005 or visit its Web site at www.ictaonline.org (http://www.ictaonline.org).
Gregson may be contacted at his business, National Association for Compliance and Security Inc., at (504) 737-1375, or by e-mail at nacs_aml@cox.net.
<SUP>CW </SUP>
http://online.amospublishing.com/Repository/getimage.dll?path=CoW/2005/10/31/5/Img/Pc0050400.jpg
ITEMS COVERED under the Patriot Act regulations include bullion coins such as the American Eagle gold coin. Bullion items that sell for less than double their intrinsic value include common 1-ounce gold coins like that shown.
:confused:
$20.00 or $2,999.99. I guess it's a judgement call. Not very precise is it? Dare I say vague. It would either be very easy or very difficult to make it stand up in court. But with 5 years in the Federal Pen and a 1/4 million $ on the line who wants to be the first to find out? They certainly aren't giving legitimate business owners much time to prepair. Especially when they don't even seem to know what they are asking for. Perhaps they are still testing the waters? Waiting to see just how far they can go with it with out causing too much controversey. I guess we will all find out soon enough.