Are you a High Value Dealer (HVD) or High Risk Dealer (HRD)? Not sure? Why might this matter?
If you run a business that deals in goods over a certain value or goods that are considered ‘high risk’, you will likely be classified as an HVD or HRD. However, do you fully understand what this means, and if not where do you turn for assistance and guidance?
An HVD is a business that accepts cash payments (in any currency) equal to, or greater than 10,000 euros (£8,000) in exchange for goods. HRDs are the following: dealers in precious stones and metals, car and motorbike dealers, marine craft dealers and antique and arts dealers.
Ok, so what?
The Proceeds of Crimes Act 2015 (POCA) and the Terrorism Act 2018 in Gibraltar set out the laws in relation to money laundering and terrorist financing (ML/TF) and are also where an HVD is defined. If a business is therefore “captured” under the above definitions, there are a number of legal obligations that apply. The Office of Fair Trading in Gibraltar is the supervisory authority for HVDs/HRDs and monitors and ensures compliance with these obligations.
Whilst the natural tendency may be to start by drafting and implementing policies to comply with the statutes, it is important for a business to fully understand the risks that it faces. This will ensure that any measures put in place to safeguard against ML/TF are appropriately tailored and effective. A risk assessment is therefore the more appropriate place to start. Questions such as what kinds of goods do I offer, can these be easily resold, do they hold their value, are they highly sought after, are they easily transportable across borders, what type of clientele typically purchases such goods, where are they from, do they purchase in person or online/via a third party, are just some of the questions that could inform a business’s risk assessment.
A risk-based approach underpins the requirements under POCA. A business is expected to have appropriately documented policies and procedures that are scalable dependent on the calculated risk. The assessed risk will determine amongst other