If your wedding ring deal sounds too good to be true, it might just be. Here’s why.

Buying a ring to propose to my then-girlfriend was the single biggest purchase I have ever made.

As I don’t earn big bucks, I turned to the Internet for advice on how much to spend on one and got answers ranging from "three month's salary” to "not more than a thousand", "two hundred dollars", etc.

Despite my cheapskate tendencies, I bit the bullet and decided on a decent budget for the ring, hoping that being more discerning (price and quality-wise) would pay off.

Thankfully, my now-wife said yes when I proposed to her.

Recently, I discovered another unexpected benefit of going to a fairly recognised dealer to get my ring - reduced risk of being involved in money laundering activities.

How could buying jewellery support money laundering?

When purchasing jewellery, most of us would be more concerned about its quality rather than whether we are unknowingly facilitating illegal activities.

After all, if the diamond is real and comes at a steal, what’s stopping you from sealing the deal?

However, Elvin Cheong, Senior Assistant Director at the Ministry of Law's (MinLaw) Anti-Money Laundering and Countering the Financing of Terrorism Division (ACD) explained that precious stones, along with precious metals and other luxurious purchases, are just one of the ways that criminals move illicit funds from the proceeds of crimes.

Cheong said that criminals can use large amounts of cash to pay for items like jewellery to conceal the proceeds of crime and convert it to a legitimate source.

And not only that — the items bought could also be used to fund terrorism activities and weapons of mass destruction.

So yes, you could be unwittingly supporting illegal activities if you happen to buy jewellery.

There's also the issue of whether you are able to keep the jewellery you shelled out a sum for.

Cheong warned that if the jewellery you bought is found to be linked to money laundering or other illegal activities, it may be seized and confiscated.

Why a registered dealer then?

Cheong recommended that customers buy gold and jewellery from registered precious stones and precious metals dealers (PSMDs).

These registered dealers aren't just restricted to big-name global brands and include local jewellery chains and smaller shops.

Registered PSMDs in Singapore are supervised and monitored by MinLaw to ensure they abide by the requirements of the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019, also known as the PSPM Act.

Registered PSMDs are also required to file a report for cash transactions above S$20,000.

When there are reasons to suspect money laundering, they have an obligation to file a suspicious transaction report.

Additionally, at the point of the jewellery purchase, registered PSMDs may ask their customers for identifying information and keep a copy of it – as part of due diligence checks.

Such information could include contact details, occupation, source of wealth and source of funds, and will be protected in accordance with the Personal Data Protection Act 2012.

In the event that the customer is unable to furnish the required information, the registered dealer is prohibited by law from completing the transaction.

That said, Cheong acknowledged that money launderers could use tactics to manipulate registered dealers in Singapore.

For example, they may entice any vulnerable PSMD with large cash transactions or offer higher commissions to entice them to forgo checks on the origin of their funds.

What if I buy jewellery from a registered dealer but the item isn't as advertised?

Does MinLaw guarantee the quality of jewellery at registered dealers in Singapore?

Short answer: No.

Cheong said that MinLaw does not review consumer-related matters, such as the quality of the jewellery, as these fall outside the purview of the PSPM Act.

As such, Cheong advised buyers to approach the Consumers Association of Singapore (CASE) or the police if they suspect they have been cheated.

They can also lodge complaints with the Small Claims Tribunal, he added.

Phew

As someone who didn’t know that jewellery could be involved with “dirty money”, I’ve learnt a lot during my ring shopping.

I now know how we can help stop criminals from using the PSMD sector to launder money.

Those looking to buy jewellery for a special someone can check out this list of registered dealers in Singapore.

Just to be extra safe.

This sponsored article by the Ministry of Law changed this writer's view of jewellery as just being a simple piece of bling.

Top image from Canva.