Hong Kong Customs investigates watch cash deals by an unregistered precious metals dealer
Hong Kong Customs says a local company carried out cash transactions in watches containing precious metals and stones, valued at over HK$120,000, without the Category B registration required under Hong Kong's AML law. An investigation is ongoing.
Hong Kong Customs announced on 9 October 2026 that on 8 October it detected a case involving a local company. According to Customs, the company carried out cash transactions involving watches containing precious metals and stones valued at over HK$120,000, without holding a Category B registration. Customs did not name the company. The release says an investigation is ongoing and does not mention any arrest.
The case falls under the Dealers in Precious Metals and Stones Regulatory Regime, set out in the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615). Under that ordinance, a person who wants to carry on a business of dealing in precious metals and stones, and who engages in transactions totalling HK$120,000 or more, must register with Hong Kong Customs.
Customs said that no person other than a Category B registrant may carry out a cash transaction with a total value at or above HK$120,000. Category B registration is the registration category for dealers who carry out these large cash transactions. According to the release, an offender faces a maximum fine of HK$100,000 and imprisonment for six months.
Customs used the release to remind dealers that they must register before carrying out transactions of HK$120,000 or more.
Why it matters to AML professionals
Dealers in high-value goods such as watches, jewellery and gold are covered by AML rules in many countries because large cash purchases can turn criminal cash into portable assets. AML professionals at banks that serve these dealers should check that the dealer holds the licence or registration its local rules require. A dealer that takes large cash payments without the right registration is a customer risk, not just a licensing issue.
Red flags in this case
- A jewellery, watch or precious metals business deposits large amounts of cash but cannot show the dealer registration its jurisdiction requires.
- Cash purchases of luxury watches or gold sit just at or above a reporting or registration threshold.
- A dealer's account shows cash deposits that do not match the size or turnover the business declared at onboarding.
- Customers buy high-value items with cash and resell them soon after, or ask for the goods to be shipped abroad.
If this landed in your queue
- Confirm whether the dealer is registered with the relevant supervisor, and record the registration number and category in the customer file.
- Compare the dealer's cash deposits with its expected turnover and with the cash thresholds that apply to it.
- Ask the dealer about its own customer checks and record keeping for large cash sales.
- If the dealer is unregistered or the cash activity has no clear explanation, escalate and consider filing a suspicious transaction report.
Key terms
- DPMS
- Dealers in precious metals and stones: businesses such as jewellers and bullion traders that AML laws in many countries cover.
- Category B registrant
- Under Hong Kong's regime, the type of dealer registration that allows cash transactions of HK$120,000 or more.
- Cap. 615
- Hong Kong's Anti-Money Laundering and Counter-Terrorist Financing Ordinance, the main AML law there.
Interview angle
Why do AML laws cover dealers in precious metals and stones?
Explain that high-value, portable goods can be bought with criminal cash and moved or resold easily. Mention cash thresholds, dealer registration and the customer checks dealers must do, and say how a bank would check a dealer customer's registration.
Sources
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