Gino DeVuono, VP of Specialty Watch Resource, said the numbers are worrisome, although he says brands that serve a niche market are performing better than others.
“The big companies who have had pretty good years [up until now] are experiencing a bit of catch up,” explained DeVuono, whose company is also exhibiting at CJExpos‒Edmonton. “They were in a sense of a false economy in terms of what was happening in the United States and China. That really affected their business. But there’s always a marketplace for a business that serves niche clientele. Am I panicking at this point in time? No.”
No doubt, some jewellers are selling high-end watches and jewellery, and depending on whether they meet certain thresholds, are required to report those transactions to Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), the country’s financial intelligence unit.
Amber Scott, founder of Outlier Solutions, an anti-money laundering consulting firm, said four jewellers have now been charged for failing to have a compliance regime, two of which are publicly named on FINTRAC’s website. The unit is also now starting to ask jewellers to verify they have conducted an internal two-year audit to ensure all the elements of a compliance program are in place.
“If you haven’t done one, get it done,” Scott said. “At this point, there’s no excuse not to do the two-year audit and it’s something jewellers should be aware FINTRAC is asking for.”
Overall, the Canadian jewellery industry appears to be doing better in establishing a compliance regime, she added.
“People who get in touch with me want to be compliant. I see far fewer people who are calling me to say they have nothing in place. Instead, I get a lot more calls asking that what they have in place is enough or to verify whether anything has changed. I think compliance is definitely improving as an industry, but on occasion, I still see people who do not have a compliance regime and that’s a dangerous place to be. FINTRAC isn’t charging people for not reporting a large cash transaction or a suspicious transaction. It’s charging for not having a compliance program in place. Not having your documentation ready to present in and of itself can result in a penalty. Even if you’ve never had a large cash transaction, you still need a compliance regime.”
The holiday shopping season can be a make-it-or-break-it time of the year for most jewellers. For ideas on what consumers might be hoping to find in their stockings, check out our annual holiday gift guide.
