FICA Regulatory Compliance Returns for High Value Goods Dealers are due on 31 July 2026. In this article we provide you with a practical guide on how to successfully complete and submit yours.
The Importance of the Risk and Compliance Return
The introduction of Directive 11 by the Financial Intelligence Centre (FIC) represents a significant development for jewellers as accountable institutions. For many jewellery businesses, the requirement to complete the Risk and Compliance Return (RCR) is one of the first truly structured reporting obligations they have encountered within the anti-money laundering and counter-financial crime environment.
At first glance, the RCR appears relatively straightforward. Most questions require either a “yes” or “no” response, while others rely on broad percentage ranges. However, the real challenge is not understanding what the questions are asking, but rather determining how to answer them in a way that accurately reflects the reality of the business and can be justified if questioned later.
The RCR is not designed as a technical compliance examination where institutions are expected to produce perfect or risk-free answers. Instead, it is intended to provide the FIC with a realistic understanding of the risks faced by jewellers, the controls implemented to manage those risks, and the overall maturity of the institution’s compliance framework.
The Regulatory Purpose Behind the RCR
The RCR forms part of the FIC’s broader risk-based supervisory framework. It assists in assessing exposure to money laundering, terrorist financing, and proliferation financing risks, and informs supervisory oversight.
Importantly, this means the objective of the RCR is not to demonstrate the absence of risk. Rather, it is to demonstrate that the risks are understood and managed appropriately. Jewellers should therefore provide answers that are realistic and defensible, even where those answers may highlight areas where controls are still developing.
Applying Reasonable Estimates to Percentage Responses
Many jewellers may not maintain detailed metrics for categories such as foreign clients, online transactions, third-party payments, or other compliance-related indicators. The RCR accommodates this by using broad percentage ranges (e.g. 0-10%, 10-20%, 20-100%). This indicates that precise calculations are not required.
Instead, businesses are expected to apply reasonable estimation methods based on the data available to them and their understanding of how the business operates. Sales records, transaction histories, point-of-sale trends, and general customer profiles can all assist in forming a reasonable view.
The key consideration is consistency. Similar questions should be approached using similar reasoning and assumptions.
Assessing Risk Exposure in Yes/No Questions
One of the most common areas of confusion is the tendency to interpret yes/no questions in terms of frequency rather than exposure. Many businesses assume that answering “yes” requires a particular activity to occur regularly or frequently. In reality, the purpose of these questions is usually to determine whether a particular risk exists within their business at all.
For example, a jeweller that occasionally deals with foreign clients, accepts third-party payments, or facilitates high-value once-off purchases may still have exposure to these risks, even if such transactions are not frequent. The focus should therefore remain on whether the risk exists within the business.
Reflecting Different Compliance States Across Reporting Periods
Institutions are required to report separately on the following periods:
- 1 July 2023 to 31 March 2024
- 1 April 2024 to 31 March 2025
- 1 April 2025 to 31 March 2026
Each reporting period must reflect what was actually in place during that specific timeframe. Jewellers should avoid applying current compliance measures retrospectively to earlier periods. Differences between reporting periods often demonstrate progression and improving compliance maturity.
Using the Sample Questionnaire as a Working Document
One of the most practical steps jewellers can take before starting the online submission process is to first work through the sample questionnaire made available by the FIC. The sample template mirrors the structure of the online RCR and allows institutions to gather information, consider difficult questions, and identify potential gaps before attempting the live submission.
This preparation stage is particularly important because the online RCR submission process requires all questions on a particular page to be completed before the system will allow the user to proceed further.
A Risk-Based Approach to Supplier Due Diligence
Supplier due diligence and supply chain questions are aimed at assessing whether jewellers understand who they are dealing with and have taken reasonable steps to verify suppliers linked to their core business activities. This may include suppliers of precious metals, gemstones, diamonds, and resale stock, as well as sourcing intermediaries.
The expectation is not to conduct extensive forensic investigations into every supplier relationship. Rather, the focus is on proportionate and risk-based due diligence.
Interpreting Technical Concepts in Context
Certain technical concepts within the RCR should be interpreted proportionately:
- Third-party recordkeeping generally refers to physical records managed by external providers and would not typically include cloud storage systems such as Google Drive
- Online transactions are generally intended to capture fully digital transactions where the entire process occurs online, rather than situations where clients communicate electronically but complete payment and collection in-store
For jewellers, this distinction is particularly important where clients may browse or communicate via platforms such as WhatsApp or social media, but complete payment and collection in-store. These would typically not be treated as fully online transactions.
Legal Entity Structure and Reporting Obligations
Where multiple branches operate under a single legal entity, a single RCR may generally be submitted, provided the information from all branches is consolidated. However, where businesses operate as separate authorised institutions, each may be required to submit its own RCR.
Managing the Submission Process
The submission process takes place online via the FIC’s website and may only be undertaken by authorised individuals, such as the FICA compliance officer. Institutions should ensure that copies of completed submissions are downloaded and retained as part of their compliance records.
Where institutions have relied on estimates or judgement calls, it is advisable to retain brief internal notes explaining how those conclusions were reached.
Using the RCR to Strengthen Compliance Maturity
The RCR provides jewellers with an opportunity to better understand their own operational risks, assess existing controls and identify areas for improvement. Institutions that approach the RCR thoughtfully and honestly are often in a far stronger position than those attempting to produce overly polished or artificially low-risk responses.
Obtaining Practical Support
Given the level of interpretation and judgement involved in completing the RCR, many jewellers may benefit from practical guidance. Moonstone Compliance works closely with jewellers and other high-value goods businesses to assist with interpreting RCR requirements and supporting businesses through the completion and submission process.
For guidance in completing your RCR, contact Moonstone Compliance:
Source: Moonstone Compliance and Risk Management