The clock is ticking: Is your luxury watch business ready for the new EU anti-money laundering rules?
By understanding the EU's new Anti-Money Laundering Regulation, luxury watch dealers can protect their business by implementing the required customer verification and transaction limits ahead of the 2027 deadline.
The world of luxury watches is one of timeless elegance, precision engineering, and significant investment. However, the very qualities that make these timepieces so desirable – high value, portability, and international appeal – also make them a target for those looking to launder illicit funds.
As a result, luxury watch dealers are now in the regulatory spotlight. The European Union is introducing a comprehensive new Anti-Money Laundering Regulation (AMLR) that will directly impact how you do business. Coming into full effect on July 10, 2027, these new rules are not just an update; they represent a fundamental shift in compliance obligations.
For luxury watch dealers, ignoring these changes is not an option.
Why luxury watch dealers must act now
Under the new AMLR, dealers in high-value goods, including watches valued at over €10,000, will be classified as "obliged entities". This means your business will be held to a similar standard of anti-money laundering and counter-terrorist financing (AML/CFT) diligence as banks and other financial institutions. The aim is to close loopholes that criminals exploit and to create a single, harmonised AML rulebook across the entire EU.
Key changes under the new AMLR
So, what does this mean for your day-to-day operations? Here are the most significant changes:
- An EU-wide cash limit: The AMLR introduces a strict, EU-wide limit of €10,000 for cash transactions. It is important to note that individual EU member states can choose to set an even lower cap.
- Comprehensive Customer Due Diligence (CDD): For any transaction involving a watch worth €10,000 or more, you will be required to conduct thorough Customer Due Diligence. This applies regardless of the payment method, so bank transfers are no longer a way to avoid scrutiny. For cash transactions, this diligence is required from as low as €3,000. You’ll need to identify and verify the identity of your clients and, crucially, the ultimate beneficial owners they may be representing.
- A shift in reporting: The requirement to report will no longer be based on "unusual" transactions. Instead, you must file a report for any activity you "know, suspect, or have reasonable grounds to suspect" is linked to criminal activity. This lowers the threshold for reporting and requires a more proactive and risk-based approach.
- Supplier scrutiny: The new regulations also extend due diligence requirements to your suppliers, adding another layer to your compliance responsibilities.
How to ensure your business is compliant
The 2027 deadline may seem distant, but the time to prepare is now. Waiting until the last minute will create unnecessary risk and business disruption. Here are the steps you should be taking:
- Establish a robust compliance framework: Develop clear internal policies, procedures, and controls that align with the new AMLR.
- Appoint a Compliance Officer: Designate a qualified individual within your business to be responsible for overseeing your AML program.
- Embrace digital solutions: Manual, paper-based checks are no longer sufficient. To meet the new standards for Customer Due Diligence, you need to adopt modern Know Your Customer (KYC) protocols.
Ask us how to onboard new clients while staying compliant – all with Signicat Mint.
To streamline this entire process, consider a no-code solution like Signicat Mint. This allows you to build and automate your secure, compliant onboarding and transaction flows using a simple drag-and-drop interface. You can design the exact Customer Due Diligence and AML checks you need, from identity verification to risk profile analysis, without writing a single line of code. This not only ensures you meet your regulatory obligations under AMLR but also saves significant time and resources, freeing you to focus on your clients.
To learn more about how the upcoming changes will affect your business and how you can prepare, explore our AMLR 2027 Readiness resources.
The clock is ticking on the new era of AML compliance. By taking proactive steps today, you can protect your business, build trust with your clients, and ensure you are ready for the future.