Skip to content

Free max-buy calculator for watch dealers — no signup needed. Open it

Watch Trading ToolkitWatch Trading Toolkit

Covered goods

Covered goods is the term the federal anti-money-laundering rules for dealers in precious metals, precious stones, and jewels use for the items those rules reach.[1]

Whether a watch business has to run an anti-money-laundering programme depends on how much it buys and sells in covered goods in a year, measured under specific valuation rules, and some transactions, such as certain trade-in credits, don't count toward that figure.[1]

The federal guide sets out the threshold and the areas where an attorney's view is worth getting.

Related terms

Read more

Compliance guideFederal rules for watch dealers: cash reporting, AML, and tax

Where this comes up

Pages on this site that use the term.

Learn the trade, not just the word

Plain-English guides to buying, pricing and selling watches as a business. Free, and written to be used at the counter.

Add it if you'd like a call from our team about this or WristBook. We won't text you, and we never share it.

A few emails a month, including a few short follow-ups and WristBook, the dealer software our team makes. Unsubscribe anytime. Privacy

Sources

  1. eCFR 31 CFR 1027.100 (Definitions) - Part 1027; Rules for Dealers in Precious Metals; Precious Stones; or Jewels. (a) COVERED GOODS MEANS (1) jewels; (2) precious metals; (3) precious stones; AND (4) FINISHED GOODS (INCLUDING BUT NOT LIMITED TO JEWELRY; NUMISMATIC ITEMS; AND ANTIQUES) THAT DERIVE 50 PERCENT OR MORE OF THEIR VALUE FROM JEWELS; PRECIOUS METALS; OR PRECIOUS STONES CONTAINED IN OR ATTACHED TO SUCH FINISHED GOODS. (b)(1) DEALER means a person engaged within the United States as a business in the purchase and sale of covered goods who; DURING THE PRIOR CALENDAR OR TAX YEAR; (i) PURCHASED MORE THAN $50;000 IN COVERED GOODS; AND (ii) RECEIVED MORE THAN $50;000 IN GROSS PROCEEDS FROM THE SALE of covered goods - BOTH LIMBS MUST BE MET. (b)(2) DEALER DOES NOT INCLUDE (i) a RETAILER; UNLESS the retailer during the prior calendar or tax year PURCHASED MORE THAN $50;000 IN COVERED GOODS FROM PERSONS OTHER THAN DEALERS OR OTHER RETAILERS (SUCH AS MEMBERS OF THE GENERAL PUBLIC OR FOREIGN SOURCES OF SUPPLY); or (ii) a person licensed as a PAWNBROKER; but only to the extent engaged in pawn transactions. (b)(3) PURCHASE and SALE DO NOT INCLUDE a retail transaction in which the dealer accepts covered goods from a customer; CREDITS THE VALUE TO THE CUSTOMER'S ACCOUNT; AND DOES NOT PROVIDE FUNDS to the customer in exchange - i.e. a pure trade-in against credit. (b)(5) FOR PURPOSES OF APPLYING THE $50;000 THRESHOLDS TO FINISHED GOODS; ONLY THE VALUE OF JEWELS; PRECIOUS METALS; OR PRECIOUS STONES CONTAINED IN; OR ATTACHED TO; SUCH GOODS SHALL BE TAKEN INTO ACCOUNT. (c) JEWEL means an organic substance with gem quality market-recognized beauty; rarity and value; and includes pearl; amber and coral. (d) PRECIOUS METAL MEANS (1) GOLD; IRIDIUM; OSMIUM; PALLADIUM; PLATINUM; RHODIUM; RUTHENIUM OR SILVER; HAVING A LEVEL OF PURITY OF 500 OR MORE PARTS PER THOUSAND; and (2) an alloy containing 500 or more parts per thousand in the aggregate of two or more of those metals. (e) PRECIOUS STONE means a substance with gem quality market-recognized beauty; rarity and value; and includes diamond; corundum (rubies and sapphires); beryl (emeralds and aquamarines); chrysoberyl; spinel; topaz; zircon; tourmaline; garnet; quartz; olivine peridot; tanzanite; jadeite and nephrite jade; spodumene; feldspar; turquoise; lapis lazuli and opal. (f) RETAILER means a person engaged within the United States in the business of SALES PRIMARILY TO THE PUBLIC of covered goods — retrieved 2026-09-23