Important Update for High-Value Dealers: FICA Compliance
Dear Valued Clients, We hope this message finds you well. We are writing to inform you of an important development that impacts all high-value dealers within our industry. Recent legislative changes have officially classified the jewellery industry as an accountable institution under the Financial Intelligence Centre Act (FICA). This update aims to increase transparency and combat financial crimes associated with high-value goods. Key Legislative Change On December 19, 2022, a new category was added to the list of accountable institutions in Schedule 1 of FICA, 2001. This is part of an effort to address gaps in South Africa’s anti-money laundering and counter-terrorism financing policies. This law may affect your business operations. Definition of High-Value Goods Dealers (HVGD) According to Item 20 of Schedule 1 to FICA, a HVGD is defined as: “A person who carries on the business of dealing in high-value goods in respect of any transaction where such a business receives payment in any form to the value of R100,000 or more, whether the payment is made in a single operation or in more than one operation that appears to be linked, where ‘high-value goods’ means any item that is valued in that business at R100,000 or more.” This broad definition covers a wide range of trading activities. Based on initial guidance from the Financial Intelligence Centre (FIC), this includes dealers in precious metals, precious stones, diamonds, antiques, collectibles, fine art, boats, aircraft, and luxury motor vehicles valued at R100,000 or more. Obligations for Accountable Institutions As an accountable institution, you must: Directive 7 of 2023 Issued by the FIC on March 31, 2023, Directive 7 mandates all accountable institutions listed under Item 20 (high-value goods dealers) to submit information on their understanding of money laundering and related financial crimes, along with their assessment of compliance with FICA obligations. This is done through a risk and compliance return questionnaire, due by July 31, 2023 (covering the period from January 1, 2023, to June 30, 2023). Submit your return here Note: This return helps the FIC gauge your understanding of FICA and the processes you have in place. Be honest about your current state, even if you have limited knowledge or processes. This transparency allows the FIC to provide necessary training and support. While the deadline has passed, submitting your return now can reduce the risk of penalties. Moving Forward As our industry enters this new era of accountability, we encourage you to view FICA compliance not just as a regulatory requirement but as an opportunity to enhance your business practices and uphold the integrity of our sector. Yours sincerely, Moon Investments Compliance Team
Gold’s Remarkable Surge: What Investors Need to Know
Gold has firmly established itself above the $2,000 mark, setting new records across various currencies. Many are wondering if this impressive rally will continue. Let’s delve into the factors behind this surge and explore what lies ahead for gold investors. Recent Gold Rally The gold price has skyrocketed by $400 in the last four weeks, showing no signs of slowing down. It’s hitting record highs against major currencies, including the Swiss franc, euro, British pound, Japanese yen, Canadian dollar, and Chinese yuan. Is It Too Late to Invest? The short answer is no. Legendary investor Rick Rule advises investing in gold not just because of its current price but due to the potential for it to reach $8,000 or even $10,000. This implies that while you want to benefit from the rise, you also want to protect against adverse economic factors that could drive such high prices. Factors Driving Gold Prices Looking Ahead Despite various challenges, the global economy has performed better than expected, according to the IMF. Yet, this has not prevented gold from reaching all-time highs, indicating the strength of the factors driving its price. Conclusion Given the ongoing political and economic uncertainties, coupled with concerns about equity and bond markets, gold’s status as a safe haven asset remains strong. We expect gold prices to continue climbing, making it a worthwhile consideration for investors looking to safeguard their wealth. For those wondering how to invest in gold, visit our website for guidance on starting your gold investment journey.
The Gold Rush: A Lesson in Smart Investments
In 1848, a 29-year-old Sacramento shop owner named Samuel Brannan was managing his store when two shoppers entered and offered to pay with gold nuggets. Brannan was astonished by the solid gold, which the shoppers claimed was found at Sutter’s Mill, roughly 35 miles northeast of Sacramento. Brannan owned the only shop between San Francisco and Sutter’s Mill, but he also ran a newspaper. Using his paper, he quickly spread the word about the gold discovery. According to legend, Brannan even carried a small vial of gold to show prospective miners and once ran through the streets of San Francisco shouting, “Gold! Gold from the American River!” His newspaper ran stories claiming that with just a shovel, a pick, and a pan, anyone could strike it rich in California. This hype is said to have helped trigger the Gold Rush, attracting 300,000 people to California in 1849, giving rise to the moniker “the San Francisco 49ers.” However, Brannan did not join the rush to dig for gold. Instead, he sold about $5,000 worth of shovels, picks, pans, and other equipment to miners each day at his store, equivalent to nearly $200,000 per day in 2024 dollars. This savvy business strategy made Brannan California’s first millionaire. The Modern Gold Rush: Artificial Intelligence Today, the biggest new gold mine for investors is artificial intelligence (AI). Nvidia is a major player, producing the hardware (GPUs) essential for popular AI applications like ChatGPT. However, beyond hardware, AI has a significant ongoing energy need. For every dollar spent on a GPU (which can easily cost over $40,000 each), companies spend another dollar on energy to run it. AI applications like ChatGPT have two stages: training and querying. Training involves feeding vast amounts of data into the algorithm, which is extremely power-intensive, equivalent to the electricity usage of tens of thousands of homes. The querying phase, where users request tasks (e.g., “Generate an image of a cat playing the harmonica”), also requires substantial energy, about 10 times as much as Google uses for its entire search function. This growing demand puts immense strain on America’s already struggling power grid, further exacerbated by the push for electric vehicles and the reliance on inefficient “green energy” sources like wind and solar. The Energy Solution: Natural Gas Given the power infrastructure challenges, big tech companies are considering building their own power plants to ensure a stable electricity supply for their data centers. The best solution would be small-scale nuclear reactors, but that technology isn’t ready yet. The next best option is natural gas, which is reliable and inexpensive. US natural gas is priced around $2.50 per million BTUs, making it one of the most underpriced commodities in the world. In terms of pure energy, $2.50 natural gas is equivalent to a barrel of oil selling for about $15. This makes US natural gas a highly attractive energy source for new power plants driving the AI boom. Conclusion: Investing in Natural Gas Natural gas presents a significant “picks and shovels” investment opportunity in the AI space. It is the cheapest form of energy available and essential for the power-hungry demands of AI applications. Moreover, the stock prices of many high-quality and profitable natural gas producers are currently very low, offering substantial upside potential. By investing in natural gas, you can position yourself strategically in the AI revolution, much like Samuel Brannan did during the Gold Rush, reaping the benefits of providing the essential tools needed for success.
