Government is considering new laws to deter criminals from selling stolen goods at cash-for-gold stores.

Possible regulations include making it mandatory for cash-for-gold stores to be licensed and for store operators to keep detailed records of any customers and the items they sell and pay customers by cheque rather than cash.

The Royal Gazette has reported a number of cases where thieves had been able to transfer stolen valuables into hard cash in recent months.

And last year one cash-for-gold operator called for tougher regulations to make it harder for thieves to abuse the service. Bermuda Gold Exchange manager James Gilbert said the company lost $45,000 in 18 months because gold it had purchased was later confiscated by police and/or returned to its rightful owners.

Announcing the proposal in the House of Assembly this morning, National Security Minister Michael Dunkley said Government was considering a “light touch manner of regulation” for the trade.

“Honourable Members will also recall a recent publicised criminal case in which a defendant had stolen jewellery from his family, traded it for cash and managed to do so in an incredibly short period of time to the prejudice of his victim to whom the gold was not unwanted but highly valued,” Mr Dunkley said.

“Gold Standard Bermuda and the BPS considered this occurrence to be a “one-off” on the basis that the deposit of the gold by the defendant coincided with a weekend and the gold was incorporated into a prepared shipment destined for melting and that the normal waiting time for such a process was not applied. However, this case demonstrates to some, the argument for the introduction of regulation of this trade.”

Mr Dunkley said that a number of jurisdictions had “wrestled with the growing cash-for-gold trade” including Barbados where tourists had become the target of thieves.

“Among the remedies proposed by the Barbados Legislature is the requirement for legitimate dealers to pay for gold received by cheque and to have records kept of the sellers’ passport or national identification,” Mr Dunkley said.

“Elsewhere, Mr. Speaker, in a June 2012 Report, the Irish Department of Justice and Equality considered the cash for gold trade and recommended the suspicious transaction reporting regime applicable under their money laundering legislation be extended to cash for gold outlets.

“Additionally, the Report observed that controls could relate to the identification of the seller, information on the source of the valuable and its identification, a requirement to retain the item at the outlet, a requirement to record the transaction and to provide access to items and records as required by law enforcement.

“We have consulted with the Bermuda Police Service and the emerging consensus is for a “light touch” manner of regulation for the cash for gold trade. Legislation might most usefully focus on licensing these kinds of businesses, ensuring the proper recording of a seller’s details, including the use of a photo log of the items deposited for trade and a mandated waiting period before the actual disposal of the gold.

“There is also some merit in the Barbados approach of requiring payment by cheque for traded gold as opposed to instant cash.

“The Ministry will consult with those engaged in this trade presently and I expect that in the next session we will see some form of legislation in this area. This is an instance where the introduction of some form of regulation will provide a safety net for consumers, assist in any enforcement action taken by the Police and enhance the reputation of the entrepreneurs who strive to run honest businesses in this community.”