FinCEN recently came out with a Guidance for "Dealers, Including Certain Retailers, of Precious Metals, Precious Stones, or Jewels," on Conducting a Risk Assessment of Their Foreign Suppliers

FIN-2008-G003

We bank a customer who falls under the definition of someone who needs to conduct a Risk Assessment. As their bank, do we need a copy of their AML program?

Do we need to monitor them like an MSB? (make sure they have the four pillars ... etc ...)

I don't plan on doing that...
We are not their regulator.

Based on your risk assessment of a specific customer, it would not be beyond comprehension that as part of your EDD process, you obtained some evidence that they were complying with the requirements. It would be similar to the EDD steps you might take for a high risk MSB.

Page 276 of the examination manual:

"A bank’s due diligence should be commensurate with the level of risk of the NBFI customer identified through its risk assessment. If a bank’s risk assessment indicates potential for a heightened risk of money laundering or terrorist financing, it will be expected to conduct further due diligence in a manner commensurate with the heightened risk."

Dumb question - do scrap metal dealers fall into this group?

I don't believe so.
It covers precious metals.

And that does not mean dealers in metals like copper, even though there's a black market developing in copper pipes and wires that have been ripped out of buildings under construction (and some established buildings).

But if you do detect somehow that you're banking a scrap metal dealer whom you suspect of involvement in receiving stolen property, you should consider SAR filings.