Thursday, October 9, 2014

New Reporting Regime for Precious Stones and Metals Dealers in Singapore

Singapore has announced a cash transaction reporting regime for Precious Stones and Metals Dealers ('PSMDs') with effect from 15 October 2014.

Precious stones and metals are highly valuable items which can be easily traded and in turn, easily exploited by criminals. There are several cases in which funds obtained from illegal activity has been used to buy precious commodities which are then subsequently converted back to cash. The precious commodities could also be used directly to support criminal activities.

The new regime will help to reduce the risk of money laundering and terrorism financing associated with transactions involving such precious commodities. The requirement for PSMDs to report large cash transactions will reduce such risks and facilitate the detection, investigation, and prosecution of money laundering, terrorism financing and other serious crimes. The new reporting regime is also aligned with the international standards set by the Financial Action Task Force ('FATF').

PSMDs will now have to: 
  • file a cash transaction report ('CTR') with the Suspicious Transaction Reporting Office of the Commercial Affairs Department ('CAD') within 15 business days when they conduct any cash transaction exceeding SGD 20,000, or its equivalent in foreign currency, which involves precious stones, metals or products;
  • determine the identity of the customer and inquire if the customer was acting on behalf of a third party and if so, determine the identity of the third party who owns the cash;
  • record the details of each cash transaction and maintain such records for a period of five years from the date of submission of the CTR; and
  • put in place internal controls to prevent the financing of terrorism and proliferation.
PSMDs that fail to comply with the new cash transaction reporting requirement will be fined up to SGD 20,000 and/or imprisonment for a term of up to two years. 

More information can be found on the CAD website.

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