Singapore’s Trade Security

To achieve a secure supply chain, it is important to keep illicit trade at bay.

Singapore Customs works closely with local enforcement agencies and international counterparts to enforce against different forms of illicit trade, which include:

• Duty and tax evasion
• Intellectual Property Rights infringement
• Smuggling of wildlife and their parts and derivatives protected under the Convention on International Trade in Endangered Species of Wild Fauna or Flora (CITES)
• Money-laundering and terrorism-financing
• Violation of the United Nations Security Council (UNSC) sanctions

In countering illicit trade, a whole-of-government and layered approach is adopted:

Free Trade Zones

Singapore’s Free Trade Zones (FTZ) play a critical role in building Singapore’s position as a trading hub. To maintain the competitiveness of our FTZ, we need to ensure that they remain secure.

A robust regulatory regime of the FTZ has been put in place to govern the security of our FTZ.

Strict controls and limits are imposed on activities permissible within the FTZ. Transactions and activities within the FTZ must comply with all laws and regulations in Singapore, which empower government authorities to impose controls on the FTZ and undertake enforcement action such as routine checks and operations against illicit trading activities. There are no other exemptions or special treatment for FTZ operators.

Additional Requirements under the Revised FTZ Regime

Singapore Customs has revised the FTZ regime and implemented further measures to enhance the governance of FTZ and combat criminal misuse of the FTZ, effective from 1 March 2024.

As part of the revised FTZ regime, Singapore Customs has introduced a new licensing regime to license entities managing the FTZ as “FTZ Operators”. Specified FTZ cargo handlers are also given explicit responsibilities and requirements by Singapore Customs.

For example, other than the main role of managing an FTZ, the FTZ Operators are also required to support or assist Singapore Customs officers in performing any duty (within the FTZ) under the FTZ Act or other written law, and to implement systems and procedures to monitor and ensure the security of the FTZ.

Another additional requirement under the revised FTZ regime is for shipping agents to submit cargo-related data to specified FTZ Cargo Handlers, and for the FTZ Operators and Cargo Handlers to provide Singapore Customs with conveyance-related and/or cargo-related data (via system-to-system transmission). This will improve Singapore Customs’ and other law enforcement agencies’ visibility of cargoes within the FTZ and enhance risk profiling and targeting of high-risk cargoes, including suspected trade-based money laundering cases.

Enforcement in FTZ

Singapore Customs partners enforcement agencies such as the Singapore Police Force and the Immigration & Checkpoints Authority (ICA) to ensure the security of the FTZ, and has established operating procedures with other law enforcement agencies to act promptly on actionable intelligence on illicit trade.

Singapore Customs also cooperates with its international counterparts to help prevent and combat illicit trade in FTZ. We share information (such as passing information to the next port of call) and respond to requests for information. Such assistance is done bilaterally as well as through regional and international fora such as the Regional Intelligence Liaison Office under the World Customs Organisation (WCO).

Read about some of the regular enforcement operations conducted in the FTZ featured in Singapore Customs’ corporate magazine, inSYNC, here:

• Upholding The Security Of Free Trade Zone (page10)
• Singapore Customs Foils Syndicates’ Attempts To Smuggle Duty-Unpaid Cigarettes Out Of Changi Airfreight Centre (page 5 & 6)

Licensed facilities

Singapore Customs manages a suite of schemes and licences to facilitate traders’ needs, while maintaining security of our supply chain.

The Licensed Warehouse Scheme, Zero-Goods and Services Tax Warehouse Scheme (ZGS) and the Secure Trade Partnership programme provide flexibility to traders conducting specific trading activities within controlled facilities.

This is in line with Singapore Customs’ pro-enterprise regulatory approach.

Visit this page for more information on our schemes and licences.

Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT)

Singapore Customs supports Singapore’s whole-of-system approach to preventing, detecting, and enforcing against Money Laundering (ML), involving close coordination and collaboration amongst Government agencies, public-private partnerships, and international cooperation.

On 20 Jun 2024, Singapore published her updated ML National Risk Assessment as part of Singapore’s continuing efforts to maintain the effectiveness of its Anti-Money Laundering regime amidst our evolving risk landscape.

As part of Singapore Customs’ contributions to Singapore’s AML/CFT regime, Singapore Customs has implemented an enhanced regulatory ZGS to combat money-laundering and terrorism-financing risks. The strengthened measures include mandating the ZGS licensees storing precious stones and metals, works of art, antiques, and watches clad with precious metal casings or precious metals (otherwise known as listed goods) to obtain, maintain, and update information on the identities of both the person with control and the person with beneficial ownership over the listed goods. ZGS licensees are also required to seek permission from Singapore Customs before storing any listed goods and to screen the identities of the person with control and the person with beneficial ownership as part of the Know-Your-Customer requirements. These measures allow Singapore Customs to have greater oversight of the activities happening in these ZGS licensees’ premises.

Regular inspections are conducted on these companies as part of the enhanced regime which serves to prevent companies from being inadvertently used as a conduit for money-laundering and terrorism-financing activities, allowing Singapore to operate as a secure trade hub.

Read more about the inspections and the enhanced regulatory regime in Singapore Customs’ corporate magazine, InSYNC: Enhanced Regulatory Regime To Combat Money Laundering And Terrorist Financing Risks

Suspicious Transaction Report

Under Section 45 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992, all traders, including freight forwarders and declaring agents, have the legal obligation to file a Suspicious Transaction Report (STR) to the Suspicious Transaction Reporting Office (STRO) if they know or have reasonable grounds to suspect that any property is connected to criminal activity, in the course of their trade, profession, business or employment.

Traders also have the duty to provide information on property and financial transactions belonging to terrorist and acts of terrorism-financing under Sections 8 and 10 of the Terrorism (Suppression of Financing) Act 2002 to the Police or to do so via a STR. Failure to do so may constitute a criminal offence.

Traders may refer to the Trade-Based Money Laundering risk indicators to detect suspicious trade activities and file a STR with the STRO.