Anti-Money Laundering / Countering the Financing of Terrorism Division
The Ministry of Law will put in place a new anti-money laundering and countering the financing of terrorism (“AML/CFT”) regulatory regime for precious stones and precious metals dealers (“PSMDs”) in Singapore.
The PSMD sector is exposed to inherent money-laundering (“ML”) and terrorism financing (“TF”) risks as precious stones and precious metals are good stores of value, easily transported and concealed, and easily convertible to cash.
The new AML/CFT regime will mitigate these ML and TF risks, level up AML/CFT standards and increase trust within the sector.
The Precious Stones and Precious Metals (Prevention of Money
Laundering and Terrorism Financing) Bill (“PSPM (PMLTF) Bill”)
was passed by Parliament on 11 February 2019. The PSPM (PMLTF) Bill is
expected to take effect in the second quarter of 2019.
Regulated dealers are required to register their business with the
Ministry of Law. More information on the registration process will be
provided at a later date. The Ministry of Law will provide further
guidance when the details have been finalised and will conduct
outreach efforts to ensure that regulated dealers are well-placed to
comply with the new regime.
Information on the Regime
Who does the new regime cover?
The regime will cover regulated dealers.
A “regulated dealer” is any person who carries on a business:
(a) of regulated dealing; or
(b) as an intermediary for regulated dealing.
“Regulated dealing” means:
(a) selling, offering for sale, purchasing for the purpose of resale, importing for sale, possessing for sale, or manufacturing any “precious stone”, “precious metal” or “precious product”; or
(b) selling or redeeming any “asset-backed token”.
Regulated dealers include, but are not limited to, jewellers, bullion traders, jewellery wholesalers, jewellery retailers and second-hand goods dealers.
Intermediaries for regulated dealing who are covered under the regime include, but are not limited to, auction houses and trading platforms.
Pawnbrokers are not regulated dealers as they are already subject to AML/CFT measures under the Pawnbrokers Act.
What does the new regime cover?
“Precious stones” include diamonds, sapphires, rubies, emeralds, jade and pearls.
“Precious metals” include gold, silver, platinum, iridium, osmium, palladium, rhodium, ruthenium and alloys with at least 2% in weight of any of the metals stated above.
“Precious products” include any jewellery, watch, apparel, accessory, ornament or other finished product:
(a) that is made up of, contains or has attached to it any precious stone or precious metal or both; and
(b) at least 50% of its value is attributable to the precious stone or precious metal or both.
An “asset-backed token” includes any token, certificate or other instrument that:
(i) is backed by one or more precious stones, precious metals or precious products; and
(ii) entitles the holder to the precious stone, precious metal or precious product, or part of it.
Asset-backed tokens do not include securities or derivative contracts within the meaning of the Securities and Futures Act, or commodity contracts within the meaning of the Commodity Trading Act. Securities contracts, derivative contracts and commodity contracts are not covered under the new regime.
What do regulated dealers have to do?
Under this regime, the requirements that apply to regulated dealers include, but are not limited to, the following:
- Register their business with the Ministry of Law
- Perform customer due diligence for transactions that are prescribed by the PSPM (PMLTF) Bill
- File Suspicious Transaction Reports (STR) with the Suspicious Transaction Reporting Office (STRO) where there is suspicion of ML/TF
- File Cash Transaction Reports (CTR) with STRO for cash transactions exceeding $20,000
- Keep records of the
- transactions that have been prescribed by the PSPM (PMLTF) Bill;
- information obtained from customer due diligence;
- CTRs that have been filed; and
- STRs that have been filed
- Conduct risk assessments to determine the ML/TF risk posed by its customers and transactions
- Put in place internal policies, procedures and controls to mitigate ML/TF risks