google-site-verification=L-G-JKE4PNjRPYKmr59XkItnFsCcZRkcA5eRo6clw8M The Precious Stones and Precious Metals Money Laundering

Bullion Regulation

Bullion Regulation

Regulatory Regime for Precious Stones and Precious Metals Dealers

The Precious Stones and Precious Metals Money Laundering and Terrorism Financing Prevention Act 2019 (Anti-Money Laundering and Counterfeiting Act) will take effect on April 10th, 2019 in response to recent money laundering and terrorist financing activities within the precious stones and gems industry. This legislation establishes new anti-money laundering (AML) and counter-terrorism financing (CFT) requirements for Singapore’s precious stones and precious metals traders.

What is money laundering and terrorism financing?

Money laundering is the act of obscuring a true origin of illicit funds and making them appear legitimate terrorism financing is the act of soliciting collecting or providing funds from both legit and illicit sources with the intention of supporting terrorist activities or organizations.

What are precious stones precious metals or precious products (PSPMs)?

Money Laundering and Terrorism Financing Risks in the Precious metal stones and precious metal dealers sector

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 weights of any metals stated above post op precious products are any finished product that derives 50% or more of its value from any precious stone or precious metal or both.

What is the PSMD sector exposed to money laundering and terrorist financing?

PSPMS are good stores of value, easily transported and concealed, and easily converted to cash. Criminals may purchase PSPM’s to hide the illicit sources or purpose of their funds this exposes dealer to ML/TF risks.

How will the new regulatory regime help?

The new regime will build on existing measures to help regulated dealers identify potential instances of ML/TF and take appropriate action.

Which dealers are covered under the regime?

Regulated dealers include jewellers bullion traders jewelry wholesalers jewelry retailers second hand good dealers and auctioneers. *

*Regulated dealing includes: (a) manufacturing selling offering for sale importing for sale, possessing for sale or purchasing the purpose of resell any PSPMs; (b) selling and redeeming any token, certificate or other instrument backed by one or more PSPMs that entitles the holder to the PSPMs or part of it; (c) acting as an intermediary for (a) or (b). Pawnbrokers are excluded, as they are subject to anti money laundering and countering the financial terrorism regulations under the pawnbrokers act.

The regime covers 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”.

Examples

Regulated dealers include, but are not limited to, jewellers, bullion traders, jewellery wholesalers, jewellery retailers and secondhand goods dealers. The regime also applies to regulated dealers who are based overseas but carry on a business of regulated dealing in Singapore.

Intermediaries for regulated dealing who are covered under the regime include, but are not limited to, auction houses and trading platforms.

Importantly, the regime does not intend to cover individuals who make one-off purchases and subsequently decide to sell their items to a secondhand goods dealer. Further, pawnbrokers are not regulated dealers as they are already subject to AML/CFT measures under the Pawnbrokers Act 2015.

What does the regime cover?

“Precious stones” (natural or otherwise) include diamonds, sapphires, rubies, emeralds, jade (including nephrite and jadeite), 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, but are not limited to, any jewellery, watch, apparel, accessory, ornament or other finished product:
(a) made up of, containing or having attached to it, any precious stone or precious metal or both; and
(b) at least 50% of its value which is attributable to the precious stone or precious metal or both.
(c) determined by the ratio of the market value of the precious stone and precious metal component to the selling price of the product.

An “asset-backed token” is any token, certificate or instrument:
(i) backed by one or more “precious stone”, “precious metal” or “precious product”; and
(ii) that entitles the holder to the “precious stone”, “precious metal” or “precious product” or part of it (e.g. certificates or tokens).

Asset-backed tokens do not include securities or derivatives contracts within the meanings of the Securities and Futures Act (Cap. 289), and commodity contracts within the meaning of the Commodity Trading Act (Cap. 48A). Securities contracts, derivatives contracts and commodity contracts are not covered under the regime.

Please click here to find out more about the roles and expectations of a regulated dealer.

Exemptions

The following persons are exempted from registration under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 (“PSPM Act”):

  • A pawnbroker as defined under Section 3 of the Pawnbrokers Act 2015.
  • Any person licensed, approved, registered or regulated by the Monetary Authority of Singapore under any written law.
  • A “foreign dealer” which only carries on business in Singapore for not more than a total of 90 days in a year.

Foreign dealers should refer below to find out more about their compliance requirements under the PSPM Act.

Regulatory Compliance for Foreign Dealers

Who are foreign dealers?

Foreign dealer means a regulated dealer that –
(a) is –
(i) registered or incorporated outside Singapore, in the case of a body corporate or unincorporate; or
(ii) habitually resident outside Singapore, in the case of an individual; and

(b) does not have a permanent establishment, a place of management or a branch in Singapore at which the regulated dealer carries on the business of regulated dealing or business as an intermediary for regulated dealing.

What are the regulatory compliance requirements for foreign dealers?

Foreign dealers are subject to all other transaction-based requirements under the PSPM Act, which include conducting customer due diligence (“CDD”), keeping records, and filing of Cash Transaction Reports (“CTR”) and Suspicious Transaction Reports (“STR”).

Do foreign dealers need to register?

A foreign dealer carrying on a business of regulated dealing, or business as an intermediary for regulated dealing, in Singapore on a transitory basis is exempt from registration. Transitory basis means the foreign dealer carries on business in Singapore for not more than a total of 90 days in a year.

Any person who acts or holds out to be a regulated dealer without being registered or exempted, may face criminal penalties of up to S$75,000 in fine and/or up to 3 years’ imprisonment.

Our Role in AML/CFT

Singapore is a member of the Financial Action Task Force (“FATF”), an inter-governmental body that sets international standards aimed to prevent money laundering and terrorism financing (“ML/TF”), and the harm these illegal activities cause to society. There are currently more than 200 countries and jurisdictions committed to implementing anti-money laundering/countering the financing of terrorism (“AML/CFT”) measures in accordance to the recommendations set by the FATF.

Designated non-financial businesses and professions (“DNFBP”) in Singapore, such as the precious stones and precious metals dealers (“PSMD”), have a role to play to ensure that Singapore is effective in implementing its AML/CFT policies through the PSMD sector. The regulatory requirements on the PSMD sector are set out in the PSPM Act and the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Regulations 2020 (“PMLTF Regulations”). Regulated dealers should also refer to the Guidelines for Regulated Dealers.

Please refer to the compliance requirements for more information on how to implement an effective AML/CFT framework for your business.

Registration

It is an offence if you act or hold out to be a regulated dealer without being registered or exempted. You must be registered before you commence any regulated dealing.

Enforcement actions will be conducted to detect unregistered dealers. Any person who acts as or holds out to be a regulated dealer without being registered or exempted, may face criminal penalties of up to S$75,000 in fine and/or up to 3 years’ imprisonment.

Who is Required to Register?

You are required to register with the Registrar of Regulated Dealers if you are a regulated dealer i.e. you carry on a business of regulated dealing in precious stones, precious metals and/or precious products (“PSPM”), or as an intermediary for regulated dealing in PSPMs.

Examples of regulated dealers who are required to register include, but are not limited to jewellers, bullion traders, jewellery wholesalers, jewellery retailers, secondhand goods dealers, auction houses, and trading platforms. Take this questionnaire to help you ascertain whether you are a regulated dealer.

Foreign dealers may refer here on the requirements to register.

Please refer to the PSPM Act for the official definitions. If you are not certain whether you are required to register, you may wish to seek legal advice.

Fees and Registering your Place(s) of Business

Regulated dealers must pay an application fee of S$120 to register with the Registrar. All payment must be made through GoBusiness Licensing Portal.

Registration is on an annual basis. If the Registrar provides in-principle approval for your application, you must pay a registration fee based on the registration tier and the number of outlets operated:

Registration-Tier-Available

Illustration:

Regulated dealer “ABC Pte Ltd” has two places of business:

  1. One flagship jewellery outlet in Marina Bay Sands; and
  2. One jewellery outlet in Bugis.

ABC Pte Ltd applies for a Class B Certificate of Registration.

ABC Pte Ltd must pay a total of S$820:

Type-of-Fee

Registration Application Process

Registration-of-Application-Process

You may submit your application via the GoBusiness Licensing Portal. You may refer to the GoBusiness Licensing Guide for Regulated Dealers for a step-by-step guide to the application process.

Information Needed

Information Needed:

• Ensure that you have the Corppass and UEN of the business entity that the Registration Certificate will be issued to.
• You have updated your business particulars with the Accounting and Corporate Regulatory Authority (“ACRA“) so that the updated information can be auto-populated in the application form.
• There should only be one application per business entity i.e. one application per UEN. You can enter multiple outlets per application.
• It may take around 4 weeks for the Registrar to process an application for registration before granting the registration. It may take longer if additional information is required.

Entity

Information Needed

Director
Partner
Manager
Company secretary
Substantial shareholder (if you represent a company)

1. Name*
2. NRIC/ Passport/ FIN No.*
3. Citizenship or Country/ Region of Incorporation*
4. Date of birth
5. Declaration of
(a) Any investigations or convictions for offences related to
fraud, dishonesty, money laundering or terrorism financing;
(b) Any bankruptcy, insolvency or liquidation;
(c) Any lawsuit the person was a party to; and
(d) Any breach of AML/CFT requirements

* Information is auto-populated for ACRA registered entities

Person holding an analogous position involved in the management of the applicant:

Outlet Manager

 

1. Name
2. NRIC/ Passport/ FIN No.
3. Citizenship or Country/ Region of Incorporation
4. Date of birth
5. Declaration of
(a) Any investigations or convictions for offences related to
fraud, dishonesty, money laundering or terrorism financing;
(b) Any bankruptcy, insolvency or liquidation;
(c) Any lawsuit the person was a party to; and
(d) Any breach of AML/CFT requirements

Compliance officer

1. Name
2. NRIC/ Passport/ FIN No.
3. Citizenship or Country/ Region of Incorporation
4. Date of birth
5. Email address
6. Mobile number

Business Particulars

Information Needed

 

Address

1. Registered address*
2. Operating address
3. Mailing address
4. Outlet address
5. Business telephone number
6. Business fax number
7. Business email address

* Information is auto-populated for ACRA registered entities

Products

Type of precious stones, precious metals and precious products

Activities

Wholesale, manufacturing, retail, etc.

Supporting documents to be attached to the application form:

• For applicants who have directors, partners, managers, company secretary, outlet managers, substantial shareholders who are foreign nationals, you should attach a copy of their foreign photo identification document such as passport.
• For applicants who have corporate shareholders, you should attach a copy of your shareholders’ registration information
(including particulars of directors, partners, managers, company secretary, outlet managers, substantial shareholders).
• For applicants who have more than one layer of corporate shareholders, you should attach your organisation structure/ chart
up till the individuals who own the group. For listed corporate shareholders, you do not have to provide the name of all your shareholders. You should still provide a list of those who hold more than 5% shares of the listed company.

Cancellation of Registration

If you do not wish to continue operating as a registered dealer (i.e. you are neither carrying on the business of regulated dealing nor business as an intermediary for regulated dealing), submit a cancellation application via the GoBusiness Licensing Portal. Fees are not payable for cancellation application.