IT & Communications Singapore Client Alert June 2015 For further information please contact: Ken Chia +65 6434 2558 Ken.Chia@bakermckenzie.com Yi Lin Seng +65 6434 2713 YiLin.Seng@bakermckenzie.com Quan Nguyen +65 6434 2592 Quan.Nguyen@bakermckenzie.com Address 8 Marina Boulevard, #05-01 Marina Bay Financial Centre Tower 1 Singapore 018981 www.bakermckenzie.com New Singapore Customs Requirement For Keeping & Maintaining Records in Image Systems Summary On 8 May 2015, Singapore Customs revised the Guide on "Keeping and Maintaining Records in Image System" (the "Guide") to include a new requirement for Traders who wish to keep and maintain records in Image Systems. The additional requirement provides that the storage system used must include proven hardware and software components reputable for security, quality and performance. 1 Traders who currently use or intend to use an Image System to store images without retaining the physical paper document should ensure that their procedures are updated to comply with the additional criteria. Details of Update to the Guide All importers, exporters and their agents (collectively, the "Traders") who use or intend to use a storage system to capture, store and retrieve images of trade documents and records relating to the purchase, importation, sale or exportation of their goods ("Image System") for the purposes of complying with their document retention obligations under Section 90(1) of the Customs Act (Cap. 70) (the "Act") can do so by complying with the Guide. No further approval from Singapore Customs is required if one can comply with the Guide. The Guide was first released in December 2011 and was recently updated on 8 May 2015. The new requirement was included in light of the Evidence Act providing that stability and reliability of the Image System will be a relevant factor of consideration for the Courts in the event that the Image System is relied upon for the admission of evidence under the Evidence Act (Cap. 97) or Evidence (Computer Output) Regulations (collectively, the "Evidence Legislation"). How this may affect you Traders must now ensure that the Image System used includes "proven hardware and software components reputable for security, quality and performance" ("Proven Systems"). It should be noted that the responsibility of ensuring compliance with the Guide remains with Traders who outsource the imaging, storage and maintenance of their trade documents and records to third-party service bureaus. 1 See Paragraph 3.4(e), Keeping and Maintaining Records in Image System, Singapore Customs, 8 May 2015 It should also be noted that all original documents must be kept unless the Image storage of the business records has been carried out in accordance with the requirements as provided for in the Guide. As the Guide does not define what will constitute a Proven System, Traders should remain cognizant of storage products offered by market leaders in the storage system, software and services industry and ensure that such products used are at all times stable and reliable. This revision is particularly relevant given the growing popularity of cloud storage services which may not offer the same security, quality and performance as a Proven System. This revision is also aimed at preventing the corruption of information from the use of unreliable software or systems. It should be noted that notwithstanding this revision, the Guide does not replace the requirements under the Evidence Legislation. Traders who intend to rely on Image Systems to admit evidence under the Evidence Legislation should seek legal advice. The failure to keep documents and records in a proper manner constitutes an offence punishable by a fine not exceeding SGD 10,000 and/or imprisonment of up to 3 years under Section 90(3) of the Act. As such, Traders who rely on the keeping and maintaining of records in an Image System for the purpose of the record keeping requirement should ensure that their Image Systems satisfy this new requirement or make the necessary Proven System upgrade. ©2015 Baker & McKenzie. All rights reserved. Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a “partner” means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an “office” means an office of any such law firm. This may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.