With effect from 15 October 2014, every dealer in precious stones, precious metals and precious products (“PSMD”) is subject to a cash transaction reporting regime which is set out in the Corruption, Drug Trafficking and Other Serious Crimes (Cash Transaction Reports) Regulations 2014. The new regime aims to reduce the risk of money laundering and terrorism financing associated with transactions involving precious commodities.
Precious stones include diamond, sapphire, ruby, emerald, jade or pearl. Precious metals include gold, silver, platinum, iridium, osmium, palladium, rhodium or ruthenium, or an alloy with at least 2% in weight of precious metal. Finished products (other than any industrial tool or medical device) that derive 50% or more of its value from any precious stone or precious metal are considered as precious products and are subject to the reporting regime as well.
Among other things, PSMDs are now required to:
- File a cash transaction report (“CTR”) in prescribed NP 759 Form with the Suspicious Transaction Reporting Office of the Commercial Affairs Department within 15 business days when they conduct any cash transaction exceeding S$20,000, or its equivalent in foreign currency, which involves precious stones, metals or products. Such cash transaction may be a single cash transaction with a customer which exceeds S$20,000 or two or more cash transactions in a single day with the same customer;
- Conduct customer due diligence measures to determine the identity of the customer and enquire 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 above requirements are guilty of a criminal offence which is punishable with a maximum fine of S$20,000 and/or imprisonment for a maximum term of two years.
More details about the new regime are available at the websites of the Monetary Authority of Singapore www.mas.gov.sg and the Commercial Affairs Department www.cad.gov.sg. Please click on the following links to view them: