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 (FTZs) play a critical role in building Singapore’s position as a trading hub. To maintain the competitiveness of our FTZs, we need to ensure that they remain secure.
A robust regulatory regime of the FTZs has been put in place to govern the security of our FTZs.
Strict controls and limits are imposed on activities permissible within the FTZs. Transactions and activities within the FTZs must comply with all laws and regulations in Singapore, which empower government authorities to impose controls on the FTZs and undertake enforcement action such as routine checks and operations against illicit trading activities. There are no other exemptions or special treatment for FTZs operators.
Enforcement in FTZs
Singapore Customs partners enforcement agencies such as the Singapore Police Force and the Immigration & Checkpoints Authority (ICA) to ensure the security of the FTZs, 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 FTZs. 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 FTZs featured in Singapore Customs’ corporate magazine, inSYNC, here:
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 (ZG) Warehouse Scheme 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
Companies have to be licensed under Singapore Customs’ ZGS to store GST suspended non-dutiable goods in their licensed premises.
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 red flag indicators for Zero-GST warehouse licensees here to detect and file a STR with the STRO.