PRECIOUS STONES AND PRECIOUS METALS (PREVENTION OF MONEY LAUNDERING AND TERRORISM FINANCING) ACT 2019

The above Act was passed in Parliament and has come into force from w.e.f. 7th March 2019 to regulate persons who carry on business in precious metals, precious stones and precious products, so as to prevent and combat money laundering and terrorism financing. Online application for a license has to be made on or before 9th October 2019 by the existing business owners and the new ones to comply with the new law. The licensing regime has been introduced in few countries overseas as per the requirements of Financial Action Task Force (FATF) of OECD. A guideline on the requirement on the law was made by the Ministry of Law, Singapore.

LICENSING:

For a person (acting as regulated dealer) who is dealing in precious metal, precious stones or any precious product, must be a registered dealer (licensed).

An application form for registration as a registered dealer (or renewal of license), has to be made to Registrar appointed under the above Act with all the documents, required and the prescribed fee, is payable. The Registrar may grant or refuse the license.

The application for registration can be refused by the Registrar if prescribed fee is not paid, information provided to Registrar is false or incomplete, applicant is not a fit and proper person in the opinion of Registrar and granting or renew of the registration is not in the public interest.

Precious Metals include Gold, Silver, Platinum, Iridium, Osmium, Palladium, Rhodium, Ruthenium and an alloy with at least 2% in weight of all the pre mentioned precious metals, in a manufactured or unmanufactured state.

Precious Stones include Diamond, Sapphire, Ruby, Emerald, Jade and Pearl.

Precious Products include any jewellery, watch, clothing, accessory, ornament which is made up of precious metals or stones, or at least 50 % of its value is attributable to the precious stone or precious metal.

Regulated Dealing includes Manufacturing, Import or possessing for sale, Selling or offering for sale or Purchasing for the purpose of resale of any precious stones, precious metals and precious product.

Regulated Dealer is a person who is in a business of regulated dealing or business as an intermediary for regulated dealing (excluding a pawnbroker).

PRECIOUS METALS:

PRECIOUS STONES:

PRECIOUS PRODUCTS:

REGULATED DEALING:

REGULATED DEALER:

COMPLIANCE OFFICER:

A management level employee or director or owner of the business shall be appointed and will be incharge of all AML/CFT matters within the organization.

DEVELOP YOUR INTERNAL POLICIES, PROCEDURES AND CONTROLS (IPPC):

The Regulated Dealer has to develop (IPPC) to asses the risk faced by the business, appointment of Compliance Officer, his duties and responsibilities, policies for hiring and training of employees, procedures for Conducting (CDD) (ECDD) (STR), record keeping and audit of IPPC.

CUSTOMER DUE DILIGENCE:

Regulated Dealer has to maintain identifying information for individual and businesses and carry out screening of their customers against Ministry of Home Affairs website, and to Monetary Authority of Singapore website, keep records of all the information relating to the CDD and the business transaction for a period of 5 years from the date of the transaction.

Regulated Dealers are required to perform (ECDD) Enhanced Customer Due Diligence for a Politically Exposed Person (PEP), a family member or a close associate and for those countries or jurisdiction the FATF has called for ECDD, on going monitoring of CDD measures are also required.

If a Regulated Dealer conducts any Designated Transaction, either wholly or partly in Singapore, or the regulated dealer has a reason to suspect money laundering or terrorism financing, the prescribed Customer Due Diligence measures are required to be performed before entering into the transaction.

If the Regulated Dealer is unable to perform any of the Customer Due Diligence measures, he must decline to enter into any transaction with the customer, terminate the transactions entered into (if any) and determine whether this is required to be reported to suspicious transaction reporting office (CAD) under the provisions of the laws.

CASH TRANSACTION REPORTS:

Designated transaction means a purchase, sale of precious stones, precious metals and precious product wholly or partly in Singapore, for which cash & cash equivalent in total exceeding an amount of S$20,000 or its equivalent in value is received (includes 2 or more transactions to the same customer on the same day).

A regulated dealer who enters into any designated transaction must submit a Cash Transaction Report in the prescribed time, form and manner to the Suspicious Transaction Reporting Officer and immediately thereafter submit a copy to the Registrar. He has to maintain a copy of each cash transaction report for such period as may be prescribed by the law.

KEEPING OF RECORDS:

A regulated dealer must keep the record of every designated transaction and other transactions for which customer due diligence was performed, record of all information obtain through customer due diligence measures and copies of supporting documents for a period of 5 years after the date of the transaction and such form as may be prescribed.

DISCLOSURE OF SUSPICIOUS TRANSACTIONS:

A regulated dealer must make a disclosure if circumstances exist to the suspicious transaction reporting office (CAD), and then immediately submit a copy of the information so disclosed to the Registrar.

POWERS OF REGISTRAR APPOINTED UNDER THE ACT:

The Registrar or his appointed nominees has powers to enter without a warrant and search, and inspect any business premises, take possession of documents or materials, investigate and issue written notice to attend before the Registrar.

The Registrar has powers to disclose information obtained to any foreign authority. The Registrar may give written direction to terminate the business or a particular transaction with a particular customer, stop particular employee or regulated dealer to stop business.

The Registrar at the regulated dealers own cost appoint an auditor to carry out an audit for compliance of the Act and measures taken for the prevention of money laundering and terrorism financing under this Act.

Non-compliance of the various provisions, carry fines, imprisonment or both in the Act.

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