New rules on precious stone, metal sales

SINGAPORE - Dealers selling precious stones and metals costing more than $20,000 will have to report the transaction to the Commercial Affairs Department (CAD), if the sale is settled in cash.

This applies even to foreign currency transactions that work out to the equivalent of $20,000.

The report must be lodged within 15 business days of the sale, the CAD said yesterday.

The move, which will take effect from Oct 15, was first mooted in May. It follows the amendment of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act in Parliament in July.

Earlier this year, the Monetary Authority of Singapore axed the $10,000 note as part of the Government's move to fight money laundering and terrorism financing.

"Requiring dealers of precious stones and metals to report large cash transactions will reduce risks and facilitate the detection, investigation and prosecution of money laundering, terrorism financing and other serious crimes," the CAD said.

Precious stones and metals are portable and valuable, which makes them easier targets for criminals to launder illicit funds.

"The risk increases when the transaction is conducted in cash where it is more difficult to trace the origin of the funds," the CAD said.

The new rules, which are in line with international standards set by the Paris-based Financial Action Task Force, also require dealers to verify the buyer's identity and establish whether the customer was acting on behalf of a third party. In such a case, the third party must be identified.

Details of the sale must also be recorded and kept for five years after it is reported to the CAD. Dealers are required to implement internal controls as well.

Dealers who fail to comply with the new rules will be fined up to $20,000 and may face imprisonment of up to two years, the CAD said.

This article was first published on October 9, 2014.
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