On 10 April 2019, the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 (No. 7 of 2019) became effective.
The Act applies to persons engaged in ‘regulated dealing’, which includes manufacturing, importing, selling, and purchasing for the purpose of resale precious stones, precious metals and precious products. It also includes selling or redeeming tokens or instruments backed by precious stones, precious metals or precious products.
Under the Act, precious stones include diamonds, jades and pearls, and precious metals include gold, silver, platinum and alloys with at least 2% of precious metals. Precious products include jewellery, watches and other items with 50% or more of their value attributable to precious stones or metals. Industrial equipment and medical devices are generally excluded from precious products.
The Act’s primary objective is to prevent money laundering and terrorism financing and so imposes certain customer due diligence and recordkeeping obligations on registered dealers. In addition, regulated dealers are obligated to implement adequate programmes and measures to prevent money laundering and terrorism financing, or to disclose suspicious transactions and other similar and related circumstances.
Persons currently engaged in regulated dealing and their intermediaries (e.g., auction houses and trading platforms) must therefore register with the Registrar of Regulated Dealers under the Ministry of Law. The Act gives a transition period of 6 months, from the effective date of the Act, or until 10 October 2019, within which to register. Past the transition period, it will be an offence to continue to engage in regulated dealing without registration.
Penalties for violating the Act include fines up to S$75,000 and/or imprisonment up to 3 years, plus fines up to S$7,500 per day for offences continuing after conviction.
Pawnbrokers and regulated financial institutions are exempt from registration as their activities are regulated under other laws. Foreign dealers that do not have a permanent place of business in Singapore are also exempt from registration.
Disclaimer: This article is for general information only and does not constitute legal advice.
