Cash Transaction Reporting Regime for Precious Stones and Precious Metals Dealers

Cash Transaction Reporting Regime for Precious Stones and Precious Metals Dealers

Introduction

The Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act has been amended to include new reporting requirements for Precious Stones and Metals Dealers (PSMDs). A PSMD is required to submit a Cash Transaction Report (CTR) to the Suspicious Transaction Reporting Office (STRO) when he conducts any cash transaction with a value, or any 2 or more related cash transactions in a single day with a total value, that exceeds SGD 20,000 (or its equivalent in foreign currency), with a customer for the sale of any precious stone, precious metal or precious product. This requirement is part of Singapore’s overall effort to combat money laundering and terrorism financing.

Background

Precious stones and precious metals are portable and have high commercial value. The established markets for precious stones and precious metals make it easy to convert these commodities into cash. These characteristics make dealing in precious stones and precious metals a convenient means for criminals (including terrorists) to launder their illicit funds.

Criminals are known to use funds obtained from their illegal activity to buy precious stones and precious metals and subsequently convert these items back into cash. This process of money laundering helps to obscure the true origin of the illicit funds. Precious stones and precious metals could also be used directly to make payment for goods and services, including those in support of criminal activities. Of course the precious stones and precious metals could themselves be stolen goods and a criminal may wish to convert it to cash to benefit from his crime and avoid being traced.

Cash transactions are also more difficult to trace compared to transactions that involve a financial institution such as a bank or credit card company. The requirement for PSMDs to report cash transactions will therefore facilitate the detection, investigation and prosecution of money laundering, terrorism financing and other serious crimes.

Singapore is a member of the Financial Action Task Force (FATF). The cash transaction reporting regime is aligned with the international standards set by FATF to combat money laundering and the financing of terrorism and proliferation of weapons capable of causing mass destruction.

Reporting Requirement

From 15 October 2014, a PSMD who enters into any of the following cash transactions must submit CTR(s) to STRO:

  1. a single sale to a customer of any precious stone(s), precious metal(s) or precious product(s), for which cash of an amount exceeding SGD 20,000 is received in payment;
  2. Two or more sales in a single day to the same customer of any precious stone(s), precious metal(s) or precious product(s), for which cash of a total amount exceeding SGD 20,000 is received in payment; or
  3. 2 or more sales in a single day to customers (whom the dealer knows acts on behalf of the same person) of any precious stone(s), precious metal(s) or precious product(s), for which cash of a total amount exceeding SGD 20,000 is received in payment.

All CTRs must be submitted to STRO within 15 business days (Mondays – Fridays, excluding Saturdays, Sundays and Public Holidays) from the date of the transaction.

Dealer, precious stone, precious metal and precious product are defined as follows:

Dealer A person who, in the course of the person’s business, manufactures, sells, offers for sale, imports for sale or possesses for sale any precious stone, precious metal or precious product*.
Precious Stones Diamond, Sapphire, Ruby, Emerald, Jade (Nephrite and Jadeite) and includes any Pearl.
Precious Metals Gold, Silver, Platinum, Iridium, Osmium, Palladium, Rhodium, Ruthenium, an alloy with at least 2% in weight of precious metal.
Precious Product Any finished product (other than any industrial tool or medical device) that derives 50% or more of its value from any precious stone or precious metal contained in or attached to that product.

*In these contexts, a “sale” of any precious stone, precious metal or precious product includes a supply of the precious stone, precious metal or precious product under a conditional sale agreement or hire-purchase agreement, and “sells” includes supplying under a conditional sale agreement or hire-purchase agreement.

A PSMD is also required to record the details of each cash transaction, including the identity and contact information of the customer, and to maintain the supporting documents. These records should be kept for a period of 5 years from the date of submission of the cash transaction report.

Failure to comply with the cash transaction reporting requirement is an offence punishable with a fine of up to SGD 20,000 and/or imprisonment for a term of up to two years.

Forms

Nearer the implementation date, CTR forms (Form NP 759) will be available for collection at the following locations:

  • Singapore Clock & Watch Trade Association
    36-B Seah Street
    Singapore 188392
  • Diamond Exchange Singapore
    545 Orchard Road #11-02
    Far East Shopping Centre
    Singapore 238882
  • Singapore Jewellers Association
    No. 38-D North Canal Road
    Singapore 059294

If you require a large quantity of NP759 forms, you can email STRO at [email protected] or call +65 6220 4716+65 6220 4716 on the collection arrangements from STRO’s office at:

  • Commercial Affairs Department
    391 New Bridge Road #06-701
    Police Cantonment Complex Block D
    Singapore 088762

Soft copies of the form can be downloaded here.

Completed NP 759 forms have to be signed (digital signatures are not allowed) and delivered by post or by hand to the Suspicious Transaction Reporting Office, 391 New Bridge Road #06-701, Police Cantonment Complex Block D Singapore 088762.

Explanatory notes to guide you to fill up the NP 759 form is available here.

If you have a query about the cash transaction reporting requirements or require assistance to complete the NP 759 form, you can email STRO at [email protected] or call +65 6220 4716+65 6220 4716.

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Last Updated on 21 April 2016