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Stiffer anti-money laundering rules for Singapore jewellers ahead

SOME 2,500 jewellers and businesses dealing with precious stones and metals in Singapore are due to meet tighter rules to curb money laundering and terrorism financing, as called for under international standards.

Under a new Bill here, regulated dealers in precious stones and metals will have to register with the Registrar within the Ministry of Law, and carry out additional layers of checks.

These new regulations are expected to come with registration fees that have not yet been determined under the Bill. The fees will come on top of added compliance costs overall.

The Bill was submitted for first reading in Parliament on Monday, with the registration process expected to begin in the second quarter of this year.

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Besides jewellers, bullion traders and auctioneers are among the businesses that are due to be affected.

As it is, these businesses already perform customer checks before carrying out any cash transactions more than S$20,000. After carrying out checks, they file cash transaction reports for such dealings. They also already file suspicious transactions reports, which are used to flag suspicions of activities in money laundering and terrorism financing.

With the new Bill, registered dealers will have to do more due-diligence checks on customers when there are suspicions of money-laundering and terrorism financing. They will also need to perform checks when they suspect that the customer identification data they have on hand may, in fact, be false.

In addition, these businesses will have to conduct money laundering and terrorism financing risk assessments, as well as develop internal policies and controls to tackle related risks. For larger dealers – those who handle cash transactions of more than S$20,000 – they will also need to carry out independent audits.

Pawnbrokers are exempted from these new regulations, as pawnbrokers are already regulated under the Pawnbrokers Act.

Similarly, financial firms that deal with precious stones and metals are also exempted from nearly all requirements so long as they are regulated by the Monetary Authority of Singapore (MAS). Examples include regulated trading platforms that make loans backed against silver bars, or that sell tokens holding ownership rights to gold coins.

But these MAS-regulated financial firms that deal with asset-backed tokens or loans will still need to file cash transaction reports.

Under the Bill, the Registrar will hold powers to inspect and investigate possible contraventions by such dealers. Dealers that fail to meet the new regulations face a range of penalties, from a suspension of registration to imprisonment.

The latest Bill will now align Singapore with global best practices, including recommendations set by the Financial Action Task Force (FATF).

The international regulatory body reviews the progress of its members in putting in place measures to prevent money laundering and terrorism financing. Singapore has been a member of the FATF since 1992.

Regulated dealers will be offered up to six months from the commencement of the Bill to complete registration.