Precious Stones and Precious Metals Act: Compliances for Regulated Dealers in Singapore

Introduction

Singapore, often referred to as the “Lion City,” is not only a global financial hub but also a thriving market for precious stones and metals. To ensure the integrity of this industry, Singapore has enacted the Precious Stones and Precious Metals Act (PSPMA), a comprehensive regulatory framework that governs the trade and business activities of precious stones and precious metals. In this article, we will explore the key provisions of the PSPMA and the compliance requirements that all regulated dealers in Singapore must adhere to.

Understanding the Precious Stones and Precious Metals Act (PSPMA)

The Precious Stones and Precious Metals Act, established in 2019, is a critical piece of legislation in Singapore’s efforts to combat money laundering and terrorist financing. The primary objective of the PSPMA is to regulate the precious stones and metals industry, thereby enhancing transparency, accountability, and integrity within the sector.

Key Provisions of the PSPMA

Licensing Requirements: Under the PSPMA, businesses dealing in precious stones and metals must obtain the appropriate licenses. There are different types of licenses available, depending on the nature of the business activities. These licenses include the precious stones and precious metals dealer license, refinery license, and assay office license.

Customer Due Diligence (CDD): Regulated dealers are required to perform thorough customer due diligence before entering into any transaction. This includes verifying the identity of customers, assessing the risk associated with the transaction, and monitoring customer relationships on an ongoing basis.

Record Keeping: Precious metals and stones dealers must maintain detailed records of all transactions, including customer identification documents, transaction records, and supporting documents. These records should be kept for a minimum of five years.

Suspicious Transaction Reporting: Regulated dealers have a legal obligation to report any suspicious transactions to the Suspicious Transaction Reporting Office (STRO). This helps in identifying and preventing illicit activities within the industry.

Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) Policies: Dealers must have robust AML and CFT policies and procedures in place to detect and prevent money laundering and terrorist financing activities.

Internal Controls: The PSPMA requires dealers to establish internal controls to manage and mitigate the risks associated with their business operations.

Compliances for Regulated Dealers

To comply with the PSPMA effectively, regulated dealers must take several proactive measures:

Obtaining the Appropriate License: Ensure that your business holds the necessary license(s) for your specific operations. This requires submitting a comprehensive application and meeting the regulatory requirements set by the authorities.

Implementing AML/CFT Measures: Develop and implement strong AML/CFT policies and procedures. This includes conducting risk assessments, training staff on AML/CFT matters, and monitoring transactions for suspicious activities.

Customer Due Diligence (CDD): Adhere to stringent CDD procedures. Verify the identity of all customers and continuously monitor high-risk relationships.

Record Keeping: Maintain meticulous records of all transactions, as these will be subject to scrutiny by regulatory authorities.

Suspicious Transaction Reporting: Establish a mechanism for promptly reporting any suspicious transactions to the relevant authorities.

Compliance Reviews and Audits: Regularly review and audit your compliance with PSPMA requirements. Consider engaging external experts to ensure your operations remain compliant.

Keep Abreast of Regulatory Updates: Stay informed about any changes or updates to the PSPMA to ensure that your business remains compliant with the latest regulations.

Conclusion

The Precious Stones and Precious Metals Act plays a pivotal role in upholding the integrity of Singapore’s precious stones and metals industry. Regulated dealers must navigate this regulatory landscape with diligence and care to ensure they meet their compliance obligations. By doing so, they not only protect their businesses from regulatory penalties but also contribute to maintaining Singapore’s reputation as a global hub for the trade in precious stones and metals.

For more information pertaining to the guidelines and compliances for regulated dealer, please refer to https://acd.mlaw.gov.sg/guidelines/.

You may refer to https://acd.mlaw.gov.sg/list-of-registered-dealers/ for the lists of registered regulated dealer in Singapore.

Please contact us if you need more information pertaining to the regulations and compliances for registered regulated dealer in Singapore.

Email: info@epics.sg

Phone: +65 84892620