Overview of Regulated Dealers in Singapore

In Singapore, any commercial transaction involving cash or cash equivalents equal to or exceeding S$20,000 for precious stones, precious metals, or precious products (PSPMs) triggers mandatory statutory reporting and Customer Due Diligence (CDD) under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 (PSPM Act). Enforced to safeguard Singapore’s financial sector against money laundering and terrorism financing, the regime mandates that all businesses dealing or brokering in PSPMs must register with the Registrar of Regulated Dealers under the Ministry of Law Anti-Money Laundering/Countering the Financing of Terrorism Division. Operating without valid registration or failing to comply with statutory AML/CFT controls carries severe regulatory consequences, including statutory fines up to S$75,000 and imprisonment terms of up to 3 years per offense.

Why the Precious Stones and Precious Metals Sector Faces High ML/TF Risks

Precious stones, precious metals, and high-value jewelry present distinct vulnerabilities to money laundering (ML), terrorism financing (TF), and proliferation financing (PF). Regulatory authorities scrutinize the sector due to key inherent risks:

• High Liquidity and Anonymity: PSPMs carry immense monetary value in compact physical forms, making them easily transportable across international borders without leaving digital financial trails.
• Instant Cash Convertibility: Bullion, diamonds, and luxury watches can be rapidly converted back into cash in almost any global jurisdiction.
• Price Volatility and Valuation Complexity: Subjective valuations of rare gemstones and customized jewelry can be exploited to disguise illicit wealth transfers.

Without strict internal controls, dealers risk unknowingly facilitating illicit trade or laundering proceeds from predicate criminal offenses.

Mandatory Registration and Licensing Requirements

Under Section 6 of the PSPM Act, any person carrying on a business of regulated dealing or acting as a broker for regulated dealing must register with the Registrar of Regulated Dealers.

Scope of Regulated Goods

A business falls under the regulatory scope of MinLaw if it deals in:

• Precious Metals: Gold, silver, platinum, or palladium.
• Precious Stones: Diamonds, sapphires, rubies, emeralds, jade, or pearls.
• Precious Products: Any finished item (such as jewelry or watches) that derives a significant portion of its value from embedded precious metals or precious stones.

Core AML/CFT Statutory Obligations for Regulated Dealers

Registered regulated dealers must implement internal policies, procedures, and controls (IPPC) tailored to their specific operational risk profile.

1. Customer Due Diligence (CDD) and Enhanced Customer Due Diligence (ECDD)

Dealers must perform CDD prior to entering into a transaction equal to or exceeding S$20,000 in cash or cash-equivalent payment instruments (such as cash cards or physical bearer negotiable instruments), or when there is a suspicion of money laundering or terrorism financing regardless of transaction value.

CDD measures require dealers to:

• Identify and verify the identity of the customer using reliable, independent source documents (e.g., NRIC or Passport).
• Identify and verify the beneficial owners of corporate entities or legal arrangements.
• Obtain information on the intended nature and purpose of the business relationship.

Where higher ML/TF risks are identified—such as transactions involving Politically Exposed Persons (PEPs) or customers from high-risk jurisdictions identified by the Financial Action Task Force (FATF)—dealers must execute Enhanced Customer Due Diligence (ECDD) by verifying the source of wealth and source of funds.

2. Cash Transaction Reporting (CTR)

Under Section 17 of the PSPM Act, regulated dealers who execute cash transactions (or series of linked cash transactions) involving PSPMs exceeding S$20,000 must lodge a Cash Transaction Report (Form NP 759) via the STROP Online Portal within 15 business days of the transaction.

3. Suspicious Transaction Reporting (STR)

If a dealer knows or has reasonable grounds to suspect that any asset or transaction involves proceeds of crime or is linked to terrorism financing, they are legally required under Section 39 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 (CDSA) to file a Suspicious Transaction Report (STR) with the Suspicious Transaction Reporting Office (STRO).

Key Components of a Robust AML/CFT Framework

To satisfy Ministry of Law compliance audits, regulated dealers must maintain an operational compliance framework comprising four primary pillars:

1. Enterprise-Wide Risk Assessment (ERA): Documenting operational risks across customer categories, delivery channels, geographic exposure, and product offerings.
2. Written IPPC Guidelines: Maintaining updated internal compliance manuals detailing customer onboarding, screening against UN Sanctions lists, and transaction monitoring protocols.
3. Appointed Compliance Officer: Designating a qualified officer responsible for overseeing regulatory filings, CTR/STR submissions, and MinLaw audit responses.
4. Staff Training Programs: Conducting ongoing AML/CFT training for all customer-facing and management staff to ensure prompt detection of red flags.

How Alder Supports Your Regulatory and Compliance Needs

Navigating the statutory demands of the PSPM Act, setting up robust IPPC frameworks, and managing MinLaw registration require dedicated regulatory expertise.

Alder Corporate Services assists precious stones and precious metals dealers in establishing fully compliant corporate structures. Our specialists assist clients with MinLaw registration applications, enterprise-wide risk assessment drafting, internal AML/CFT policy design, and ongoing corporate secretarial and tax compliance.

To review your regulatory framework or apply for MinLaw registration, contact the compliance specialists at Alder Corporate Services.

Frequently Asked Questions