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Second Reading Speech By Mrs Josephine Teo, Minister of State for Finance and Transport On The Customs (Amendment) Bill 2011, at The Parliament, 22 Nov 2011

22 Nov 2011

Mr Speaker, Sir, I beg to move, "That the Bill be now read a second time."

2. The Customs (Amendment) Bill comprises three main categories of changes. The first category seeks to enhance Customs enforcement. The second category allows Singapore Customs to share information collected under the Customs Act with domestic public agencies for the investigation and prosecution of certain offences, or when it is in the public interest to do so. The third category improves the administration of the Customs Act. Let me now highlight the key changes.

Enhancing Customs Enforcement

3. First, we will increase the penalties for tobacco-related offences. Sir, from 2005 to 2010, the number of tobacco-related customs offences increased by about 24%, while the number of repeat offenders in the same period increased by more than six times. We will introduce mandatory imprisonment for repeat offenders caught with more than 2kg of tobacco products, and increase the minimum court fine to $4,000 for all repeat offenders, comprising $2,000 for the unpaid duty, and $2,000 for the unpaid GST.

4. We will also increase the court fines for first-time offenders caught with contraband cigarettes. Currently, the minimum court fine as provided under the Act is 10 times the duty and tax payable, which could at times be lower than the composition sum for minor offence cases. The minimum court fine will therefore be raised to $2,000 for first-time offenders, comprising $1,000 each for the unpaid duty and the unpaid GST. Clause 17 of the Bill provides for these changes.

5. We will also amend the Act to extend liability to any person who furnishes incorrect information to another for making declarations. Currently, traders may appoint third-party agents to declare their consignments. However, under the Act, only declaring agents who make false declarations may be prosecuted, but not the traders who provide the information. Clause 15 of the Bill allows Singapore Customs to prosecute traders who have provided incorrect information as well.

Facilitating the Disclosure of Information to Domestic Public Agencies

6. I shall now move on to the amendment that facilitates the disclosure of information to domestic public agencies, subject to safeguards.

7. Currently, information declared by traders is strictly confidential. It can only be disclosed with their consent, or if the information is necessary for the purposes of an investigation, enforcement or prosecution under the Customs Act or the Goods and Services Tax Act. This is to protect sensitive commercial data and uphold our integrity as a trading hub. However, we recognise that there may be over-riding reasons for Singapore Customs to disclose information to other domestic public agencies. These could be for the purpose of investigation and prosecution of offences under other domestic laws, or when there are national security, public health and safety concerns.

8. The Customs Act will thus be amended to allow Singapore Customs to disclose information to domestic public agencies, where public interests are of concern. To reassure traders that the confidentiality of their trade data will be respected, comprehensive procedural safeguards will be established. Agencies requesting for customs information will be required to seek approval from the Minister for Finance. Each request will be considered carefully, and will be granted only when there is a strong justification to do so. In addition, any information disclosed to the domestic public agencies will be governed by the Official Secrets Act. Clause 11 of the Bill provides for this change.

Improving the Administration of the Customs Act

9. Sir, I will now touch on some of the amendments that will improve the administration of the Act.

10. We will introduce a ticketing system for minor customs offences. This helps to streamline the enforcement process by automatically requiring any offender who fails to pay the composition sum to be brought to court. The offences for which the ticketing system is applicable will be prescribed. Clause 14 of the Bill provides for this change.

11. We will also enable Singapore Customs to appoint persons such as a taxpayer’s bank or employer as an agent for recovering unpaid duties. This is similar to the provision for the Income Tax Act and GST Act. Clause 13 of the Bill provides for these changes.

12. The next change pertains to the use of image systems for the retention of trade documents. Traders must retain trade documents, regardless of whether these are in hardcopy or electronic form, for no less than five years. Clauses 10 and 12 of the Bill allow traders to keep an electronic image of the records instead of the original documents, at any time after the goods in question have been removed from customs control.

13. We will also introduce a provision to facilitate the implementation of the Compressed Natural Gas (CNG) duty. In Budget 2009, we announced that Compressed Natural Gas, or CNG, will be dutiable from 1 Jan 2012. The Customs Act will therefore be amended to define CNG as a dutiable fuel, and to extend the three-quarter tank rule to include CNG tanks. Clauses 2, 4, 18 and 20 of the Bill provide for this change.

14. The remaining seven legislative changes are technical in nature. They provide greater legal clarity on the application of specific provisions within the Customs Act, and enabling clauses to allow subsidiary legislation to be made.


15. To conclude, the Customs Act is being updated to enhance customs enforcement, to allow Singapore Customs to share information collected under the Customs Act with domestic public agencies where public interests are of concern; and to improve the administration of the Act. Mr Speaker, Sir, I beg to move.