Second Reading Speech by Second Minister for Finance, Mr Chee Hong Tat, on the Customs (Amendment) Bill

     Mr Speaker, I beg to move, “that the Bill be now read a second time.”

Introduction

2. Sir, the Ministry of Finance and Singapore Customs regularly review the Customs Act to ensure that it remains up to date and in line with policy intent. The Customs Act was last amended in 2018. Since then, we have carried out another review, and propose further amendments to the Act in two areas.

3. The first set of amendments seeks to improve the effectiveness of Singapore Customs’ regulatory and enforcement operations. The second will introduce new offence provisions and enhance the penalties for specified offences.

4. These amendments will enable Singapore Customs to more effectively carry out its mandate of trade facilitation and revenue protection, and ensure that bad actors are deterred from committing offences under the Customs Act. 

Key amendments

5. Mr Speaker, the first set of amendments will grant additional powers to Singapore Customs to improve their operational effectiveness. 

6. First, we will give the Director-General of Singapore Customs the power to authorise auxiliary police officers, or APOs, to exercise powers of search, arrest, and seizure. 

   1. Today, only officers who are directly employed by Singapore Customs can exercise these powers. 

   2. However, Singapore Customs also engages APOs to support its enforcement operations, and APOs will need to be granted these powers to perform their duties effectively.

   3. This is in line with the practice in other public agencies, such as the Health Sciences Authority, the Land Transport Authority, and the National Environment Agency, who are able to appoint APOs as authorised officers under their respective legislation to exercise similar powers.

7. Second, we will grant Singapore Customs the legal power to require licensees to remove all dutiable goods from licensed warehouses before the expiry or withdrawal of their licences. 

   1. Today, the Licensed Warehouse scheme allows licensed companies to store imported dutiable goods in a designated premise known as a Licensed Warehouse, with duty and GST on these goods suspended. To qualify for this scheme, companies must meet requirements including having good compliance records, and ensuring the security of the dutiable goods.

   2. In the absence of any legislative lever today, Singapore Customs has no legal powers to compel these companies to remove their goods when the company’s licence expires or is withdrawn. 

   3. Hence, the amendment will make it a requirement for licensees to remove all dutiable goods from the warehouse even before the expiry or the withdrawal of their licence, failing which, Singapore Customs will have the legal powers to remove and dispose of all dutiable goods from the warehouse, and recover any costs incurred for the removal and disposal of these goods. 

8. Third, we will provide officers of customs with the power to stop and conduct searches on the belongings of a person that is committing, or is reasonably suspected to have committed an offence under the Customs Act. 

   1. Today, officers of customs can only exercise the power of search on persons under three narrowly prescribed conditions:

      1. One, when a person is arriving in Singapore;

      2. Two, when a person is suspected to be in possession of a bribe; and 

      3. Three, when a person has been arrested for an offence under the Customs Act.

   2. However, these conditions are too restrictive for situations when officers of customs conduct inland operations:

      1. For instance, officers of customs may receive tip-offs of persons suspected to be in possession of and illegally selling duty unpaid cigarettes in a particular part of Singapore. 

      2. These suspects are not arriving in Singapore, so they do not meet Condition 1 to invoke search; and they are not suspected to be in possession of a bribe, so they do not meet Condition 2. 

      3. As for Condition 3, while an officer of customs can arrest an individual to invoke the power of search, an arrest would be a high signature move which can have a significant impact on the person involved. In some cases, arresting the individual may not be necessary if the officer wants to first verify whether an offence has been committed. 

      4. Hence, it is more effective to amend the law to give officers of customs the legal powers to conduct searches before assessing whether an arrest should be made. 

   3. All in all, this amendment will allow Singapore Customs to conduct their inland enforcement operations more effectively. 

9. Fourth, we will grant Singapore Customs the legal power to seize computers or associated devices, mobile communication devices, and cash that are reasonably believed to be connected to offences under the Customs Act.

   1. In the course of enforcement operations and investigations, it may be necessary for officers of customs to seize such devices and cash proceeds as these may be used as evidence to prosecute the offender under the Customs Act. 

10. Sir, let me now move on to the second set of amendments, which seeks to introduce two new offence provisions, and enhance the penalties for specified offences.

11. First, we will introduce a new offence provision to penalise individuals who allow their premises or vehicles to be used to commit an offence under the Customs Act. This will more effectively deter individuals from committing an offence or taking actions that assist others in the commission of an offence.

    1. For example, there have been cases where individuals repeatedly allowed their premises or vehicles to be used by criminal syndicates to store or transport duty unpaid goods. These individuals then claim innocence by saying that they did not know their actions had helped to facilitate the commission of offences.

    2. With this amendment, Customs will be able to take action against such individuals, unless they are able to show that they had exercised due care in respect of the actions in question.

12. Second, we will also introduce a new offence provision for acts of altering, suppressing, concealing, or destroying any books, documents, or other records with the intent of obstructing investigations under the Customs Act. 

    1. Today, such acts are considered offences under the Penal Code, but not the Customs Act. This means that when officers of customs encounter such acts, Singapore Customs will need to refer offenders to the Singapore Police Force for investigation. 

    2. The proposed amendment to include this offence under the Customs Act will allow Singapore Customs to investigate these cases directly and decide on the necessary follow-up actions without referring these cases to the Singapore Police Force. 

13. Third, we will enhance the penalties for some offences, to strengthen their deterrent effect:

    1. For offences involving the evasion of duties, where the amount of duty cannot be ascertained, we will increase the maximum fine from $5,000 to $10,000. This aligns the maximum fine with that of other similar offences under the Customs Act. 

    2. For specified offences under Section 128 of the Customs Act, such as those related to fraudulent evasion, and possession or storage of uncustomed or prohibited goods, we will provide for the option for the Courts to impose an imprisonment term in addition to the current penalty of a fine. 

Conclusion

14. Mr Speaker, in sum, the amendments in this Bill will enable Singapore Customs to carry out their regulatory and enforcement operations more effectively, and strengthen the deterrent effect for offences under the Customs Act. These efforts will ultimately strengthen Singapore’s status as a trusted and thriving trade hub.

15. Mr Speaker, I beg to move.