Adhering to Trading Sanctions and Restrictions in Singapore
Ever since Sir Stamford Raffles disembarked on the shores of Singapore, our tiny island transformed from a humble fishing village to one of the world’s busiest trading posts in the world. Modern Singapore proves to be no different, cementing its position as one of Asia’s largest trading hubs. Therefore, it is easy to see why the business of exporting and importing things in Singapore may be a thriving one.
However, before you start excitedly planning your next business venture, you should be aware of the restrictions that Singapore has imposed on the kinds of goods that can be imported or exported. There are good reasons for this – for example, we would not want dangerous goods, such as guns, to be proliferating in our streets.
Thus, this article aims to inform any potential reader who will be interested in the import-export business about the applicable laws and regulations regarding the import and export of goods into Singapore. With this information, you will be better able to make a more informed choice on the types of goods (or even services) you can import and export.
It will cover:
- What to do before starting to import or export goods out of Singapore
- How to check whether restrictions apply to the importing/exporting of certain goods
- What to take note of when importing goods into Singapore
- What to take note of when exporting goods out of Singapore
- The penalties for failing to comply with the relevant import/export rules
- The need to comply with trade sanctions
- The penalties for not complying with trade sanctions
What Should You Do First Before Starting to Import or Export Goods Out of Singapore?
Before you can import or export goods out of Singapore, there are a few steps that need to be performed:
- To bring goods in and out of Singapore, you are first required to register your import-export company with the Accounting and Corporate Regulatory Authority of Singapore (ACRA).
- After you have registered your business with ACRA, you need to:
- Register as a trader with Singapore customs; and
- Activate your Customs Account.
- Next, you will have to apply for a customs permit, which is a permit that allows you to transport goods either into, out of, or through Singapore. There are different types of customs permit that you may need to apply for, depending on the type of goods you are importing or exporting, and the purpose of your import activities. This is further elaborated upon in the sections below.
How Can You Check Whether Restrictions Apply to the Importing/Exporting of Certain Goods?
The starting point for any person who wishes to know what restrictions apply to the importation or exportation of goods is the Singapore Customs website. On it, you will find a list detailing the types of prohibited trading activity. These include:
- The importation of chewing gums (excluding approved oral and medicinal chewing gum), rhinoceros horns as well as controlled drugs and substances.
- The exportation of strategic goods and technology that are capable of being used to produce or develop weapons of mass destruction.
Additionally, it is important to know that import and export controls sometimes depend on the nature of the businesses that you are dealing with. For instance, you could be faced with a situation where the Singapore government has imposed a sanction or control measure on a specific sector of a foreign country (e.g. financial institutions of that foreign country). This means that while you can import and/or export commodities from that country, you may not be able to do the same for the provision of financial services.
What to Take Note of When Importing Goods Into Singapore
When it comes to the importation of goods into Singapore, there are two classes that you should take note of:
- Prohibited goods; and
- Controlled goods.
First, prohibited goods are goods that are entirely prohibited from being brought into Singapore. On top of the items mentioned above, prohibited goods entail:
- Pistol or revolver-shaped lighter cigarettes;
- Endangered species of wildlife and products derived from the body of such animals;
- Sensitive telecommunications equipment, such as those dealing with military communication equipment, telephone voice-changing equipment, radio communication equipment dealing with certain frequencies, and jamming devices;
- Obscene articles, publications and video tapes/discs;
- Chewing tobacco; and
- Imitation tobacco products such as electronic cigarettes and vaporisers.
In addition, Singapore provides a list of controlled goods. The importation of such goods has to be approved by the relevant government agencies before they can be imported into Singapore. In this case, you should obtain the necessary advance notification, licence or certificates prior to bringing such controlled goods into Singapore.
Some examples of controlled goods are:
- Animals and fish;
- Ornamental fish;
- Meat and meat products for consumption;
- Fruits and vegetables;
- Toy guns, pistols and revolvers;
- Certain types of medicines and poisons;
- Bulletproof clothing; and
- Arms and explosives.
If you wish to check whether certain goods are controlled goods for the purposes of import, you can do so by accessing the Harmonized System/product code search engine here. You can also check the Singapore customs website and the GoBusiness government directory, which inform users of the licences and permits they require for the importation of certain types of goods into Singapore.
Finally, you must ensure that you have the appropriate customs import permit to import the goods into Singapore. You may be required to obtain different types of import permit, depending on the purpose of your import activities. For example, if you are importing goods for the purpose of destroying them you need to obtain the “Destruction” permit. However, if you want to import your goods and store them in a warehouse before shipping them to the next destination, you may need to obtain the “Approved Premises” permit.
As mentioned above, you should apply for your customs import permit once you have registered your import/export company with ACRA. Once you have done so, you can either directly apply through TradeNet to obtain customs permit for your own shipments, or appoint a declaring agent to obtain the permit on your behalf.
You can find out more about the application process here.
Notwithstanding the above, there are certain import situations in which a customs import permit would not be required. These would include (but are not limited to) the following situations where you are importing:
- Intoxicating liquors of up to 10 litres and tobacco of up to 0.4 kilograms;
- Investment precious metals of up to 0.5 kilogrammes for personal use;
- Self-propelled boats for pleasure and recreation;
- Freight shipping container for international conveyance of goods.
What to Take Note of When Importing Goods Out of Singapore
With regard to the exportation of goods, you are generally required to obtain the relevant customs export permit before transporting anything out of Singapore. You will require a customs export permit for the exportation of:
- Locally manufactured goods.
- Goods from Free Trade Zones.
- Dutiable goods from a licensed warehouse; and
- Non-dutiable goods from a zero-GST warehouse, and goods under the Major Exporter Scheme
The process of applying for a customs export permit is similar to how you would go about obtaining an import permit – you need to first register your business with ACRA. Once you have done so, you can apply for the necessary customs permit for your business through TradeNet, or appoint a declaring agent on your behalf to apply for the same. You can find out more about the application process here.
However, there are certain kinds of goods that are completely prohibited from being exported from Singapore. These include:
- Rhinoceros horn (worked, unworked or prepared and any part, powder or waste of such horn).
- Any goods and technology that meet the technical specifications under the Strategic Goods (Control) Act, which is intended or likely to be used for producing weapons of mass destruction.
On the other hand, some goods are controlled as an export item. This means that you are required to obtain the relevant licence or permit (as the case may be) from the relevant local governmental agencies (on top of the export permit) in order to export these goods.
For example, you are required to obtain a specific type of permit to export certain types of military equipment or computers under the Strategic Goods (Control) Act.
In other cases, the country to which you are exporting goods may also have certain export regulations. For example, you may be required to adduce a Certificate of Origin to prove that your exported goods were produced locally.
Penalties For Failing to Comply with the Relevant Import/Export Rules
In summary, if you imported or exported controlled goods without complying with the relevant laws, you are liable to be punished.
The severity of such punishment depends on the type of charge that you would be facing under the relevant legislation. For example, you could be liable to be punished under the:
- Customs Act, for failing to make declarations or making false declarations when importing/exporting goods into Singapore. This can occur, for example, if you deliberately omit to include certain details regarding your shipment, such as the value of the insurance charges in a bid to reduce Goods and Services Taxes that you may have to pay. You could face a fine of up to S$10,000, or be fined the amount of charges invaded (whichever is greater) and/or an imprisonment term of up to 12 months;
- Regulation of Imports and Exports Act, for incorrectly describing the trade description of goods that you are importing/exporting. A trade description is any description of a good which relates to matters, such as place of origin, manufacture or production of goods. Thus for example, if you imported your goods from Malaysia but indicate they have been imported from China, you can be found guilty of applying an incorrect trade description. For this offence, you can be punished with a fine of up to S$100,000, or 3 times the value of the goods in question (whichever is greater), and/or imprisoned for up to 2 years;
- Other relevant laws that set out the penalties for either importing/exporting prohibiting or controlled goods. For example:
- Under the Tobacco (Control of Advertisement and Sale) Act, it is illegal to import vapourisers into Singapore. You can therefore be liable for a fine of up to S$10,000 or 6 months’ jail for a first-time offence of importing vaporisers into Singapore.
- Under the Strategic Goods (Control) Act, it is an offence to export or importing any strategic goods without the requisite licence or permit. You can be liable to a fine of up to S$100,000, or 3 times the value of the goods in question (whichever is greater), and/or imprisoned for up to 2 years.
Thus you should take care to carefully go through the relevant customs and import legislation to make sure that you do not fall afoul of the prescribed import/export laws and regulations.
Complying with Trade Sanctions
A trade sanction refers to legal restrictions put in place by a country to restrict trade with another. Export and import restrictions are one common type of trade sanction. These measures are typically only temporary and can be put in place for any reason. However, you still are required to comply with your country’s laws and foreign policy when carrying out your export/import business.
To check if a trading or trade-related activity is bound by these sanctions, you may visit the Singapore customs website. This would provide you an updated list of the current sanctions that are put in place by the government. You should also check whether the relevant government bodies (such as the Ministry of Foreign Affairs or the Monetary Authority of Singapore) have issued any directions or notices regarding these sanctions.
An example of a sanction would be the trade sanctions imposed on Russia by the Singapore government, in response to Russia’s invasion of Ukraine. The Singapore government banned the export of military and technological goods that may be used as weapons or contribute to offensive cyber operations. The Singapore government also announced that, amongst others, local financial institutions are prohibited from providing financial services in relation to the export from Singapore any goods which are subject to export control in Russia.
Penalties For Not Complying with Trade Sanctions
As with import/export legislation, there will be penalties if you try to circumvent the sanctions that have been imposed by the Singapore government. Normally, governmental bodies (such as the Monetary Authority of Singapore and Ministry of Foreign Affairs) will elaborate upon the trade sanctions that are put in place. If you fail to adhere to these sanctions, you can be punished under the relevant legislation, such as the Monetary Authority of Singapore Act or the United Nations Act.
For example, the Monetary Authority Act of Singapore provides that if any financial institution refuses to comply with directions issued by MAS, they can be liable for a fine of up to a $20,000. Similarly, you can be found liable under the United Nations Act for failing to comply with the sanctions imposed against foreign countries and can face a fine of up to $500,000 or a jail term of up to 10 years.
The aspiration to set up your own import/export business in Singapore may certainly be a profitable one, given Singapore’s prominence as a trading hub. That being said, there are many rules and regulations that you have to be aware of before you can go about setting up such a business. As seen above, you may face drastic financial and penal consequences if you fail to adhere to the rules and regulations regarding import/export of goods and trade sanctions. You may also not be allowed to conduct your import/export business until you are able to meet all the legislative requirements.
In such a situation, it may be beneficial for you to consult one of our corporate lawyers to ensure that your business complies with Singapore’s relevant trading restrictions and sanctions. Your lawyers may also be able to assist you with carrying out the necessary registration procedures to obtain the relevant customs permit for your import/export business.
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