The anti-money laundering framework for precious stones and metals dealers in Singapore
| DOI | https://doi.org/10.1108/JMLC-07-2021-0074 |
| Published date | 20 August 2021 |
| Date | 20 August 2021 |
| Pages | 691-699 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Vincent Ooi |
The anti-money laundering
framework for precious stones
and metals dealers in Singapore
Vincent Ooi
Yong Pung How School of Law, Singapore Management University,
Singapore, Singapore
Abstract
Purpose –Precious stones and metals have commonly been used throughout the world as a conduit for
terrorism and money laundering activities. Such illicit use of these assets has called for its much-needed
attention from a regulatoryperspective. This is particularly relevant in a financial havensuch as Singapore.
Accordingly, the purposeof this paper is to explore how several of the most common trading and investment
activitiesinvolving precious stones and metals in Singapore are regulated.
Design/methodology/approach –The research explores activities include the trading of –the storing or
custodising of –and the current available savings plans involving the use of precious stones and metals. It is based
mainly on information collected from various legal sources such as books, domestic legislation and international
papers issued by the Financial Action Task Force and the Asia Pacific Group on Money Laundering.
Findings –With the author’sfindings,the analysis may prove useful for businesses seeking to navigate the
regulatory landscape for precious stones and metals in Singapore, for investors seeking to understand the
protection offeredto them under the regulatory framework and for other jurisdictions seekingto evaluate and
refine theirexisting framework for regulating preciousstones and metals.
Originality/value –To the author’s knowledge, this is the first substantive academic study which
analysesthe regulatory landscape for the use of preciousstones and metals under the Singapore Law.
Keywords Singapore, Regulation, FATF, Anti-money laundering, Precious stones and metals
Paper type Research paper
1. Introduction
Precious stones and metals (PSMs) often have high monetary values relative to their size. They
are mostly fungible to some extent, easy to transport without a ttracting too much attention and
are generally readily convertible to cash [1]. These characteristics make them attractive conduits
for money laundering activities, creating the need for some kind of regulatory framework to
monitor their transfer and sale within and between various jurisdictions. Traders who
commercially buy and sell PSMs are generally subject to some form of regulation. For example,
dealers in the UK are subjected to duties of disclosure under the Terrorism Act 2000, where
dealers must, if they believe or suspect that an offense of money laundering (ML) or terrorism
financing (TF) is conducted with the use of PSMs, report the suspicion to a constable as soon as
is reasonably practicable [2]. In Australia, dealers of PSMs would also be subject to the anti-
moneylaundering(AML)andCounter-terrorismfinancing Act 2006 [3], with the similar duties
of disclosure and other due diligence obligations. Singaporean PSM dealers are subject to
similar obligations as in the UK and Australia. They are also required to apply for licenses to
operate their trade under the Commodity Trading Act [4]. However, a complication arises
The author is extremely grateful to Ow Kim Kit and Yap Teck Chai for their insightful comments
and to Lee Da Zhuan for his excellent research assistance.
Precious
stones and
metals dealers
691
Journalof Money Laundering
Control
Vol.25 No. 3, 2022
pp. 691-699
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-07-2021-0074
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