Singapore's Proposed Amendments to Free Trade Zones Act Aim to Tackle Illegal Trade

On October 4, the Free Trade Zones (Amendment) Bill 2023, which makes consequential amendments to the Free Trade Zones Act 19987 and the Customs Act 1960, was passed in Parliament. In a statement made by Senior Minister of State for Finance Chee Hong Tat, he emphasized that the changes are necessary amid growing concerns over the exploitation of Singapore's 10 free trade zones (FTZs) through illicit activities, including weapons proliferation, environmental crimes, and trade-based money laundering. The proposed amendments aim to make the following changes: strengthen the licensing regime for FTZ operators, introduce new regulations on cargo handlers and agents, and provide the Director-General and customs officers with more enforcement power. Furthermore, the proposed amendments will make it more difficult for companies to provide false or inaccurate information on cargo shipments, increasing the overall visibility of goods passing through one of the world’s largest transshipment hubs.
 
While some Ministers of Parliament expressed concerns that the amendment could potentially impact business costs, operational efficiency, and Singapore’s overall competitiveness as a trading hub, SMS Chee ensured that the amendments were made in consultation with industry and relevant stakeholders, ensuring a pro-business environment that is in line with international best practices. While companies operating within FTZs will not be strongly affected by the changes as opposed to FTZ operators, cargo handlers, and agents, industry players must review these changes and carefully consider how they will impact existing workflows.