Customs (Amendment) Bill

3.39 pm

Order for Second Reading read.

Mrs Josephine Teo: Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

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.

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 2 kg 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.

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.

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.

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

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.

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 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.

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

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.

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.

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 to 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.

We will also introduce a provision to facilitate the implementation of the Compressed Natural Gas (CNG) duty. In Budget 2009, we announced that CNG will be dutiable from 1 January 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.

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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.

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.

Question proposed.

3.47 pm

Assoc Prof Fatimah Lateef (Marine Parade): Sir, this Bill is an important one. It impacts trade flow and the movement of people. With the amendments, it is hoped it will enhance our border management and improve the ability to collaborate more with the other agencies, especially when dealing with issues related to national security, public health and safety. I do, Sir, have a few points to raise.

One, to what extent is the Singapore Customs investing in new technology and how are they adapting to the higher and more sophisticated technology of today in terms of training, skills enhancement and information technology?

Pertaining to section 31, it is stated that the Minister may prescribe the operator of authorised pier or place to comply with the Director-General's instructions. Now, will they be given ample notice and sufficient preparatory time as this may have an effect on their day-to-day operations which may require diversions? It will also be good to clarify this more precisely, for example, the circumstances under which the Director-General may prescribe the requirements and restrictions.

On sections 51, 63, 66, 82 and 143, Sir, pertaining to the refund clauses moving to subsidiary legislation, it would have been good to have drafted the subsidiary legislation for the refund clauses for licence fees before the draft amendments to the Customs Act are legislated. This way we can also gather inputs and comments from the traders as well as the public.

On clause 14, Sir, which has a new section 125A inserted on the issuance of a prescribed notice from Customs officer instead of having to go through courts, it can certainly expedite the process of issuing summonses. But does it carry the same weight? Does it mean it is easier to appeal against as it is not issued by the courts and will these prescribed notices be allowed to be compounded? In that same section, Sir, it would be clearer if provisions for minor offences and its applicability can be illustrated as examples. Also, if these minor offences would affect the trade first grading band of companies, it should at least be transparent. How?

On clause 19 which empowers the Minister to make certain regulations, one of these relates to the World Customs Organisation (SAFE) or SAFE framework of standards to facilitate and secure global trade. Can the Minister explain the rationale for this? Are there any formal agreements with our active trade partners?

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Sir, globally there are also International level alerts such as The Red Flag Indicators and The United Nations Security Council Sanctions. How will these be tied in with the WCO?

One more issue, Sir, is how does Customs officer handle someone with an infectious disease at our borders? Are there SOPs, including cooperation with medical personnel? Do they have to be activated for formal assessment? And do we have isolation facilities or rooms provided to temporarily hold these people?

Finally, Sir, I also support the fine-tuning of clause 17 which amends section 128L(2) and (4) pertaining to relevant tobacco products. In fact, I would like to express my vote of thanks to the Customs officers who have been very proactive especially in my constituency pertaining to this matter. I hope they will continue their proactive work as it is much needed. With that, Sir, I support the Bill.

3.51 pm

Mrs Josephine Teo: Sir, first let me thank Assoc Prof Fatimah Lateef for her comments and queries. Sir, to the first question on the use of information technology, indeed, to keep up with the times and to tackle new challenges, Singapore Customs has had to intensively leverage on IT to enhance operational effectiveness and to better serve the trading community. In fact, this year, Customs launched Document Exchange or Doc X to enable authorised business partners to share documents securely and easily. On 1 January 2012, very soon, Customs will be launching version 4.1 of TradeNet, the latest version of Singapore's electronic data interchange system, for the clearance of trade documentation. Users who are familiar with TradeNet will know that it is not only well accepted, it is regarded in the international community as one system that has contributed greatly to the efficiency of our trade clearing procedures. These are just some examples of the continuous efforts made by Customs to stay abreast.

As to the Member's important question on how Singapore Customs keeps up with international alerts, yes, it actively monitors the relevant UN decisions and sanction list. When a trade-related sanction is imposed by the UN Security Council, Singapore Customs enforces it through compliance and audit checks on companies trading in strategic goods to ensure that Singapore fulfils our obligations. Customs officers also conduct frequent outreach to keep the trading community informed of new developments and key issues so that they, in partnership with Customs, can help to ensure that our trade flows remain secure. Singapore Customs performs dual roles in trade facilitation and supply chain security. It also works closely with other Government agencies, including the Immigration and Checkpoints Authority (ICA) at the border checkpoints to maintain the integrity of our trading system and to facilitate legitimate trade.

The Member has raised a number of queries that really relate to the ICA's purview, for example, questions on bio-security and infectious diseases control at the checkpoints. These are perhaps better addressed by the ICA. So may I suggest to the Member that a PQ be filed so that a more comprehensive response can be given? This is also the case for some of the detailed clauses that at the implementation stage will benefit from fine-tuning. We would be very happy to engage the Member on those matters.

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Finally, I thank the Member for acknowledging Customs' effort to combat tobacco-related offences. I thank her also for supporting the Bill.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. − [Mrs Josephine Teo].

Bill considered in Committee; reported without amendment; read a Third time and passed.