SECONDHAND GOODS DEALERS BILL

SECONDHAND GOODS DEALERS BILL: 5.00 pm

The Senior Minister of State for Home Affairs (Assoc. Prof. Ho Peng Kee): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

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Introduction

Sir, although the intent of this Secondhand Goods Dealers Bill to provide for the licensing and control of secondhand goods dealers remains the same as the current Secondhand Dealers Act (SHDA), MHA is proposing to enact a new Bill because most of the sections in the current Act have been amended.

The Secondhand Dealers Act was enacted in 1918 to regulate businesses that deal in the trading of secondhand goods. That is almost 100 years ago. This is because businesses that deal with secondhand goods trading have the potential to be a channel for criminals to dispose of stolen goods - or what is known as fencing. Hence, the need to regulate the secondhand goods trading industry.

The Act has been useful in solving some crimes. Members will know that, in recent years, handphone theft nearly tripled from 1,700 cases in 2001 to more than 4,800 cases in 2005 before falling to about 4,600 cases last year. Police's regulatory control of secondhand dealers, as well as other enforcement measures, has contributed to this improving trend. Apart from intensifying checks on dealers of secondhand handphones, Police compared the leads from cases of handphone theft against the transaction records of dealers. These efforts have improved our success rate in crime solving and this, in turn, has had a deterrent effect on thieves and errant secondhand handphone dealers. Clearly, the Act has been useful in helping Police deal with errant dealers who are responsible for the quick and easy disposition of stolen handphones.

While the intent of the Act remains the same, the crime situation has changed

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considerably over the years. This Bill before the House reflects a refinement of the existing Act to better serve today’s regulatory and investigative requirements. It also seeks to bring it up to date with Police’s current enforcement needs.

Sharper regulatory focus

Mr Speaker, Sir, the new Act will sharpen the focus of the regulatory regime for secondhand goods dealers. We assess that there is no need to subject all secondhand goods dealers to regulatory requirements, such as yearly registration and payment of fees, especially if the items they deal in are of little crime control value.

Hence, whereas the Schedule of the current Act contains a list of goods that are excluded from regulation under the SHDA, that is, a “negative list” approach, the new Act will take a “positive list” approach, that is to say, the new definition of secondhand “goods” in clause 2 of the Bill will cover only items that have considerable value and which have been identified to be common items of theft and easily disposed of to secondhand goods dealers by property offenders. To ensure that we can adjust quickly to changing crime trends, the Minister will have powers to amend this “positive list” by order in the Gazette .

This “positive list” approach in regulation will benefit dealers in secondhand goods that are not in the Schedule. Such an approach is also more pro-business.

But let me assure the House that, with this loosening of control over the industry, Police will still exercise regulatory control over dealers in secondhand goods which are of interest to the Police. Enforcement checks will continue to ensure that errant dealers are dealt with accordingly under the SHDA.

Expansion of scope

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Sir, the second major enhancement to the current regime involves extending the definition of “shop” beyond physical shop premises, to include any place of business, whether a physical place or a virtual one like the Internet. The current Act does not cover dealers operating without a shop. We recognise that many secondhand goods dealers today actually carry on their business via other means, such as on the Internet, or in an open-air setting like Sungei Road. This is unacceptable, as thieves and robbers will simply get rid of their loot through these other dealers who do not have a shop-front.

MHA is hence widening the coverage of the law to include those dealers who do not operate within a shop. However, in keeping with the emphasis on a sharper regulatory focus, only dealers who trade in secondhand goods that are listed in the Schedule will come under the ambit of the Act.

Record-Keeping

Another important aspect of this Bill lies in clause 10, which requires selected dealers to keep transaction records and to submit these to the Police. Such records are valuable in facilitating Police’s work in crime control and investigation. Secondhand goods dealers are also required by law to retain the records for a period of not less than five years and to produce such records for examination by any Magistrate, Justice of the Peace, Licensing Officer or police officer.

Consolidate and update penalties

As the Act has not been amended for some time, the penalties in the SHDA are generally light in today’s context. Apart from the penalty of an imprisonment term of up to three years for dealers in used bicycles or bicycle parts, motor vehicles

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or motor vehicle parts, for failing to keep proper books of accounts, all other offences carry only a penalty of a fine of up to $1,000, and an imprisonment term of up to six months. These penalties are insufficient in today’s context as revenues of dealers’ trade are considerably higher. The law will then lose its impact, if it poses little deterrence.

Using the Pawnbrokers Act as a benchmark as the two Acts are similar in intent and purpose, MHA is consolidating all the penalties in clause 18 of the Bill, which imposes a stiffer general penalty of a fine not exceeding $20,000 or imprisonment for a term not exceeding 12 months, or both, to any person convicted of an offence under the proposed Act or its Rules. As this is only the maximum amount of the fine, the court will have greater leeway to impose the appropriate punishment in any particular case.

Composition of offences

Clauses 18 and 19 give Police more powers in bringing errant dealers to task. But, as not every case is serious enough to be prosecuted in court, the new Act will empower the Licensing Officer to compound any such offence prescribed as compoundable by the Minister, with a composition fine not exceeding $2,000. This is in line with the process Ministry of Law started two years ago to make some offences, where appropriate, compoundable.

Conclusion

Mr Speaker Sir, enacting this Bill will mean that, for a start, more than 900 existing dealers would no longer be licensed under the Act, as they are not currently dealing in goods in the Schedule or the “positive list”. This is in line with the policy to reduce regulatory controls on businesses. Police will focus their control over secondhand goods dealers who trade in high-end or profitable secondhand goods, using the new “positive list”.

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Sir, in conclusion, the Government, through this new Act, is taking another important step to help ensure that our legislation keeps pace with evolving trends so that we can keep crime under control whilst allowing businesses as much room to operate as possible.

Sir, I beg to move.

Question proposed.

5.10 pm

Dr Teo Ho Pin: Mr Deputy Speaker, Sir, I rise in support of the Bill. The proposed Bill will provide a comprehensive legislative framework to regulate the trading of secondhand goods in Singapore, and prevent the sale of stolen goods through secondhand dealers. Sir, the rise in prices of consumer goods and the promotion of reuse or recycling of consumer goods for environmental protection reasons have created a market for secondhand goods in Singapore. This is especially so for secondhand goods such as precious metals, jewellery, computers, electronic devices, and antiques.

This growth in the secondhand goods market has at the same time also provided a convenient channel for stolen goods to be traded in secondhand goods shops or through the Internet. Thus, it is indeed timely to update the current Secondhand Dealers Act which was enacted in 1918 and to take into consideration the new range of secondhand goods, the avenues where secondhand goods are transacted, and the prevention of stolen goods being transacted in the secondhand goods market.

Sir, the proposed Bill has placed stringent measures to regulate secondhand goods dealers in terms of licensing, keeping proper records, facilitating Police

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investigation, and penalty regime. But there are certain shortcomings in the Bill with regard to the impact of the Bill on cost of business, control of secondhand goods shops, keeping of proper records, retention of secondhand goods , unfair practices, and protection of consumers purchasing secondhand goods.

(1) Cost of business and secondhand goods dealers

Sir, the proposed Bill will increase the business cost of secondhand goods dealers as there will be licensing fee, licence renewal fee, transfer fee, and cost of keeping proper records for five years. In addition, dealers are bound by the Act to provide information at their expense to facilitate Police investigation. Sir, I wish to ask the following clarifications from the Minister: (i) how much is the licensing fee as compared to the present fee; (ii) is the licence fee applicable for one shop outlet or multiple shop outlets for the same firm; (iii) what is the period of the licence; (iv) how much are the renewal and transfer fees; and (v) whether there are procedures and prescribed forms to ensure the standardisation of keeping proper records in English such as a master register of secondhand goods in possession, and those transacted stating the time at which and the person from whom he purchased or received such goods, including their particulars?

Sir, I propose that the Bill provide a standard procedure and the use of prescribed forms so as to ensure compliance, reduce business cost and facilitate Police investigation.

(2) Control of secondhand goods shops

Sir, licensing will ensure proper control of the secondhand goods dealers and the secondhand goods market. To further facilitate the enforcement of licensed dealers, I propose that we should include a clause highlighting the need for

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secondhand goods dealers to display their licences in a conspicuous place in their shops or sale outlets. These signages should also be of a certain size and type as prescribed by the licensing authority displaying such words as "Licensed dealer in secondhand goods". The display of licence and signage will also protect consumers who wish to purchase secondhand goods from authorised secondhand dealers.

The growth in Internet transactions, both locally and overseas, has made it challenging to control the sale of secondhand goods on the Net. I would like to clarify with the Minister as to how this proposed Act will regulate Internet sale of secondhand goods, especially for auction websites, where not much information of both sellers and buyers are needed for the transactions. Such Internet transactions may provide the loopholes where stolen goods can be channelled for disposal.

Sir, I wish to seek clarifications from the Minister as to whether licences are required for individual stall operators of flea market, trade fairs and ad hoc car boot sale operators, including community-based organisations.

(3) Keeping of proper records

Sir, the keeping of proper records is a costly process but a necessity for control purposes. In Singapore, many secondhand goods dealers are small and medium enterprises. Many do not have the resources to modernise their operations, such as using information technology to keep track of transactions and inventory control. Thus, the requirements of the Bill to keep five years proper records will have significant impact on these businesses making it difficult for them to comply.

Sir, I would propose that the Ministry spell out clearly the format and information required in keeping proper

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records for the purpose of crime prevention and investigation so that secondhand goods dealers can comply without undue financial commitments. In addition, the Ministry should also take this opportunity to encourage secondhand dealers to upgrade and computerise their operations and provide appropriate Government grant through SPRING Singapore to support these SMEs. The upgrading of business practices of secondhand goods dealers will also benefit the Police Force in its crime prevention efforts.

(4) Retention of secondhand goods

To deter the transaction of stolen goods and ensure recovery of such goods, it is necessary for the Act to specify the retention of certain specified secondhand goods, especially those which can be disposed of easily, for a certain period such as one month. There should be provisions in the Act to require licensed dealers who acquire secondhand goods other than from another licensed dealer to retain such goods in possession for a minimum period before reselling them or making modifications to the goods. This will provide more time for Police to effectively investigate and recover stolen goods. In this aspect, may I ask the Minister how effective is the Police in helping people to recover stolen property? If the recovery rate is low, we should put in place more measures in the Act to facilitate the recovery of stolen goods.

(5) Unfair practices

Sir, clause 11 of the Bill requires the secondhand goods dealers to provide information of stolen goods or lost secondhand goods to the Police upon notification. Failure to do so is an offence under the Act. This requirement is indeed very onerous on the dealers, especially when they have to deal with thousands of secondhand goods transactions and

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stocks, especially for small items such as handphones or electronic devices.

In practice, it may be difficult for the dealers to provide the required information on time to facilitate Police investigation or it will cost the business a lot to comply with every Police's request under clause 11. This practice, if frequently implemented, will be unfair to the dealers as their business operations will be adversely affected. I would propose that this clause be implemented with caution, and should only apply in situations where there is sufficient evidence that dubious dealers are deliberately concealing information on secondhand goods.

Sir, instead of penalising dealers for not collaborating, I would urge the Ministry to consider incentivising dealers who furnish information resulting in the solving of crimes. These good efforts by the dealers can be appropriately rewarded or recognised when renewing their licences. In this way, we can further encourage partnership between the Police and secondhand dealers in crime prevention and increase the chances of recovery for stolen goods.

(6) Protection of consumers purchasing secondhand goods

Sir, the proposed Bill does not offer any protection to consumers buying secondhand goods. While we practise the caveat emptor principle, the secondhand goods market is a complex market where consumers can be easily conned into purchasing stolen goods or misrepresented into paying new goods prices for secondhand goods.

To further protect consumers, I would propose that the licensing authority should maintain a directory of licensed secondhand goods dealers on its website so that consumers can authenticate these

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dealers when purchasing secondhand goods. The authority should also display dealers whose licences have been revoked or suspended. This will prevent such dealers from operating in our market and conning our consumers. I wish to ask the Minister what measures are in place in the Bill to protect consumers of buying secondhand goods.

Sir, I support the Bill.

Mr Lim Biow Chuan (Marine Parade): Mr Deputy Speaker, Sir, I just wish to ask the Senior Minister of State whether it is intended for secondhand goods dealers like karung guni men who deal occasionally with the goods listed in the Schedule of the Bill to be registered under this Bill. If so, bearing in mind their low educational qualifications, whether any form of assistance would be given to them to enable them to comply with the licensing requirements under the Act.

Assoc. Prof. Ho Peng Kee: Sir, I thank both Dr Teo Ho Pin and Mr Lim for their comments and, in particular, Dr Teo who has made some points which will enable me to explain how this Act will work out.

First, of course, this is not a new Act. This is an Act which has been in place for some time, but too long and therefore we are replacing it. When we look at how to improve the workings of the Act, we look at what is happening on the ground, at any loopholes that need to be filled up and, yet, at the same time to maintain, like I have said, a business environment that is friendly. In other words, one key focus of this Act is really to enforce with a lighter touch. So let me reiterate what we have done which is essentially working with a positive list. This makes it very clear that only those goods which are of interest to Police, and if you look at the Schedule, there are nine of them, will be regulated. In fact, the old Act had items, such as gunny bags, sail cloths,

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canvas, kerosene tins, oil drums and other similar empty receptacles, wooden and tin lined boxes and cases, and so forth. These are probably some of the materials that the karung guni men will deal in. So to modernise it, we look at what goods ought to be covered. This is number one. Already, with this approach, out of the 2,700 currently registered licences being issued, 900 licences would not need to be taken out. So we are reducing that straightaway.

In addition to that, the current Act in fact also provides an exemption scheme. In other words, currently, the approach taken by Police is that if some other Act already covers you, for example, the Pawnbrokers Act, because the intent of the Pawnbrokers Act is also to include people who may leave goods there and these may be stolen goods too, you will not be covered under the Moneylenders Act. But Police tells me that in working out this new regime, what they intend to do is to look at the track record of the licensee. If he has a good track record, they are prepared to exempt him from the licensing requirement. In other words, he need not pay the licence fee, but he would be required to notify Police of the fact that he is in business and he would agree to submit information as and when required. We have tried the exemption approach for various other regimes like the massage parlour scheme where we want to be able to also reward good conduct. So those who already have a good track record need not be burdened with the regulatory scheme. That is the first point.

Therefore, the question of business cost should be seen in this context. We are not there to increase business cost. In fact, we are very mindful of business cost. And that is why the fee regime will be retained. Currently, it is $150 for the whole year. It will be so. And in fact, if you look at the current Act, already the processes of transfer, renewal, and so

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forth, are there. So the current regime will stay. Indeed, there is an improvement because under the current scheme, the licence is taken to start from 1st January to end on 31st December. So if a new person comes on board in June, he has to renew on 1st January the following year. But now, with more flexibility, it will be one calendar year from the time the person is issued with a licence. That is why I am not minded, for example, to take up the suggestion of Dr Teo's that may in fact add to business cost. For example, if you say, "Why not require the dealer to keep the goods for one year?", that would mean that he would have holding cost; he would have compliance cost; he would have monitoring cost. That is why I do not think we need to do that. But I will show that by one or two things that we have done, the plight of consumers who may have lost goods and indeed the plight of consumers who may buy secondhand goods which are stolen will be somewhat ameliorated.

Why do I say this? This is linked to the second point which is the format of the reporting structure. Dr Teo very rightly pointed out that requiring dealers to keep information is important. But of course the framework that Police imposes must be reasonable. Five years is reasonable because, like I have just mentioned in my earlier speech in this House, amendments have been moved to standardise record-keeping periods in various Acts to five years. I think it is fair to ask the secondhand goods dealers to keep records for five years.

The format, again, will be a simple one. I take his point that if you want people to keep information and if you want the dealers to submit information as and when required, it should not be a very complicated and complex field. So Police has got that clearly in mind. In fact, he made a very good point too regarding whether or not we should encourage the secondhand goods dealers to submit

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through online. Of course, we are mindful that not all secondhand goods dealers are sophisticated. But Dr Teo urges that Police should take this opportunity to maybe work with SPRING Singapore to get more of them to be computer literate and to maximise and leverage on the benefits of computerisation. I think that Police can do. But the point of keeping it simple, I think, is important. Therefore, Police intends not just to have one language, but the explanation will be in four languages with the submission in English. But the dealers would know what to submit, as the explanation to them is given in four languages.

An additional important piece of information which Police would require that is different from the current position will be the identity of the buyer. Currently, it is not required. Currently, the focus is more on the seller - who the seller is, and so forth. But this is part of more effective tracing. So it is not so much whether the goods are physically there. But if they are not, who bought them. Hence, there will a new requirement where the identity of the buyer will also be required. Hopefully, this would assuage some of the concerns of Dr Teo.

Indeed, he is right in that one other area that we have to now fill up is this new area that has blossomed and bloomed, which is trading on the Internet. Currently, the Act, being framed in 1918, only covers physical shop fronts. So Police will take the opportunity to also fill up this gap. Every dealer who deals in secondhand goods, as set out in the Schedule, will have to apply for a licence. If they are not sure, then I would urge them to check with the licensing unit. There is a police licensing unit general enquiry line, 68350000. Basically, Police will be very friendly. They are not there to catch you off guard. They want to

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help you because some people may not be certain or sure whether they need a licence. And indeed, Dr Teo mentioned some of these. What if you just want to buy and sell your own things online, for example, you are occasionally a person who likes to refresh your wardrobe, will you be caught? Or a flea market, I know that some of our friends set up shop at Tanglin Mall fortnightly. I do not know whether it is first and third week or second and fourth week where you can set up shop and sell things. Or some of the trade bazaars that now dot the island. As a general guide, a person who sells a fairly large amount of goods, especially those of the same type, like handphones, and with some regularity, not once off, that means frequency of trade and especially if you are not selling your own goods or not buying goods for your own consumption, then you will probably be required to obtain a licence. But if you are not sure, just check. So the once-off guy who sells his own goods, I think he need not fear.

Sir, I have covered business cost. I have covered form of reporting. I have covered Internet transaction. I have also covered this point about whether you want to keep for one month.

One or two other points that I will ask the Police to consider will be, for example, the requirement to fix the licence on the shop front; also a directory to be kept online of licensees who have valid licences, especially those which have been revoked, although the Police tells me that, in fact, revocation is very rare. But I think the Member's point is that when you are dealing with a person selling you secondhand goods, you want to make sure that this in fact is a bona fide seller and records will be kept. That is fair enough. I will ask the Police to consider that.

Question put, and agreed to.

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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. - [Assoc. Prof. Ho Peng Kee].

Bill considered in Committee.

Assoc. Prof. Ho Peng Kee:

The Chairman: The citation year "2006" will be changed to "2007", as indicated in the Order Paper Supplement.

Clauses 1 to 25 inclusive ordered to stand part of the Bill.

The Schedule ordered to stand part of the Bill.

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