CUSTOMS (AMENDMENT) BILL

Order for Second Reading read.

The Parliamentary Secretary to the Minister for Finance (Mr Koo Tsai Kee): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Customs (Amendment) Bill 1996 seeks to amend the Customs Act to:

(a) provide for the operations of TradeNet;

(b) allow preservation of records in alternative forms (eg, in electronic form);

(c) prohibit the disclosure of information declared by traders;

(d) combat cigarette smuggling; and

(e) facilitate the administration of the Act.

Provide for Operations of TradeNet

Sir, TradeNet is the electronic data interchange (EDI) system that is currently used for the submission, processing and approval of Customs permits. Using TradeNet, traders can apply for permits for their imports, transshipments, and exports, and pay their duties through electronic means. At present, 99.9% of Customs permits are processed through TradeNet.

The Customs Act now needs to be amended to provide for:

(a) the setting up and operation of TradeNet;

(b) the transmission of documents required by the Customs Act through electronic means;

(c) the admissibility and evidential value of documents generated through the computer service;

(d) making the unauthorised modification of any data or program for the purpose of evading tax or duty an offence;

(e) the appointment of any independent record keeper who will keep a record of all the electronic notices and transactions made through the computer service for a specified period of time. This period of time will be prescribed in the regulations; and

(f) the periodic review of the operations of the computer service provider. Clauses 2, 4, 6, 8 and 15 amend sections 3, 90A, 92(1), 96 and 130(A) of the Act to effect these changes.

The Ministry of Finance has adopted a consultative approach in drafting the TradeNet provisions. Relevant agencies, including the Law Society of Singapore, the Law Faculty of NUS, Law Reform Committee, National Computer Board, the Trade Development Board, Singapore Network Services Pte Ltd, and the various trade associations and Chambers of Commerce were consulted. Their inputs have been incorporated into the Amendment Bill.

Preservation of Records

The Act has been amended to allow books of account, registers, stock books and other records to be preserved or kept by such means as the Director-General may approve. This would allow records to be kept in electronic or other forms. Such records, or documents forming part of the records, will be admissible as evidence only if in accordance with the Evidence Act. Clause 4 inserts a new section 90B to provide for this change.

Prohibition Against Disclosure of Information

Currently, there are no provisions in the Act to prohibit the disclosure of information which traders are required to furnish to the Customs and Excise Department under the Act. The Department had relied on the provisions in the Regulation of Imports and Export Act to reject requests for information. Nevertheless, it is desirable for the Department to have a non-disclosure provision under its own Act. In addition, certain information, such as duty payments made by traders or duty exemptions granted to traders made under the Customs Act, are not covered under the Regulation of Import and Export Act. The Minister has therefore introduced provisions in the Customs Act to prohibit the disclosure of information to protect traders' interest. Clause 4 inserts a new section 90(D) to provide for this. Combat Cigarette Smuggling

Cigarette smuggling has been rising over the last few years. The number of cigarette smuggling cases detected had surged from 36 in 1990 to 177 in 1995. The quantity of duty-unpaid cigarettes seized by the Customs and Excise Department had also increased from 300 kg in 1990 to 20,300 kg in 1995. To deter cigarette smuggling, the penalties for smuggling of cigarettes exceeding 2 kg would be enhanced by providing a higher fine and longer terms of imprisonment for both first time and repeat offenders. In addition, severe penalties have been provided for convicted financiers who are masterminds of smuggling syndicates. Clauses 12, 14 and 15 amend sections 119, 130 and 130(B) of the Act to effect these changes.

To help the Customs and Excise Department trace offenders who are not caught red-handed in the commission of the offences, the Act has been amended to shift the burden of proof onto the owners/hirers of vehicles or lessees/tenants of premises used in smuggling attempts, to compel them to disclose their knowledge on the offenders concerned in order to exculpate themselves. Clause 11 inserts a new section 115(A) to provide for this change.

Amendments to Facilitate Administration of the Act

The Minister has also made the following amendments to facilitate the administration of the Act:

(a) allow Customs officers to conduct field auditing at a trader's premises, to obtain documents and other records, and to inspect computers and associated devices. This is provided in clauses 4 and 9.

(b) allow Customs Officers to demand for travelling documents or other forms of identification of travellers. This is provided in clause 5.

(c) legalise the operations of the Green and Red Channels at the various checkpoints. This is provided in clauses 2 and 7.

(d) make it an offence for any person to resist arrest or refuse to produce documents as required. This is provided in clauses 13 and 16.

(e) allow the Magistrate's Court to impose the full penalty under the Act . This is provided in clause 10.

Sir, I beg to move.

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. -- [Mr Koo Tsai Kee].

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