Introduction to Singapore Customs Presented by Loh Fook

Introduction to Singapore Customs Presented by: Loh Fook Meng ADG (Compliance) Singapore Customs We Make Trade Easy, Fair and Secure 1

Outline • Singapore Customs – About Us • Our Organisation • Our Vision, Mission, Motto (VMM) and Values • Our Roles and Functions • Our Customers and Partners • Our Challenges Ahead Singapore Customs We Make Trade Easy, Fair and Secure 2

What is Customs? According to World Customs Organisation Glossary of Terms: “The Government Service which is responsible for the administration of Customs law and the collection of import and export duties and taxes and which also has responsibility for the application of other laws and regulations relating, inter alia, to the importation, transit and exportation of goods. ” • In Singapore, Singapore Customs (SC) is separated from the Immigration & Checkpoints Authority (ICA) Singapore Customs We Make Trade Easy, Fair and Secure 3

Our Organisation Singapore Customs We Make Trade Easy, Fair and Secure 4

Re-constitution in April 2003 Trade Facilitation Div & Statistics Audit Unit of IE Singapore (MTI) Customs & Excise Department (MOF) Singapore Immigration and Registration (MHA) § Immigratio § Trade Facilitation § Trade n § Registratio Documentation § Rules of Origin n § § § Revenue Collection Customs Documentation Customs Enforcement Tax Suspension Schemes Strategic Goods Singapore Customs (MOF) Checkpoint Clearance § Travellers, Baggage § Cargo, Vehicles Immigration & Checkpoints Authority (MHA) Singapore Customs We Make Trade Easy, Fair and Secure 5

SINGAPORE CUSTOMS ORGANISATION CHART FROM 2 AUGUST 2010 DIRECTOR-GENERAL OF SINGAPORE CUSTOMS Mr Fong Yong Kian Head Internal Audit Mr Chua Liang Huat SENIOR ASSISTANT DIRECTOR-GENERAL (TRADE) Mr Lim Teck Leong ASSISTANT DIRECTOR-GENERAL (TRADE) Ms Teo Siew Lan Head Procedures & Systems Mr Winston Tay Wee Hua Head Schemes & Licensing Mr Teh Thiam Siong Acting Head Client Relations Ms Patricia Poh Pei Head Trade Strategy Ms Fauziah Abdul Sani Head Trade Security Ms Karen Lim Shu Head. Wen Tariffs & Trade Services Mr David Foo Ching Yenn ASSISTANT DIRECTOR-GENERAL (COMPLIANCE) Mr Loh Fook Meng Head Permits Compliance Mr Peter Cheah Hock Lye ASSISTANT DIRECTOR-GENERAL (CORPORATE DEVELOPMENT) Mrs Lam Meng Choo ASSISTANT DIRECTOR-GENERAL (POLICY & PLANNING) Mr Lee Tiow Yong ASSISTANT DIRECTOR-GENERAL (CHECKPOINT & CORPORATE SERVICES) Mr Mok Hei Chee Head Checkpoint Services & Investigation Ms Joyce Lim Siok Keow ASSISTANT DIRECTOR-GENERAL (INTELLIGENCE & INVESTIGATION) Mr Lee Boon Chong Head Operations Policy & Development Ms Ivy Chong Head Finance Mr Vincent Leong Head Policy & Research Ms Ooi Chia Miin Head Company Compliance Mr Ho Ann Chuan Head Human Resource Ms Shamala Dhevi Head Planning Ms Tan Bee Lan Head Strategy Mr Alvin Neo Yeow Leong Head Corporate Information Technology Ms Yeo Beng Huay Head Operations Management 1 Mr Aaron Cheong Loong Wei Head Operations Management 2 Mr Long Foo Liew Head Trade Investigation Ms Eo Boon Kian Head Corporate Communications Mr Victor Seah Teck Siong Head International Relations Ms Sung Pik Wan Head Corporate Administration Mr K Chandran Head Intelligence Mr Samuel Ong Guan Kun Head Risk Assessment Mr Goh Yeow Meng Head Competency Development Ms Sumathi d/o Govindarajan Head Special Investigation Mr Yeo Sew Meng Head Suppression & Community Engagement Mr Wan Boon Oon Head Prosecution Mr S Krishnan

Our Staff Profile Total Staff Strength (as of 31 July 2010): 796 Schemes of Service Level of Qualification Singapore Customs We Make Trade Easy, Fair and Secure 7

Our Parent Ministry Departments Statutory Boards Singapore Customs We Make Trade Easy, Fair and Secure 8

Legislations We Administer GST Act Customs Act Owned by MOF Free Trade Zones Act Owned by MFA Chemical Weapons (Prohibition) Act Owned by MTI Regulation of Imports & Exports Act Strategic Goods (Control) Act Singapore Customs We Make Trade Easy, Fair and Secure 9

Our Operating Locations Customs Corporate HQ is located at Revenue House. Customs Officers are also deployed at the following places: • • • Customs Operations Command (COC) Changi Airport Terminal 1 Changi Airport Terminal 2 Changi Airport Terminal 3 Budget Terminal Singapore Cruise Centre Tanah Merah Ferry Terminal Tuas Checkpoint Woodlands Checkpoint Singapore Customs We Make Trade Easy, Fair and Secure 10

Examples of Operating Locations Revenue House Tanah Merah Ferry Terminal Changi Airport T 3 Customs Duty Office Woodlands Checkpoint Customs Operations Command T 3 GST Refund (Landside) 11

Our Vision, Mission, Motto (VMM) Singapore Customs We Make Trade Easy, Fair and Secure 12

Our Vision, Mission and Motto (VMM) VISION MISSION Motto A leading Customs that advances Singapore’s economy by assuring the integrity of the trading system As the guardian of Singapore’s trade, we uphold our laws to build trust to facilitate trade and protect revenue We make trade easy, fair and secure Singapore Customs We Make Trade Easy, Fair and Secure 13

Our Values Integrity Carrying out operations in an impartial and fair manner. Making fair and honest decisions. Upholding honesty and fairness in actions even when it is inconvenient to do so. Teamwork Putting aside personal differences to achieve the organisation’s goals. Sharing knowledge to enhance the work of other officers or branches. Using one’s capabilities or knowledge to help the team to achieve its goal. Commitment Taking the initiative to go the extra mile for customers and colleagues. Putting the organisation’s interests or needs above self. Going beyond job scope to ensure issues are resolved. Dedication to seeing a task to the end. Courage Admitting mistakes readily and taking steps to remedy the situation. Daring to raise controversial ideas so long as they are for the organisation’s good. Responsiveness Anticipating changes and picking up trends, opportunities, risks and threats quickly. Addressing issues proactively, i. e. not waiting for someone else to take action. Acting promptly on enquiries and requests from both internal and external customers. Singapore Customs We Make Trade Easy, Fair and Secure 14

Our Roles and Functions Singapore Customs We Make Trade Easy, Fair and Secure 15

Our Roles

Our Roles Trade Corporate Development Checkpoint Services Policy & Planning Corporate Services Compliance Intelligence & Investigation

Trade Division 5 Branches • Procedures & Systems Branch • Tariffs & Trade Services Branch • Schemes & Licensing Branch • Client Relations Branch • Trade Strategy and Security Branch Singapore Customs We Make Trade Easy, Fair and Secure 19

Single Window for Trade • Handling the administration of Trade. Net® System, including managing vendors and Controlling Agencies Trade. Net® • Trade. Net® - World’s 1 st single-window electronic platform for trade declaration. • Made its debut in 1989 as the world’s first nationwide electronic data interchange system for clearance of trade documentation. The last major system upgrade was conducted in October 2007 (Version 4). Singapore Customs We Make Trade Easy, Fair and Secure 20

Single Window for Trade From this Air Cargo Agents Traders Shipping Agents To this Freight Forwarders Air Cargo Agents Traders Shipping Agents Freight Forwarders Trade. Net® S’pore Customs CA 5 CA 1 CA 3 S’pore Customs CA 1 CA 2 CA 3 CA 4 CA 5 CA 4 Singapore Customs We Make Trade Easy, Fair and Secure 21

Single Window for Trade Singapore Customs [incl National Authority (CWC)] Agri-food & Veterinary Authority Singapore Police Force Central Narcotics Bureau Singapore Civil Defence Force 34 Controlling Units National Environmental Agency Health Sciences Authority Info. Comm Development Authority of Singapore Ministry of Manpower Ministry of Health Singapore Customs We Make Trade Easy, Fair and Secure Media Development Authority International Enterprise Singapore Board

Single Window for Trade Singapore Customs [incl National Authority (CWC)] Agri-food & Veterinary Authority Singapore Police Force Central Narcotics Bureau ü Single form Singapore Civil Defence Force ü Single submission ü Single interface ü Single process National Environmental Agency Ministry of Manpower Ministry of Health Singapore Customs We Make Trade Easy, Fair and Secure Media Development Authority International Enterprise Singapore Board Health Sciences Authority Info. Comm Development Authority of Singapore

Single Window for Trade Characteristics Previous Manual process Trade. Net® Benefit 1. Submission of document Via expensive dispatch clerks/ couriers Electronically from comforts of office (or home) 2. Time of submission Within office hours Available 24 hrs 3. Trips per controlling agency per document At least 2 trips or more NO trips required 4. Copies of document Multiple copies Single copy 5. Turnaround time for approval From 4 hrs to 2 -7 days Within 10 mins 6. Dutiable goods handling Separate documents for customs processing Same electronic document routed to customs for processing 7. Controlled goods handling Separate documents sent to different controlling agencies for processing Same electronic doc routed to controlling agencies for processing 8. Customs duties collection By cheque and cash Automatic bank account deduction 9. Trade Documentation Fee S$10 per document S$2. 88 per application Singapore Customs We Make Trade Easy, Fair and Secure Source: APEC Economies: Breaking down the barriers, Shanghai 2001 (modified)

Single Window for Trade Current Volume & Performance • More than 8, 000 users from 2, 600 subscribers • About 30, 000 declarations per day • More than 9 million declarations annually • Collected over S$7 b duties and GST in FY 2009 • 100% of customs declarations processed and approved via Trade. Net® • 100% of the collections are made electronically through Inter-Bank GIRO • 90% of permits processed within 10 minutes Singapore Customs We Make Trade Easy, Fair and Secure

Single Window for Trade A multi-agency initiative led by SC, IDA and EDB. • A neutral and secure platform that facilitates the exchange of information within the trade and logistics community, and with the government Legend: JP – Jurong Port TX - Trade. Xchange® Singapore Customs We Make Trade Easy, Fair and Secure VAS – Value added Service Providers 26

Helping Our Exporters Grow • Determining Rules of Origin (ROO) for preferential treatment & providing advice on valuation and classification of goods • Leads ASEAN customs authorities to develop the ASEAN Harmonised Tariff Nomenclature (AHTN) • The AHTN is a major step in facilitating trade among ASEAN countries while forging closer economic cooperation Singapore Customs We Make Trade Easy, Fair and Secure 27

Free Trade Agreements (FTA) • SC supports in negotiating the Customs Chapter of the various FTAs. • SC also supports MTI in the rules of origin negotiations. • These work are done to help improve the market access of our exporters. • We have currently 20 FTAs in force. • We collaborate closely with IE Singapore to conduct outreach to exporters to fully benefit from FTAs. • In 2009, companies based in Singapore have enjoyed more than S$700 million in tariff savings. Singapore Customs We Make Trade Easy, Fair and Secure 28

Customs Trade Facilitation Schemes • Promoting and administering customs schemes Temporary Import Zero GST Warehouse Licensed Warehouse Excise Factory Apex Licence Air Store Bond Duty-Free Shop Industrial Exemption Factory Scheme Container Freight Warehouse Scheme Singapore Customs We Make Trade Easy, Fair and Secure 29

Delivering Schemes that Work • Suspending GST - Zero GST Warehouse Scheme • Developing Niche Industries – Temporary Import Scheme • From “Multiple Licences to One” – Apex Licence Singapore Customs We Make Trade Easy, Fair and Secure Business Times, 19 August 2008 30

Securing Supply Chains • Complex nature of today’s trade system means that all components of system are dependent upon one another for safe and secure trade. • The WCO SAFE Framework of Standards secures the movement of global trade in a way that facilitates the movement of that trade. Singapore Customs We Make Trade Easy, Fair and Secure

Securing Supply Chains • National Authority for Secure Trade Partnership (STP) programme • STP provides companies with a framework to guide development, implementation, monitoring and review of company's supply chain security measures • Benefits include enhanced visibility, better branding, less inspection, expedited clearance (under Mutual Recognition Arrangements) Singapore Customs Director-General Mr Fong Yong Kian signing Mutual Recognition Arrangements with Canada Border Services Agency and Korea Customs Service at the WCO Council Sessions in June 2010 Singapore Customs We Make Trade Easy, Fair and Secure 32

Securing Supply Chains APEC Trade Recovery Programme • Endorsed by APEC leaders in Sydney in 2007, APEC Trade Recovery Programme (TRP) establishes principles for ensuring swift trade restoration among APEC economies in the immediate aftermath of a terrorist attack on the global supply chain • Fast trade recovery is of paramount importance to international trade Singapore Customs We Make Trade Easy, Fair and Secure 33

Export Control Exercising control over trade in strategic goods • • • Security and Peace – Preconditions for trade to flourish Prevent proliferation of Weapon of Mass Destruction (WMD) Missile Technology Control Regime (MTCR) (NSG) Strategic Goods (Control) Act regulates trade and transfer in sensitive goods and technology • Adopted Full Lists of the 4 Informal Export Control Regimes • Control with Facilitation – Strategic Trade Scheme • National Authority for Chemical Weapons Convention (NA, CWC) Nuclear Suppliers Group The 4 Informal Export Control Regimes The Australia Group (AG) Wassenaar Arrangement (WA) Singapore Customs We Make Trade Easy, Fair and Secure 34

Our Roles Trade Corporate Development Checkpoint Services Compliance Intelligence & Investigation Policy & Planning Corporate Services 35

Compliance Division 4 Branches • Permits Compliance Branch • Company Compliance Branch • Trade Investigation Branch • Risk Assessment Branch Singapore Customs We Make Trade Easy, Fair and Secure 36

Compliance Framework (2) Deterrence through Effective Enforcement and Penalties (1) Timely Detection of Violations through Risk Management Techniques Customs Compliance Framework (3) Education through Outreach (4) Monitoring Compliance Status Singapore Customs We Make Trade Easy, Fair and Secure 37

Key Roles of Compliance Division • Conducting compliance checks on trade documents • Conducting informed audits on companies customs requirements, and conducing stuffing and unstuffing functions • Conducting investigations into revenue fraud • Assessing the risk level of SC's external business processes and monitoring and targeting of companies for revenue evasion • Setting incentives and penalties to promote voluntary compliance • Conducting outreach and education to enhance compliance capability of trading community Singapore Customs We Make Trade Easy, Fair and Secure 38

Compliance Efforts • In the last 2 years, there has been an increase in the number of parallel importers (PI) and growing market share of Motor Vehicle imports by PI. 2004 2007 2008 No. of Parallel Importers 66 142 187 % of Total MV Imports by Parallel Importers 4% 20% 24% • Suspected cases investigated and errant traders prosecuted in court. • Message sent to parallel importers that fraud will not be tolerated. Singapore Customs We Make Trade Easy, Fair and Secure 39

Errant Traders - Parallel Import of Motor Vehicles Straits Times – 16 Jan 2009 Ca se 1 Singapore Customs We Make Trade Easy, Fair and Secure 40

Errant Traders - Parallel Import of Motor Vehicles Ca se 2 Singapore Customs We Make Trade Easy, Fair and Secure 41

Errant Traders - Parallel Import of Motor Vehicles Ca se 3 Singapore Customs We Make Trade Easy, Fair and Secure 42

Intelligence & Investigation Division 6 Branches • Operations Policy and Development Branch • Operations Management Branch • Intelligence Branch • Special Investigation Branch • Suppression & Community Engagement Branch • Prosecution Branch Singapore Customs We Make Trade Easy, Fair and Secure 43

Key Roles Of Intelligence & Investigation Division • Providing intelligence support • Undertaking functions on strategic and policy issues as well as the development of its computer application systems Focusing on improvements to the investigation and enforcement operations by identifying systemic lapses and recommend corrective actions and guidance Coordinating interdiction of IPR infringing goods at the borders Conducting surveillance and investigations to suppress duty evasion and syndicate smuggling • • • Singapore Customs We Make Trade Easy, Fair and Secure 44

Key Roles Of Intelligence & Investigation Division • Conducting analysis to identify companies suspected of commercial fraud • Conducting risk review and working with stakeholder branches to formulate strategies and implement control measures on risk elements identified • Handling prosecution cases and providing legal advice on arrest and Customs cases. • Driving community engagement to heighten public education and maintain public confidence in the enforcement of customs laws. Singapore Customs We Make Trade Easy, Fair and Secure 45

Contraband Cigarettes Enforcement Incentive to smuggle due to high duty rate on cigarettes and huge price difference compared to neighbouring countries Marlboro retail price/pack (S$) 1. 78 2. 70 0. 92 1. 27 1. 33 3. 51 11. 60 3. 10 1. 58 Singapore Customs We Make Trade Easy, Fair and Secure Source: Philips Morris as @ July 2008 46

Contraband Cigarettes Enforcement Multi-pronged strategies to tackle demand supply side of problem: • Closing regulatory gaps to prevent abuse of customs procedure for smuggling • Risk profiling to interdict smuggling via commercial consignments • Increased quantum of composition sums and having tougher prosecution guidelines • Increased resources to combat smuggling, including engaging CISCO and leveraging on other enforcement agencies • Enhanced technological support for enforcement operations • Publicity campaign against contraband cigarettes • New marking requirement on individual sticks of cigarettes Singapore Customs We Make Trade Easy, Fair and Secure 47

Contraband Cigarettes Enforcement Singapore Customs We Make Trade Easy, Fair and Secure 48

Contraband Cigarettes Enforcement C e as 1 Singapore Customs We Make Trade Easy, Fair and Secure 49

Contraband Cigarettes Enforcement C e as 2 Singapore Customs We Make Trade Easy, Fair and Secure 50

Collaboration with Other Agencies • ICA detects smuggling through checkpoints • Joint operations and intelligence sharing with other enforcement agencies • Coordinate with MOM, ICA and MOE on foreign offenders • Coordinate with NEA, MEWR and ICA on illicit shipments of Environmentally Hazardous Goods Singapore Customs We Make Trade Easy, Fair and Secure 51

Checkpoint & Corporate Services Division 3 Branches • Checkpoint Services & Investigation Branch • Corporate Information Technology Branch • Corporate Administration Branch Singapore Customs We Make Trade Easy, Fair and Secure 52

Key Roles Of Checkpoint & Corporate Service Division • Providing essential customs services at the major checkpoints • Planning and providing IT services to meet the needs of the department and create greater value in customs service delivery • Providing the functions of office administration, facilities management and security Singapore Customs We Make Trade Easy, Fair and Secure 53

Efficient and Customer-centric Checkpoint Services • Providing essential customs services at the major checkpoints • Collection of duty and GST payment from travellers. • Facilitating tourist GST refund of over $125 million in 2009. Singapore Customs We Make Trade Easy, Fair and Secure 54

Our Roles Trade Corporate Development Checkpoint Services Policy & Planning Corporate Services Compliance Intelligence & Investigation

Policy & Planning Division 3 Branches • Policy & Research Branch • Planning Branch • International Relations Branch Singapore Customs We Make Trade Easy, Fair and Secure 56

Key Roles Of Policy & Planning Division • Driving SC's strategic and corporate planning processes and plans, and policy formulation • Conducting policy reviews • Promoting technical cooperation to further national interests • Participating in international/regional customs meetings and Free Trade Agreement negotiations Singapore Customs We Make Trade Easy, Fair and Secure 57

Contributions to International Trade and Customs Community • Chair of APEC 09 Sub-Committee on Customs Procedures (SCCP) • Chair of WCO and APEC Special Group on drafting of Trade Recovery annex to the SAFE Framework of Standards • Chair of ASEAN Customs Procedures and Trade Facilitation Working Group (CPTFWG) Singapore Customs We Make Trade Easy, Fair and Secure 58

Corporate Development Division 4 Branches Ø Communications Branch Ø Finance Branch Ø Human Resource Branch Corporate Ø Competency Development Branch Singapore Customs We Make Trade Easy, Fair and Secure 59

Key Roles of Corporate Development Division • Managing SC’s corporate reputation and facilitating internal and external stakeholder communications. • Managing SC’s monetary resources and providing full range of financial management services • Attracting and retaining the best talent for SC through implementation of effective HR practices • Strengthening SC staff competencies through various competency-based specialised training Singapore Customs We Make Trade Easy, Fair and Secure 60

Internal Audit Branch • Evaluating the adequacy and effectiveness of internal controls and ascertain whether policies and guidelines are complied with. Singapore Customs We Make Trade Easy, Fair and Secure 61

To summarise our roles and functions…. Singapore Customs We Make Trade Easy, Fair and Secure 62

Summary • Trade Facilitation and Trade Enforcement are two sides of the same coin. • Risk management plays an important role in every facet of customs work. • Concept of traffic controls at the highways. Singapore Customs We Make Trade Easy, Fair and Secure 63

Our Customers and Partners Singapore Customs We Make Trade Easy, Fair and Secure 64

Our Customers Trading Community Importers/ Exporters • Manufacturers Freight Forwarders Travelling Community Licensees Arriving Travellers Departing Travellers Approx 90, 000 entities registered with SC to engage in import/export activities. Singapore Customs We Make Trade Easy, Fair and Secure 65

Customer Engagement • 24 X 7 Call Centre (outsourced to Crimson. Logic) • Regular dialogue sessions with traders • Account Managers for traders under various schemes/programmes • Key Customers Programme • Strategically engage and enhance service experience of key customers through assignment of relationship managers • Training the Trading Community: - Customs Competency Programme for Businesses (CCPFB) and Strategic Goods Control Programme for Businesses (SGCPFB) Singapore Customs We Make Trade Easy, Fair and Secure 66

Our Partners Singapore Customs We Make Trade Easy, Fair and Secure 67

Importance of Fostering Partnerships • Greater rapport and understanding of each other’s needs and challenges. • Leveraging on each others’ resources and expertise. • Sharing timely and reliable intelligence and information. • Streamlining existing and/or future working procedures. • Gathering innovative ideas and new growth opportunities for the future. Singapore Customs We Make Trade Easy, Fair and Secure 68

Our Challenges Ahead Singapore Customs We Make Trade Easy, Fair and Secure 69

Singapore’s Success: A World-Class Global Trade Hub • Singapore lives by international trade since its founding in 1819. • Trade has been and will continue to be a key pillar in Singapore’s economy. • In 2009, Singapore total trade volume reached $747 billion. • Ranked 1 st in Ease of Doing Business and Trading Across Borders by The World Bank Report 2010. • Overall, Singapore Customs contributes to Singapore’s trade growth. Singapore Customs We Make Trade Easy, Fair and Secure 70

Our Challenges A Fast-Changing Landscape • International trading environment has become more complex. • Security is a world-wide concern. Singapore Customs We Make Trade Easy, Fair and Secure 71

Our Challenges • Maintaining Singapore’s international competitiveness. • Striking a good balance between being business-friendly and maintaining trust and integrity of our trading system. • Collaborating with other countries to enhance trade security, e. g. through more mutual recognition arrangements to facilitate Singapore’s exports. Singapore Customs We Make Trade Easy, Fair and Secure 72

Thank you Singapore Customs We Make Trade Easy, Fair and Secure 73