Mr Speaker, Sir.

Thank you for allowing me to join this debate on the Free Trade Zones (Amendment) Bill.

Singapore's 9 free trade zones in the ports and airport are an important node of business and trade for the Singapore economy to thrive and prosper safely without any hindrances and threats. Singapore’s free trade agreements or FTAs, investment guarantee agreements and the Double Tax Avoidance Agreements also allow for smooth trade with many countries in the world. In particular, this piece of legislation is of utmost importance for both SMEs as well as larger companies, as it is all about the ease of doing business in Singapore. It also gives a very clear and loud message to the investor community that Singapore means business in the proper operation of its ports of entry for goods and services. During my speech, I will highlight the importance of this legislation to global trade, the benefits that small and medium enterprises can gain from the legislative changes and some of the concerns that SMEs have shared with us.

Free Trade Zones in Singapore were first established in 1969 to facilitate trade in dutiable goods. And the Free Trade Zones Bill was last amended in Parliament in 2014. According to the Financial Action Task Force, FTZs are vulnerable to trade-based money laundering through the misrepresentation of the price, quantity or quality of imports or exports, phantom shipment, and falsification of invoices. Much has happened in the last nine years, and it is timely to update this legislation keeping in line with recent developments in the global trading.

Let me now turn to the key thrusts of the bill.

In my view, this amendment removes legal uncertainty by creating security measures that ensure that goods passing thorough Singapore follow very stringent checks enforced by Free Trade Zone authorities. I believe these amendments also provide a stronger framework for preventing money laundering and financing for terrorism.

Now to some key aspects of proposed amendments:

1. Licensing of FTZ operators. The amendment allows many administrative responsibilities to shift to licensed FTZ operators, for more efficient movement of goods.  The new tenets that allow operators and cargo holders to delegate authority are reflective of current industry practices. The amendment seeks to strike a balance enabling both better oversight of goods flow and ensuring efficient movement of goods.
2. The proposed amendments provide more powers to the officers of customs to investigate and arrest any parties suspected of illegal activity- In providing clear definition of criminal offenses it allows the Director General and staff to enforce the law with increased penalties for offenses.
3. This amendment also allows for a smoother transmission of information and documents–while providing greater flexibility to staff.

I urge our Customs and Excise Department staff to work closely with and engage FTZ operators and key stakeholders prior to implementing this streamlined transmission regime. I also want to highlight that the Staff working in Free Trade Zones play a key role in the detection, deterrence and prevention of money laundering and financial crime.

To help staff to better appreciate the magnitude of these risks’ businesses will need to develop a training roadmap targeted for the staff performing various functions in the Free Trade Zones. Our SMEs also have their concerns, and I would like to address their participation regarding this amendment.

SMEs will require a longer period to adjust to the main tenets of the new amendments. SMEs may simply lack the capabilities and resources to take a more active role in enforcement and administration, which will make it difficult for them to take advantage of the new powers afforded for FTZ license operators and cargo handlers. SMEs will also need to understand the legal powers vested in FTZ authorities and their needs-based information-gathering procedures. As a vibrant trading hub, much of the work being done at the FTZs is round the clock, and SMEs may not have the scale to manage their lean workforce while balancing additional training needs.

Perhaps the Minister can elaborate the plans in place to assist our SME’s to help them implement these changes? The revised legislation also stands to bring many benefits for businesses.

1. The new amendment allows more delegation of authority by FTZ operators and cargo holders. This may benefit the SME’s as they can outsource certain tasks.
2. There is also a very clear list of what constitutes an offence under the Free Trade Zones Amendment Bill- what is permitted and prohibited, the severity of each offence and sentencing considerations.
3. The legislative changes also create a safer environment for new market players and smaller businesses as goods passing through Singapore’s FTZs will require stringent checks done by FTZ authorities.
4. For SMEs aiming for global presence the free trade principles of this amendment will safeguard their operations and increase their brand presence internationally. This may also push them to adopt more digital technology.

In conclusion, Sir, strong, well managed free trade zones are important to allow our country to remain competitive regionally and internationally. These amendments will reinforce high standards of compliance that will not only maintain Singapore’s strong standing as a trade hub but also attract foreign investment that has confidence in our due diligence. It is evident to me that these amendments will facilitate further development of our Free Trade Zones and hence I support this Bill.

Thank you.