Bill to amend Free Trade Zones Act 1966 passed to implement new framework for licensing FTZ operators and other changes

30 October 2023

On 4 October 2023, the Free Trade Zones (Amendment) Bill (“Bill”) was passed in Parliament.

In his speech at the second reading of the Bill, Senior Minister of State for Finance Chee Hong Tat explained how the amendments to the Free Trade Zones Act 1966 (“Act”) will enhance the regulation and control of goods that flow through Singapore’s free trade zones (“FTZs”) to keep pace with evolving threats and the increasing sophistication of illegal actors.

Key amendments 

The Bill proposes the following three key amendments to the FTZ Act:

  • New licensing regime for FTZ operators: In the past, FTZs were operated by public bodies that were appointed by the Minister for Finance. As these entities have since been privatised, a licensing regime is more fit-for-purpose. A licensing regime will enable the Government to specify and enforce the necessary requirements to ensure the overall security of FTZs and improve the regulation of the flow of goods and persons within the FTZ.

For example, FTZ operators will be required to put in place the necessary security structures, such as CCTVs and fences, and provide assistance to officers of customs in their performance of their official duties. The Minister explained that FTZ authorities have already put many of these measures in place today, and the amendments will formalise these requirements in legislation. FTZ operators will also need to screen persons who intend to operate in the FTZ, and manage the sub-leasing of premises in the FTZ. They will also need to report and disclose relevant information on suspicious or dangerous goods or persons within the FTZs to the Director-General of Singapore Customs (“Director-General”).

  • New regulations on cargo handlers and other cargo agents: While cargo handlers and agents will not be subject to a licensing regime, the amendments set out their responsibilities in terms of securing the goods under their charge and data provision. Cargo handlers will be responsible for monitoring and managing the movement of goods handled at their premises within the FTZs, and ensuring their premises are secure. They will also need to report goods that may have contravened the laws of Singapore. Further, cargo handlers and cargo agents will need to provide specified information contained in a bill of lading or airway bill in advance of their entry or transhipment of their goods through Singapore. Currently, only information relating to goods that are imported, exported, or controlled goods that are transhipped is required to be submitted as part of the permit application process. With this amendment, information on all transhipment goods will need to be submitted.
  • Enhancements to enforcement powers of Director-General and officers of customs: The Bill sets out the enforcement powers of the Director-General and officers of customs, and the regulatory actions they may undertake. The Director-General will be empowered to (a) grant, renew, suspend or revoke licences, (b) impose or modify licensing conditions, and (c) order the removal of dangerous goods as well as the detainment of goods for inspection. The Bill will also introduce powers for officers of customs to enter any area within the FTZ and inspect or remove goods within the FTZ. They will also be empowered to request information for the purposes of investigation, witness examination, arrest of any person without warrant, and search of any arrested person.

Other amendments

The remaining amendments to the Bill are operational and administrative in nature. These include amendments to the penalty framework to address non-compliance with the licensing framework, and to allow for compoundable offences in lieu of prosecution.

Reference materials

The following materials are available on Singapore Statutes Online sso.agc.gov.sg and the Ministry of Finance website www.mof.gov.sg: