AML/CFT Compliance for Jewellery and Watch Dealers in Singapore: What You Actually Need to Do

The Compliance Reality for Singapore Watch and Jewellery Dealers

You've registered with MinLaw. You have your PSPM certificate on the wall. Now what? The real work begins with day-to-day compliance: knowing when to perform Customer Due Diligence, recognising red flags, filing Cash Transaction Reports on time, and submitting your semi-annual returns.

This guide gives you the practical tools to stay compliant without a dedicated compliance department. You'll find decision frameworks, step-by-step processes, red flag checklists, and templates you can use immediately.

Here's what you'll learn:

• When CDD is required (and when it isn't)
• How to perform CDD step-by-step
• Enhanced Due Diligence for PEPs and high-risk customers
• The CTR decision framework: "Do I need to file?"
• STR triggers and how to report suspicious activity
• Semi-annual return filing through myPal
• Red flags that should make you pause
• Record-keeping that actually works

Understanding Your AML/CFT Obligations

Singapore implements Financial Action Task Force (FATF) standards through the PSPM Act and PMLTF Regulations. As a regulated dealer, you're the first line of defence against money laundering, terrorism financing, and proliferation financing.

Your obligations fall into five categories. Miss any of them and you risk fines up to S$100,000 or worse.

Obligation	What It Means	When Required
Customer Due Diligence (CDD)	Identify and verify customers	Designated transactions
Cash Transaction Report (CTR)	Report cash transactions to STRO	Cash >S$20,000
Suspicious Transaction Report (STR)	Report suspicious activity to STRO	When suspicion arises
Record Keeping	Maintain CDD and transaction records	All transactions, 5 years
Semi-Annual Returns	Report business activity to ACD	Twice yearly via myPal

When Is CDD Required? The Decision Framework

Not every transaction requires Customer Due Diligence. Understanding when CDD applies saves you time and ensures you don't miss required checks.

CDD Is Required When:

Trigger	Description	Example
Designated transaction	Cash/cash equivalent >S$20,000	Customer pays S$25,000 cash for a gold Rolex
Aggregated transactions	Multiple cash transactions same day totalling >S$20,000	Customer buys S$12,000 watch in morning, S$10,000 bracelet in afternoon
Suspicion of ML/TF/PF	Regardless of amount	Customer behaviour seems unusual
Doubts about prior CDD	Previously collected data seems wrong	Customer's documents look altered

CDD Is NOT Required When:

Scenario	Why No CDD
Credit card payment of any amount	Not cash or cash equivalent
Bank transfer payment of any amount	Not cash or cash equivalent
PayNow payment of any amount	Not cash or cash equivalent
Cash payment under S$20,000 (no suspicion)	Below threshold, no triggers

Quick Decision Flowchart

Question	If YES	If NO
Is payment in cash or cash equivalent?	Continue to next question	No CDD required (unless suspicious)
Is the amount >S$20,000?	CDD required	Continue to next question
Has same customer paid cash today totalling >S$20,000?	CDD required	Continue to next question
Is anything about this transaction suspicious?	CDD required	No CDD required

How to Perform CDD: Step-by-Step

When CDD is required, follow these steps before completing the transaction. Don't shortcut this process; a jeweller was charged in court for CDD failures involving S$313,000 in transactions.

Step 1: Identify the Customer

Collect the following information from your customer:

For Individuals	For Companies
Full legal name	Registered company name
Date of birth	Registration/incorporation number
Nationality/citizenship	Country of incorporation
Unique ID number (NRIC/Passport)	Registered address
Residential address	Principal place of business
Contact number	Directors' names

Step 2: Verify Identity

Verify the information using reliable, independent documents.

Customer Type	Acceptable Documents	Notes
Singapore citizen/PR	NRIC (original)	Check photo matches, card not expired
Foreigner	Passport (original)	Check validity, photo matches
Work pass holder	Work permit/pass + passport	Verify both documents
Singapore company	ACRA business profile	Recent printout, verify directors
Foreign company	Certificate of incorporation + registry extract	Certified copies acceptable

Critical: See the original document. If only a copy is available (exceptional circumstances), it must be certified by a notary public, lawyer, or public accountant.

Step 3: Identify Beneficial Owner

Ask: "Are you buying this for yourself, or on behalf of someone else?"

If acting on behalf of another person:

• Identify and verify the beneficial owner using the same process
• Understand the relationship between the customer and beneficial owner
• Obtain authorisation documentation if applicable

Step 4: Screen Against Sanctions Lists

Before completing the transaction, screen the customer's name against:

List	Source	What to Check
UN Consolidated List	un.org	Designated individuals/entities
MAS Sanctions Lists	MAS website	Singapore-designated persons
FATF High-Risk Jurisdictions	fatf-gafi.org	Countries under increased monitoring

Subscribe to the MAS mailing list to receive updates on designated individuals and entities.

Step 5: Assess Purpose and Risk

Ask natural questions to understand:

• Purpose of the purchase (personal use, gift, investment)
• How the customer learned about your store
• Whether the transaction fits the customer's apparent profile

Document your observations even if everything seems normal.

Step 6: Record and Retain

Keep copies of:

• ID documents (NRIC/passport copies)
• Completed CDD form/checklist
• Any supporting documentation
• Notes on your risk assessment

Retain for 5 years after the transaction.

Enhanced Due Diligence (ECDD): When Standard CDD Isn't Enough

Certain customers and situations require Enhanced Customer Due Diligence. ECDD involves additional scrutiny beyond the standard process.

When ECDD Is Required

Trigger	Description
Politically Exposed Person (PEP)	Customer is or is connected to a PEP
High-risk country	Customer is from FATF-listed jurisdiction
Complex transaction structure	Unusual or unnecessarily complex arrangements
High-risk assessment	Your risk assessment indicates elevated risk
Suspicion	Something about the customer or transaction raises concern

Who Is a Politically Exposed Person (PEP)?

PEPs are individuals entrusted with prominent public functions. The definition extends to their family members and close associates.

Category	Examples
Heads of state/government	Presidents, prime ministers, monarchs
Government ministers	Cabinet members, deputy ministers
Senior civil servants	Permanent secretaries, director-generals
Senior judicial officials	Supreme court judges, chief justices
Senior military officials	Generals, admirals, air marshals
State-owned enterprise executives	CEOs, board members of government companies
Senior political party officials	Party leaders, central committee members
Legislators	MPs, senators, parliamentarians
International organisation leaders	UN officials, World Bank executives
Family members of PEPs	Spouse, children, parents, siblings
Close associates of PEPs	Business partners, close advisors

Important: There's no prohibition on dealing with PEPs. You simply need to apply ECDD and manage the risk appropriately.

ECDD Additional Measures

When ECDD is triggered, you must perform these additional steps on top of standard CDD:

ECDD Measure	What You Must Do
Source of Funds	Ask where the money for this transaction comes from. Document the answer.
Source of Wealth	Understand the customer's overall wealth origin (employment, inheritance, business)
Senior Management Approval	Get approval from owner/director before proceeding with transaction
Enhanced Monitoring	Flag the customer for closer scrutiny on future transactions
Purpose Verification	More detailed inquiry into transaction purpose and intended use

What If You Can't Complete CDD or ECDD?

If the customer refuses to provide required information or you cannot verify their identity:

1. Do not proceed with the transaction
2. Terminate the transaction
3. Consider whether to file a Suspicious Transaction Report
4. Document your decision and reasons

Never complete a transaction when CDD cannot be performed. This is the rule that got a dealer charged in court in 2024.

Cash Transaction Report (CTR): The Filing Decision

Every designated transaction requires a CTR filed with STRO within 15 business days. Here's how to determine if you need to file.

CTR Decision Framework

Scenario	CTR Required?	Reasoning
Customer pays S$25,000 cash for a gold watch	Yes	Cash >S$20,000
Customer pays S$25,000 by credit card	No	Credit card is not cash equivalent
Customer pays S$25,000 by bank transfer	No	Bank transfer is not cash equivalent
Customer pays S$15,000 cash morning + S$10,000 cash afternoon	Yes	Aggregated cash same day >S$20,000
Customer pays S$18,000 cash	No	Below threshold (unless suspicious)
Customer pays S$21,000 by cashier's order	Yes	Cashier's order is cash equivalent
Customer pays S$25,000 in Bitcoin	Yes	Digital payment token is cash equivalent
You purchase S$22,000 worth of gold from a walk-in seller (cash)	Yes	Secondhand purchase for cash >S$20,000

What Counts as Cash Equivalent (Reminder)

Cash Equivalent (CTR Required)	Not Cash Equivalent (No CTR)
Physical currency (notes, coins)	Credit card
Personal cheque	Debit card
Cashier's order	Bank transfer
Bank draft	GIRO
Money order	PayNow
Traveller's cheque	NETS
Digital payment token (cryptocurrency)	Wire transfer

How to File a CTR via SONAR

Step	Action	Notes
1	Set up CorpPass	Administrator creates user accounts
2	Log in to SONAR	police.gov.sg/sonar
3	Select CTR (Form NP 784)	Specifically for precious metals dealers
4	Enter transaction details	Date, amount, customer info, goods description
5	Enter customer CDD details	Name, ID, address from your CDD records
6	Submit electronically	System automatically sends copy to ACD
7	Save confirmation	Keep for your records (5 years)

CTR Filing Deadline

Submit within 15 business days of the transaction. Business days are Monday to Friday, excluding public holidays. A dealer was fined S$9,000 for failing to file on time.

Suspicious Transaction Report (STR): When to File

Unlike CTRs which have clear thresholds, STRs require judgement. You must file when you "know or have reasonable grounds to suspect" that a transaction involves proceeds of crime or terrorism financing.

STR vs CTR: Key Differences

Aspect	CTR	STR
Trigger	Cash >S$20,000	Suspicion (any amount)
Deadline	15 business days	As soon as reasonably practicable
Threshold	S$20,000	None
Payment method	Cash/cash equivalent only	Any payment method
Tipping off	No restriction	Criminal offence to tell anyone

Red Flags That Should Trigger STR Consideration

ACD publishes a list of red flag indicators. While each indicator alone may not be sufficient, a combination should raise suspicion.

Customer Behaviour Red Flags

Red Flag	Why It's Suspicious
Customer shows no interest in price or quality	Legitimate buyers care about value
Customer doesn't ask about market conditions	Genuine collectors/investors research prices
Customer rushes to complete transaction	May be avoiding scrutiny
Customer is reluctant to provide ID	Hiding identity
Customer provides inconsistent information	Possible false identity
Customer pays in small denomination notes	Possible structured deposits
Customer appears nervous or evasive	General warning sign
Customer's story doesn't match their appearance/profile	Possible front person

Transaction Red Flags

Red Flag	Why It's Suspicious
Multiple transactions just under S$20,000	Structuring to avoid reporting threshold
Purchase doesn't match customer's apparent means	Unexplained wealth
Customer buys then immediately resells	Possible layering
Unusual payment method (crypto, traveller's cheques)	Avoiding normal banking channels
Third party pays for the purchase	Hiding beneficial owner
Customer overpays and requests refund to different account	Classic money laundering technique
Rapid turnaround of high-volume transactions	Possible GST fraud (gold)

Supplier Red Flags (For Secondhand Dealers)

Red Flag	Why It's Suspicious
Newly established supplier offering high-value deals	Possible shell company
Unusually favourable credit terms	Too good to be true
Scrap gold in condition not normally traded	Possible stolen goods
Evasive supplier	Hiding something
Unfamiliar introducers recommending deals	Possible front

Filing an STR

1. File via SONAR (same system as CTR)
2. Include all relevant details about why you're suspicious
3. Attach any supporting documentation
4. Do NOT tell the customer or anyone else that you've filed

Tipping Off Warning: It's a criminal offence under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act to tell anyone that you've filed an STR. This includes the customer, colleagues outside your compliance function, and family members.

Semi-Annual Returns: Filing via myPal

Every registered dealer must submit semi-annual returns reporting business activity. This is separate from CTR/STR filing.

Reporting Periods and Deadlines

Period	Dates Covered	Submission Deadline
H1	1 January – 30 June	1 July – 31 July
H2	1 July – 31 December	1 January – 31 January (following year)

What You Report

The semi-annual return covers:

• Business operations during the period
• Transaction volumes and values
• Number of designated transactions
• CTRs filed during the period
• Any changes to business particulars
• Compliance activities undertaken

How to File via myPal

Step	Action
1	Log in to myPal portal (acd.mlaw.gov.sg)
2	Navigate to Semi-Annual Return section
3	Select the reporting period
4	Complete all required fields
5	Review for accuracy
6	Submit electronically
7	Save confirmation for your records

ACD provides a guidance video and instruction guide with screenshots on the myPal portal.

Record-Keeping That Actually Works

Good records protect you during inspections and support insurance claims. Here's what to keep and for how long.

Minimum Retention Periods

Record Type	Retention Period	From When
CDD records	5 years	Transaction date
Transaction records	5 years	Transaction date
CTR copies	5 years	Submission date
STR copies	5 years	Submission date
ID document copies	5 years	Transaction date
Compliance policies	5 years	Date superseded
Training records	5 years	Training date

Important: The 5-year retention requirement persists even after you cease operations. You cannot destroy records when closing the business.

What Each Transaction Record Should Include

Element	Details to Record
Transaction basics	Date, time, invoice/receipt number
Item details	Description, serial number, weight (if applicable), photos
Value	Sale price, currency
Payment method	Cash, card, transfer, cheque (note type)
Customer	Name, ID number, contact (if CDD performed)
Staff	Who handled the transaction

Organising Your Records

Create a system you can actually maintain:

Folder/Category	Contents
CDD Records (by year)	Completed CDD forms, ID copies, verification notes
CTR Filings (by year)	SONAR confirmations, supporting transaction records
STR Filings (by year)	SONAR confirmations, notes (keep separate, restricted access)
Semi-Annual Returns	Submitted returns, confirmations
Policies & Procedures	AML policy, CDD procedures, training materials
Training Records	Attendance, materials covered, dates

Ongoing Monitoring Obligations

Compliance isn't just transaction-by-transaction. You must monitor for patterns that might indicate ML/TF/PF.

Monitoring Activity	Frequency	What to Look For
Transaction patterns	Weekly/monthly review	Unusual volumes, structuring patterns
Customer information	Periodic review	Outdated info, changes in risk profile
Sanctions lists	When updated	Check existing customers against new designations
High-risk customers	Enhanced frequency	Changes in behaviour, new transactions

Common Compliance Mistakes

Avoid these errors that trip up dealers during inspections or lead to enforcement action.

Mistake	Consequence	Prevention
Completing transaction without CDD	Fine up to S$100,000, criminal charges	Always check if CDD required before proceeding
Late CTR filing	Fine (S$9,000 in one case)	Set calendar reminder for 10 days post-transaction
Missing CTR entirely	Fine up to S$20,000	Flag all cash >S$20,000 in POS/records
Forgetting to aggregate	CTR should have been filed	Track same-day cash transactions per customer
No source of funds inquiry for PEPs	ECDD failure	Add PEP screening to standard CDD process
Incomplete CDD records	Cannot demonstrate compliance	Use standardised CDD checklist
Tipping off about STR	Criminal offence	Never discuss STRs with anyone outside compliance
Missing semi-annual return deadline	Regulatory attention	Set calendar reminders for 1 July and 1 January

Compliance Calendar

Keep this annual compliance calendar to ensure nothing slips:

Month	Task	Deadline
January	Submit H2 semi-annual return	31 January
January	Review and update AML policies	End of month
Quarterly	Staff refresher training	End of quarter
July	Submit H1 semi-annual return	31 July
Ongoing	File CTRs within 15 business days	Per transaction
Ongoing	File STRs when suspicion arises	ASAP
Before registration expiry	Renew PSPM registration	Before expiry date

The Documentation Double Benefit

Every CDD form you complete, every transaction you record, every CTR you file creates documentation that serves two purposes.

First, it keeps you compliant. When ACD inspects your business, you can demonstrate proper procedures. When regulators ask questions, you have answers backed by records.

Second, this same documentation is exactly what insurers need. Jewellers block underwriters want to know what's in your inventory, what you paid for it, and who you bought it from. The CDD records, transaction histories, and valuation documentation required for AML compliance overlap almost perfectly with insurance underwriting requirements.

Dealers who maintain proper compliance records often discover they have clear visibility into their inventory value for the first time. That visibility tends to reveal gaps in coverage, or in some cases, complete lack of appropriate insurance.

Frequently Asked Questions

Do I need to perform CDD if the customer pays by credit card?

No. CDD is only required for designated transactions involving cash or cash equivalents exceeding S$20,000. Credit cards, bank transfers, and PayNow are not cash equivalents. However, if you have suspicion of ML/TF/PF regardless of payment method, CDD becomes necessary.

What happens if a customer refuses to provide their ID for CDD?

You must terminate the transaction. You cannot complete a designated transaction without performing CDD. Consider whether to file a Suspicious Transaction Report based on their refusal.

How do I know if someone is a PEP?

Ask the customer directly if they hold or have held a prominent public function. Use PEP screening tools or databases if available. For high-value transactions, research the customer's background. When in doubt, apply Enhanced CDD.

Can I file a CTR late if I just realised I missed one?

File it immediately. Late filing is better than not filing. Document why it was late in your records. The 15-business-day deadline is mandatory, and fines have been imposed for late filing.

What if I'm not sure whether to file an STR?

When in doubt, file. You have legal protection when filing in good faith. There's no penalty for filing an STR that turns out to be unwarranted, but there are severe penalties for failing to file when you should have.

How detailed does my semi-annual return need to be?

Follow the myPal template exactly. Report all required fields accurately. ACD provides guidance materials and a video tutorial. Incomplete returns will be flagged for follow-up.

Do I need to keep records if I stop operating?

Yes. The 5-year retention requirement continues even after you cease business. You cannot destroy records when closing your dealership.

Can my sales staff perform CDD?

Yes, but they must be trained. Document the training provided. The compliance officer remains responsible for ensuring procedures are followed correctly.

What's the penalty for tipping off about an STR?

It's a criminal offence under the CDSA. Penalties include imprisonment. Never tell anyone (including the customer, colleagues, or family) that you've filed an STR.

How do I access the sanctions lists I need to screen against?

Subscribe to the MAS mailing list for updates on designated persons. The UN Consolidated List is available at un.org. FATF high-risk jurisdictions are listed at fatf-gafi.org. Check these before completing any CDD.

Compliance Checklist: Daily Operations

Before Completing Any Sale	Check
Is payment in cash or cash equivalent?	☐
If yes, is amount >S$20,000 (including today's total from this customer)?	☐
If CDD required, have you completed all steps?	☐
Have you screened against sanctions lists?	☐
Is the customer a PEP (requiring ECDD)?	☐
Is anything suspicious about this transaction?	☐
Have you documented everything?	☐

Key Contacts

Purpose	Contact
AML/CFT queries	acd.mlaw.gov.sg
Semi-annual returns (myPal)	acd.mlaw.gov.sg/mypal
CTR/STR filing (SONAR)	police.gov.sg/sonar
STRO queries	stro@spf.gov.sg / 6324 9836
SONAR technical support	SPF_STRO_IT_Team@spf.gov.sg
Guidance materials	acd.mlaw.gov.sg/guidance-materials
Red flag indicators	acd.mlaw.gov.sg/compliance/red-flag-indicators

Summary

AML/CFT compliance for watch and jewellery dealers comes down to consistent execution of five core obligations: CDD on designated transactions, CTR filing within 15 business days, STR filing when suspicion arises, semi-annual returns via myPal, and maintaining records for five years.

The decision frameworks in this guide help you navigate the grey areas. When in doubt about whether CDD is required, err on the side of performing it. When in doubt about filing an STR, file it. The regulatory penalties for under-compliance far exceed the administrative burden of over-compliance.

The documentation infrastructure you build for AML compliance serves a second purpose: it creates the inventory records, valuations, and transaction histories that insurers need for jewellers block coverage. Dealers who treat compliance as foundational rather than burdensome find themselves better positioned when it comes time to underwrite their inventory protection.