Singapore: The revised Free Trade Zones (FTZ) regime

On February 28, 2024, Singapore Customs issued Circular No: 02/2024 to all traders, free trade zones operators and cargo handlers the commencement of a revised Free Trade Zones (FTZ) regime starting from March 1, 2024, following the Free Trade Zones (Amendment) Bill passed on October 4, 2023. This new regime includes the introduction of a FTZ operator licensing system and mandates that FTZ cargo handlers and shipping agents provide specific information. Entities seeking to operate FTZs in Singapore must obtain a license from Singapore Customs, ensuring compliance with security and reporting requirements. The application process for these licenses will open on March 1, 2024. Additionally, shipping agents will be required to submit Bill of Lading information to cargo handlers, with detailed submission requirements outlined in Annex B. An adjustment period of six months will be provided for the industry to adapt to these changes, during which penalties for non-compliance with submission requirements will generally not be enforced.

Free Trade Zones (FTZs) in Singapore are areas designated by the Singapore Customs where goods can be landed, handled, manufactured, or reconfigured without payment of duty. They are considered outside of Singapore Customs territory. The main purpose of FTZs is to facilitate trade by reducing customs regulations and to provide easier processing for transshipment and re-export operations.

FTZs in Singapore include areas such as Brani Terminal, Keppel Distripark, Pasir Panjang Terminal, Sembawang Wharves, Tanjong Pagar Terminal, Keppel Terminal, Tuas Port, and Jurong Port. These zones are operated by entities like PSA Corporation Ltd and Jurong Port Pte Ltd, which are responsible for the efficient functioning of the zones, including security and reporting requirements.

From March 1, 2024, entities operating or seeking to operate any FTZ in Singapore will need to apply for and obtain FTZ Operator licences issued by Singapore Customs. This new licensing regime is part of the enhancements to the FTZ regime following the Free Trade Zones (Amendment) Bill passed on October 4, 2023. The amendments also require shipping agents and FTZ cargo handlers to submit specific information to Singapore Customs.

The circular also mentions a 6-month adjustment period from March 1, 2024 to August 31, 2024, during which shipping agents and specified FTZ cargo handlers will generally not be penalized for non-compliance with the new submission requirements. However, all other customs offences and penalties remain applicable during this period. Non-containerized cargo and air FTZ cargo handlers and air cargo agents are temporarily exempted from the requirements until further notice.

The new Circular also provides the adjustment period from March to August 2024 as follows:

Non-Containerized Cargo:

For clarifications, entities can contact Singapore Customs at customs_ftz@customs.gov.sg

For more information on how ONESOURCE Global Trade solutions can assist you in adopting our FTZ and FTA Solutions, please contact your Account Manager or Client Services Manager.

lick this link to know more.