News / Shippers warn that plan to ease Singapore Customs rules will aid fakes trade

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A Singapore government initiative to reform customs procedures to make its massive port more attractive to shippers for transhipment has been criticised.

A group of large multinational shippers claim it could aid the growing trade in counterfeit goods.

In May, the government called for consultation on amending its customs act, which would allow Singapore’s customs authorities to allow shippers not to submit manifest data on shipments transhipped at its vast container and air cargo terminals.

“This amendment helps Singapore Customs better manage the compliance requirements on freight companies, and preserves Singapore’s attractiveness as a transhipment [and] transit hub,” the proposal said.

Last year, the International Chamber of Commerce launched its Business Action to Stop Counterfeiting And Piracy (BASCAP) group to combat the illegal trade in the maritime supply chain.

And in a response to the call for consultation, BASCAP director William Dobson wrote: “While we welcome the move to improve enforcement and efficiency of Customs, our members are concerned that the proposed amendments allowing for the discretionary submission of shipping manifests will weaken Singapore’s ability to control the flow of counterfeit goods into Singapore and to prevent the transhipment of counterfeit and pirated goods through Singapore.

“We understand that the further liberalised trade measures offered in the amendment are intended at intensifying Singapore’s attractiveness as a transhipment and transit hub; however, BASCAP views that the reduced levels of regulatory oversight proposed in the current amendment will increase the opportunities for organised criminal networks to use Singapore as a transit hub for their trade in illegal goods, including counterfeit and pirated products.

“BASCAP believes that submission of manifest data and verification is a vital part for any risk-based assessment by Customs to guard against trade in counterfeit and pirated goods,” he added.

The problem of counterfeit goods is potentially huge – not just to shippers of genuine goods, but to governments worldwide due to the loss of tax revenues. A report commissioned by BASCAP and the International Trademark Association concluded that the trade in counterfeit and pirated goods could reach $2.3trn by 2022, possibly threatening 5.4m jobs around the world.

According to the OECD, the value of counterfeit goods in Singapore could be as high as $269.3m, and the port is especially vulnerable given its use as a transhipment hub by Chinese exporters that manufacture the majority of the world’s counterfeit goods.

Mr Dobson added: “BASCAP views that the proposed amendment may enable organised criminal networks to facilitate the manufacture, reassembly, repackaging or re-labeling, and distribution of counterfeit goods through transit hubs in Singapore, including free-trade zones.

“FTZs are easy targets for re-documenting shipments and hiding the origins, contents, and destinations of illicit goods. The move to eliminate the mandatory provision of manifest data will act as an additional advantage to criminal actors to turn these hubs into both laundering and distribution points for counterfeit goods.”

Signatories to last year’s inaugural BASCAP declaration of intent include major shippers such as Unilever, Philip Morris and BP, as well as shipping lines Maersk and MSC and 3PLs Kuehne + Nagel and Expeditors.