Consultation on Bill to Enhance Oversight of Goods Passing through Free Trade Zones
On 20 March 2023, the Ministry of Finance (“MOF“) announced proposed legislative amendments to the Free Trade Zones Act 1966. The amendments will update and strengthen the free trade zone (“FTZ“) regime and thereby support Singapore’s position as a trusted global trade hub by:
- enabling the better detection, deterrence and prevention of money laundering, associated predicate offences and terrorism financing; and
- protecting Singapore’s financial system against illegal activities and illicit fund flows.
The key changes proposed in the draft Free Trade Zones (Amendment) Bill (“Bill“) include:
- the requirements for licensed FTZ operators, licensed FTZ cargo handlers, shipping agents and air cargo agents; and
- the regulatory and enforcement regime.
MOF was seeking comments on the draft Bill and released the draft Bill only for the purpose of the public consultation. The draft Bill does not represent the final legislation. The public consultation ended on 9 April 2023. MOF will publish the consultation response on its website in April 2023.
For more information, click here to read our Legal Update which provides a summary of the key changes proposed in the draft Bill.
How Courts are Dealing with Crypto Disputes – Recent Developments in Crypto Asset Litigation across Jurisdictions
The crypto market has been through a tumultuous year, leading to an uptick in crypto litigation. Here, we explore the notable crypto litigation developments in the past year.
Jurisdictional gateways
Victims seeking their local courts’ assistance must first demonstrate a good arguable case for invoking the court’s jurisdiction over foreign parties.
- In the UK, the recent decision of Osbourne v Persons Unknown [2023] EWHC 39 (“Osbourne“) has cast doubt on the previously accepted position that jurisdiction follows the location of intangible crypto asset.
- The Singapore courts have typically assumed jurisdiction on other bases, such as the defendants carrying on business or having assets in Singapore (CLM v CLN [2022] SGHC 46, Janesh s/o Rajkumar v Unknown Person [2022] SGHC 264).
Service of court documents
In court proceedings to recover ‘stolen’ crypto assets, courts have recently adopted an innovative solution to address this problem – Service of court documents via non-fungible token (NFT) airdrop:
- LCX AG v John Doe Nos. 1-25 (Docket No. 154644/2022)
- D’Aloia v Persons Unknown [2022] EWHC 1723
- Jones v Persons Unknown [2022] EWCH 2543
- Benjamin Arthur Bowen v Xingzhao Li (Case No. 23-cv-20399)
Fiduciary and tortious duties
In the preliminary decision of the English Court of Appeal in Tulip Trading Ltd v Van der Laan [2023] EWCA Civ 83, it was held there was a “realistic argument” that network developers are fiduciaries and owed fiduciary duties to cryptocurrency owners, including a duty of single-minded loyalty to the users of the Bitcoin software.
Crypto exchange found to be constructive trustee of stolen crypto assets
In Jones v Persons Unknown [2022] EWHC 2543, the English Court imposed a constructive trust on a third party to the fraud (in this case, a crypto exchange) and ordering the third party to deliver up the stolen crypto assets to the victim.
Doctrine of illegality
The case of Rio Christofle v Malcolm Tan Chun Chuen [2023] SGHC 66 is the first reported decision in Singapore where crypto actors have sought to have a sale and purchase agreement for crypto assets voided for illegality and made unenforceable by claiming the agreement breaches legislation.
For more information, click here to read our Legal Update.
Singapore and Indonesia Sign MOUs for Closer Cooperation in Renewable Energy and Digital Economy
On 16 March 2023, it was announced that Singapore and Indonesia will work more closely in the areas of renewable energy and digital economy and both countries have entered Memoranda of Understandings (“MOUs“) in this regard.
Renewable Energy
Both countries signed an MOU on Renewable Energy Cooperation, under which both countries will develop a cooperative institutional framework to facilitate investments in the development of renewable energy manufacturing industries in Indonesia and cross-border electricity trading projects between Indonesia and Singapore, including:
- Facilitating investments to develop upstream and downstream renewable energy manufacturing industries and capabilities in Indonesia, building on investments for electricity export projects to Singapore;
- Supporting the development of solar farms and Battery Energy Storage Systems (BESS) to supply renewable energy into Indonesia and for energy export;
- Promoting investments to attract industries using renewable energy into Green Corridors in Indonesia; and
- Facilitating commercial arrangements and creating frameworks and transmission infrastructure for cross-border electricity trading between both countries, which would create capital inflows into Indonesia.
This MOU builds on the Energy Cooperation between Indonesia and Singapore that was signed last year, and the MOU on Climate Change and Sustainability signed in March 2022.
Digital Economy
Singapore and Indonesia also signed an MOU on Singapore-Indonesia Tech:X Programme, which establishes the Tech:X Programme. This Programme is aimed at, among others, growing young tech talent and developing the tech ecosystems. More details on the Tech:X Programme will be released in due course. Various partnership documents relating to the digital economy, including healthtech and edtech, were also signed between Singapore and Indonesia companies.
The MOUs represent the strong belief that Indonesia and Singapore have in the deep synergies and strategic and economic value of renewable energy and digital economy initiatives between the two countries.
Reciprocal Enforcement of Foreign Judgments Regime in Singapore to be Consolidated from 1 March 2023
Singapore, as a regional hub for dispute resolution, has been developing its framework for the enforcement of foreign judgments, with arrangements in place with a number of countries for the reciprocal enforcement of judgments.
The reciprocal enforcement of foreign judgments regime in Singapore has now been consolidated under the Reciprocal Enforcement of Foreign Judgments Act (“REFJA“). The Commonwealth countries with which Singapore has reciprocal enforcement arrangements have been duly transferred to the REFJA from 1 March 2023.
Previously, the countries which fell within the reciprocal enforcement of foreign judgments regime were split between the REFJA and the Reciprocal Enforcement of Commonwealth Judgments Act (“RECJA“), with the RECJA governing prescribed Commonwealth countries. To consolidate the reciprocal enforcement regime, the reciprocating Commonwealth countries under the RECJA have been transferred to the REFJA pursuant to the Reciprocal Enforcement of Foreign Judgments (United Kingdom and the Commonwealth) Order 2023 (“UK and Commonwealth Order“), and the RECJA has been repealed from 1 March 2023.
Previously, the RECJA only allowed for the registration of money judgments given by superior courts in civil proceedings. After the transfer, the scope of registrable judgments from the countries listed in the UK and Commonwealth Order has been expanded to include:
- Money judgments from lower courts (in as far as such courts are listed as recognised courts in the UK and Commonwealth Order);
- Interlocutory money judgments (in as far as they are final and conclusive as between the parties to it); and
- Judicial settlements, consent judgments and consent orders (in as far as they are final and conclusive and a sum of money is payable under them).
For more information, click here to read our Legal Update.
GFIT Issues Third Consultation Paper on Taxonomy for Green and Transition Activities for Singapore-Based FIs
On 15 February 2023, the Green Finance Industry Taskforce (“GFIT“) issued the third consultation paper (“2023 Consultation Paper“) on the taxonomy it has been developing for Singapore-based financial institutions (FIs) (“Singapore Taxonomy“) to identify and classify green and transition activities.
The 2023 Consultation Paper follows two earlier consultation papers issued in 2021 and 2022.
The key proposals in the 2023 Consultation Paper include: (i) the thresholds and technical screening criteria to classify economic activities as green, amber or red categories under the traffic light approach for five sectors; and (ii) the Do No Significant Harm (“DNSH“) criteria.
Thresholds and Technical Screening Criteria for Activities in Five Sectors
The Singapore Taxonomy covers activities in eight focus sectors, namely: (i) Energy; (ii) Transport; (iii) Building; (iv) Industry; (v) Information and Communications Technology (“ICT“); (vi) Waste and Water; (vii) Agriculture and Forestry; and (viii) Carbon Capture and Storage/Sequestration (“CCS“).
The 2022 Consultation Paper consulted on the thresholds and technical screening criteria for activities in the first three sectors: (i) Energy, (ii) Transport and (iii) Building.
In the 2023 Consultation Paper, GFIT sets out the proposed thresholds and technical screening criteria to classify economic activities under either green, amber or red categories for the other five focus sectors: (i) Industry; (ii) ICT; (iii) Waste and Water; (iv) Agriculture and Forestry; and (v) CCS.
Do No Significant Harm (DNSH) Criteria
GFIT proposed a DNSH assessment based on a set of DNSH criteria to ensure that when an activity makes a substantial contribution to climate change mitigation, the activity does not cause significant harm to all the other environmental objectives of the Singapore Taxonomy (i.e. climate change adaptation; protection of healthy ecosystems and biodiversity; promotion of resource resilience and circular economy; and pollution prevention and control).
The details of the DNSH criteria are contained in the document “Proposed DNSH Criteria” (15 February 2023). GFIT indicated that the application of the DNSH criteria has not been decided at this stage.
The consultation period for the 2023 Consultation Period ran from 15 February 2023 to 15 March 2023. GFIT intends to issue the final taxonomy by the first half of 2023.
For more information, click here to read our Legal Update.
Singapore and Vietnam Sign MOUs to Enhance Economic Cooperation
On 9 February 2023, Singapore and Vietnam signed two Memoranda of Understanding (“MOUs“) to deepen economic ties between the two countries.
Green-Digital Economic Partnership
The MOU on the Green-Digital Economic Partnership is a broad framework which seeks to promote collaboration in the green and digital economy between Singapore and Vietnam. The MOU builds on four earlier MOUs between Singapore and Vietnam on digital economy, energy, carbon credits and innovation that were signed in 2022. It aims to strengthen their economic ties through collaboration in the following areas:
- Energy connectivity;
- Sustainability;
- Infrastructure;
- Digital and innovation; and
- Connectivity, including in education, finance, information technology and telecommunications, tourism, trade and services, and transport.
Economic and Trade Cooperation Workplan
The MOU on the Economic and Trade Cooperation Workplan is an implementation MOU that builds on the MOU on Economic and Trade Cooperation that was signed in February 2022. As an implementation MOU, it sets out activities and goals for 2023 to improve the bilateral economic and trade cooperation of the two countries, including:
- Encouraging collaboration in the digital economy;
- Enhancing agri-trade cooperation through business matching; and
- Facilitating Singapore investment in the agriculture and logistics sectors in Vietnam.
For the energy and industrial sectors, the MOU will enhance cooperation in these sectors through (i) the development of projects in renewable energy, electricity, liquified natural gas, and low-carbon solutions; and (ii) enhancing collaboration in capacity building.
Singapore and Malaysia Sign Frameworks on Cooperation in Digital Economy and Green Economy
On 30 January 2023, Singapore and Malaysia signed two Frameworks on Cooperation (“FoCs“) in Digital Economy and Green Economy. The FoCs, which were substantially concluded in August 2022, will lay the foundation for future bilateral initiatives relating to the digital and green economies.
Digital Economy
The FoC in digital economy seeks to promote greater inter-operability and collaboration on digital economy issues and improve coordination between Singapore and Malaysia beyond what the E-Commerce Chapters of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) Agreement provide.
The FoC covers various areas, including the following:
- Trade Facilitation: To speed up the entire trade process, allowing seamless transactions online and across borders;
- Cross-border Data Flows: To support the movement or transfer of information between the two countries;
- Electronic Payments: To intensify cooperation in developing safe and secure cross-border E-payment systems;
- Digital Identities: To encourage knowledge sharing for the development of each country’s respective identity regimes, including the development of the ASEAN Unique Business Identification Number (UBIN); and
- Business/Consumer Trust: To explore partnership in new and emerging areas to build trust in the digital systems.
Green Economy
Under the FoC on green economy, both countries agreed to cooperate in the following areas:
- Next generation mobility: To explore collaboration on EV and AV standards and the adoption of technical references;
- Environmental, social and governance; capacity development programme for exporters: To promote knowledge sharing and business networking on sustainable business practices;
- Low carbon solutions: To explore joint studies and projects on low-carbon solutions such as hydrogen and carbon capture, utilisation and storage;
- Carbon credits industry collaboration: To explore collaboration voluntary carbon credits projects; and
- Development of New and Renewable Energy Related Technology Standards to Support Domestic and Regional Decarbonisation: This includes developing common policies and standards for new and renewable energy technologies.
Public Consultation on Proposed Intangibles Disclosure Framework
Intangible assets such as intellectual property and goodwill are important sources of competitive advantage and economic value for any business. However, companies may face challenges in the valuation and reporting of intangible assets, particularly in this digital economy. This is exacerbated by a lack of standardised reporting principles.
To address this issue, the Accounting and Corporate Regulatory Authority (“ACRA“) and the Intellectual Property Office of Singapore (“IPOS“) jointly issued a public consultation paper on 14 December 2022 proposing an Intangibles Disclosure Framework (“Framework“) to help businesses disclose and communicate their intangibles.
The Framework is an initiative under the Singapore IP Strategy 2030 (“SIPS 2030”), a 10-year blueprint to strengthen Singapore’s position as a global intangible assets and intellectual property hub. One long-term goal of SIPS 2030 is to build a credible and trusted intangible asset valuation and reporting ecosystem to support enterprises in managing and commercialising their intangible assets. In this regard, through the development of the Framework, SIPS 2030 seeks to establish Singapore’s position as a frontrunner in the global community, as no jurisdiction has developed an intangible-specific disclosure or valuation framework.
The Framework outlines the four pillars that an enterprise should observe when disclosing their intangibles in a report and provides guidance for disclosure under these principles:
- Strategy. Disclose how intangibles contribute to business, strategy, and financial planning where such information is material.
- Identification. Disclose the nature and characteristics of the intangibles that fit into the definition provided, and categorise them.
- Measurement. Disclose the performance metrics and drivers used to assess an enterprise’s intangibles where such information is material.
- Management. Disclose how an enterprise identifies, assesses, and manages the risks and opportunities of its intangibles.
The Framework will help businesses communicate the value of their intangibles and maximise their economic potential, which will also serve to enhance information transparency and facilitate the commercialisation of intangibles. The public consultation ended on 28 February 2023.
For more information, click here to read our Legal Update.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice
