Introduction
Export controls have become more complex over the last few years given the evolution of, and continued advancements in, technology. The risks of chips and artificial intelligence being imbibed and utilised within various products has meant greater enforcement. In Singapore, this was aptly demonstrated in a recent case regarding the movement of advanced semiconductor chips through Singapore, allegedly to bypass control measures from the United States of America, which has since led to fraud charges being brought against the individuals involved. With greater enforcement, greater clarity is also important.
To address concerns, the Singapore Customs and the Ministry of Trade and Industry have issued a “Joint Advisory: Export Controls on advanced semiconductor and artificial intelligence (AI) technologies” (“Advisory“). The Advisory reiterates the need to comply with Singapore’s export control regime, as well as the importance of observing the implications of other countries’ export controls.
Notably, the Advisory encourages businesses to put in place the following measures:
- Implement a robust internal compliance programme; and
- Engage legal expertise for business activities involving controlled technologies.
The Advisory is a timely reminder of the need to look beyond domestic regulations when engaging in the cross-border movement of any dual use products, let alone technological products. Inadvertent violations may easily occur, leading to potentially serious legal and reputational consequences. Businesses in this area should thus ensure that they seek appropriate advice and representation to ensure compliance.
Key Features of the Advisory
At a high level, Singapore’s export control regime is governed by the Strategic Goods (Control) Act 2002 and the Regulation of Imports and Exports Regulations. Among others, these instruments control the transfer and brokering of strategic goods and strategic goods technology. The Advisory reiterates that Singapore’s regime: (i) is aligned with major multilateral export control regimes and sanctions imposed by the United Nations Security Council (“UNSC“); and (ii) extends across a number of different lists. Additionally, Singapore also enforces UNSC sanctions via domestic legislation, particularly the United Nations Act 2001, through which it passes subsidiary legislation reflecting UNSC sanctions.
Apart from the rules operating in Singapore, the Advisory reminds businesses operating in Singapore that they must be cognisant of the implications of other countries’ export controls on their international business activities. While Singapore does not have legal obligations to enforce the unilateral export controls of other countries, it expects all companies operating in Singapore to consider all applicable foreign regulations.
What this really means is that if goods or technology are exported out of hypothetical “Country A” into Singapore, “Country A’s” export control rules will have to be complied with. The necessary corollary is that Singapore’s import control rules will also have to be complied with. Finally, as the goods leave the country, Singapore’s export control rules must be followed. Compliance is thus necessary at all stages; there is no individualised reviewing in isolation of the movement of the goods or technology.
The Advisory highlights that the Singapore Government does not condone businesses deliberately using their association with Singapore to circumvent the export controls of other countries, and that action will be taken against those engaged in dishonest practices to evade applicable export controls. Additionally, the Advisory highlights that all companies operating in Singapore must conduct their activities transparently and in full compliance with these laws and regulations, and that firm and decisive action will be taken against any violations.
In this regard, on 8 April 2025, Singapore Customs updated their Advisory on Accurate Declaration of Permit Fields for the Import and Export of Goods, which provides guidance on the accurate declaration of certain permit fields. Traders and Declaring Agents are reminded that, for the field of “Country/Region of Final Destination”, they are to indicate the country where the goods are finally destined to, rather than just declaring this field based on the consignee address in the commercial invoice.
The Advisory encourages businesses to adopt the following measures to mitigate the risk of inadvertent violations:
- Implement a robust internal compliance programme which includes: (i) Know Your Customer (KYC) practices; and (ii) end-user screenings, to ensure that business transactions are made with legitimate customers or end-users that adhere to relevant export control regulations; and
- Engage appropriate legal expertise, where necessary, for international business activities involving controlled technologies.
The Advisory is but a reminder of the applicable best practices. Such compliance protocols need to be in place not just for compliance with trade laws, but also as an important part of corporate governance. A company failing to have such processes in place could potentially have their directors and officers viewed as violating their duties of skill and care to the company.
Concluding Words
As the web of global export controls relating to restricted technologies continues to broaden, businesses seeking to facilitate the movement of such products face an increasingly complex task, both in identifying all applicable regulations, and in achieving compliance with such regulations. A comprehensive compliance programme and appropriate legal advice, starting with Singapore and then crossing into the other countries that a business operates in, are vital in ensuring that inadvertent violations do not occur, and in avoiding the resultant legal, operational and reputational consequences.
Rajah & Tann, as a leading network of regional firms with a dedicated trade practice, is well-placed to advise on the various facets of this complex issue. For further queries, please feel free to contact our team.
Disclaimer
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