Legislation

Building Control (Amendment) Act 2003 (A18/2003)

The Building Control (Amendment) Act 2003 amends the Building Control Act (Cap 29) and makes related amendments to the Architects Act (Cap 12) and the Professional Engineers Act (Cap 253) to facilitate ‘Design and Build’ procurement arrangements under which multidisciplinary firms may provide architectural, engineering and construction services.

The Building Control (Amendment) Act 2003 also amends:

(a) the Building Control Act to better define the role of qualified persons who are appointed in respect of building works, to provide for objectives, standards and requirements for the design and construction of buildings to be established by regulations and to finetune and update the Act; and
(b) the Architects Act and the Professional Engineers Act to provide that the issue of practicing certificates under the respective Acts may be conditioned on applicants meeting prescribed requirements relating to continuing professional education and to fine-tune and update the Acts.

The Building Control (Amendment) Act 2003 is effective from 1 January 2004.

Insurance (Amendment) Act 2003 (A23/2003)

The Insurance (Amendment) Act 2003 comes into operation on 1 January 2004, save for several provisions.

The Insurance (Amendment) Act 2003 amends the Insurance Act (Cap 142) to facilitate the establishment of three new regulatory frameworks, namely:

• a regulatory framework to deal with accident and health insurance business;
• a risk-based capital framework for life and general insurance companies; and
• an authorisation framework to strengthen Monetary Authority of Singapore (‘MAS’) supervision over the cross-border supply of reinsurance services in Singapore.

The few provisions which are not in force yet relate to insurance funds and margins of solvency.

The MAS has, on 31 December 2003, issued regulations including the following, which are also operative from 1 January 2004:

• Insurance (Approved Marine, Aviation and Transit Insurers) Regulations 2003 (S682/2003);

• Insurance (Approved Marine, Aviation and Transit Insurance Brokers and Approved Reinsurance Brokers) Regulations 2003 (S681/ 2003);

• Insurance (Authorised Reinsurers) Regulations 2003 (S680/2003); and

• Insurance (Transitional and Savings Provisions) Regulations 2003 (S687/ 2003).

Monetary Authority of Singapore (Amendment) Act 2003 (A24/ 2003)

The Monetary Authority of Singapore (Amendment) Act 2003 will be effective from 1 January 2004.

Among other changes, the Monetary Authority of Singapore (‘MAS’) Act (Cap 186) has been amended to allow the MAS to grant credit facilities to a financial institution or class of financial institutions for money market operations. The phrase ‘money market operations’ is defined to mean any transaction, undertaken by the MAS as the central bank, to manage liquidity in the banking system. The MAS is also empowered to make loans or advances to financial institutions for the purpose of safeguarding the stability of the financial system or public confidence in the financial system.

Computer Misuse (Amendment) Act 2003 (A25/2003)

The Computer Misuse (Amendment) Act was passed by Parliament on 10 November 2003 and gazetted on 12 December 2003. The changes have not come into force yet. The Computer Misuse Act (Cap 50A) will be amended for various purposes including:

• to insert a new s 12A empowering the Commissioner of Police or any person authorised by him to compound offences under the Act that are prescribed as compoundable offences; and

• to insert a new s 15A to allow necessary measures to be taken to prevent or counter any threat to a computer or computer service. Such measures may be taken by an authorised person or organisation if the Minister of Law certifies that he is satisfied that such measures are necessary for the purposes of preventing or countering any threat to the national security, essential services, defence or foreign relations of Singapore. If an offence is disclosed in the course of or pursuant to the exercise of the powers authorised by the Minister under the new s 15A, the first information report for that offence cannot be disclosed in court or to the defence counsel. The particulars of the informer of the offence is also protected from disclosure or discovery.

Consumer Protection (Fair Trading) Act 2003 (A27/2003)

The Consumer Protection (Fair Trading) Act 2003 (No 27 of 2003) (‘Act’) was passed in Parliament on 11 November 2003 and gazetted on 26 December 2003. Pursuant to the Consumer Protection (Fair Trading) (Commencement) Notification 2003, the Act will come into operation on 1 March 2004.

The object of the Act is to protect consumers from unfair practices by giving to a consumer who has entered into a consumer transaction involving an unfair practice the right to bring an action in a court to obtain relief and allowing a consumer to cancel certain contracts within a cancellation period.

Regulation of Imports and Exports (Amendment) Act 2003 (A28/2003)

The Regulation of Imports and Exports Act (Cap 272A) has been amended with effect from 1 January 2004 to provide for changes including the following:

• section 3(2) is amended to enable the making of regulations to prohibit the exportation of certain goods except in compliance with conditions imposed in regulations made under the Regulation of Imports and Exports Act for the purpose of complying with any preferential tariff arrangement or agreement between Singapore and a country or territory outside Singapore;

• a new s 28A has been inserted to make it an offence for any person who imports, exports or tranships goods to apply an incorrect trade description to those goods, or to have in his possession any goods to which an incorrect trade description has been applied. In particular, s 28A(3) provides that, where the goods are for export or transhipment and the ultimate destination of the goods is a foreign country which has entered into a prescribed agreement with Singapore, a trade description applied to such goods shall be treated as being incorrect if it is not in accordance with any rules of origin specified in that agreement; and

• section 31 is amended to provide for the disclosure of information received under the Act for the purpose of complying with any provision requiring such disclosure in a prescribed agreement between Singapore and a foreign country, subject to certain conditions.

For the purposes of s 28A(3) and s 31, the Regulation of Imports and Exports (Prescribed Agreements) Regulations 2003 (S631/2004) is enacted with effect from 1 January 2004 and provides for the United States-Singapore Free Trade Agreement as a prescribed agreement.

Planning (Amendment) Act 2003 (A30/2003)

Among other things, the Planning Act (Cap 232) is amended with effect from 10 December 2003 to introduce a new tax, the temporary development levy and to update the definition of the Development Baseline.

Brief highlights are as follows:

• section 3(3) is amended to provide that the use and operation as two or more separate entities of any building approved for any use specified in the Second Schedule (inserted by cl 18) involves a material change in the use of the building;
• section 35(1) is amended to provide that development charge will not be payable in respect of development of land authorised by a planning permission or conservation permission which is granted for a specified period of 10 years or less;
• section 36 is amended to update the definition of the Development Baseline.
• a new s 39A provides that the Minister for National Development may remit the development charge payable by any person in whole or in part; and
• there is introduced a new Part VA (consisting of new ss 40A to 40D) relating to the imposition of a temporary development levy. New s 40A provides for the imposition of a new tax (temporary development levy) in respect of the grant of planning permission or conservation permission which is for a specified period of 10 years or less and sets out the basis for determining the temporary development levy.

Pursuant to s 12 of the Planning (Amendment) Act, s 36 of the Planning Act will eventually be repealed and reenacted to further revise the definition of Development Baseline to disregard any development for the land as allocated in:

Section 12 of the Planning (Amendment) Act is not in force yet.

To implement the changes brought about by the Planning (Amendment) Act 2003, the Minister for National Development has enacted the following rules:

• Planning (Development Charge — Exemption) (Amendment No 3) Rules 2003 (S580/2003);
• Planning (Fees) (Amendment No 2) Rules 2003 (S579/2003);
• Planning (Temporary Development Levy — Exemption) Rules 2003 (S578/2003);
• Planning (Temporary Development Levy) Rules 2003 (S577/2003); and
• Planning (Hotel Concession) Rules 2003 (S576/2003).

Consumer Protection (Fair Trading)(Cancellation of Contracts) Regulations 2003 (S620/2003)

The Consumer Protection (Fair Trading) Act (Act 27 of 2003) (‘Act’) comes into operation on 1 March 2004.

One of the objectives of the Act is to provide for a cooling-off period for direct sales and time share contracts. Pursuant to s 11 of the Act, the Minister for Trade and Industry is empowered to make regulations allowing a consumer to cancel certain contracts within a specified cancellation period.

In exercise of his powers under s 11, the Ministry of Trade and Industry has enacted the Consumer Protection (Fair Trading) (Cancellation of Contracts) Regulations 2003 (‘Regulations’). The Regulations are also effective from 1 March 2004.

Right to cancel contract
Essentially, the Regulations impose a three-day cooling-off period for direct sales and time share contracts (‘regulated contracts’) during which such contracts may not be enforced and the consumer may cancel the contract by notifying the supplier in the prescribed form.

The three-day cooling-off period starts running after the day on which the regulated contract is entered into. However, if the prescribed consumer information notice (which provides the consumer with information on his right to cancel) has not been brought to the attention of the consumer before or at the time when the regulated contract is entered into, the three-day period will start running after the day on which the consumer information notice is subsequently brought to the attention of the consumer.

In calculating the three-day period, Saturdays, Sundays and public holidays are excluded.

A ‘time share contract’ is defined in the Act to mean a contract which confers or purports to confer on an individual time share rights that are exercisable during a period of not less than three years.

A ‘direct sales contract’ is defined in the Regulations to mean a consumer transaction which is entered into:

(a) during an unsolicited visit by a supplier to:

(i) the place of residence of the consumer or another person; or
(ii) the place of business of the consumer;

(b) during a visit by a supplier to any place referred to in para (a) at the express request of the consumer where the goods or services to which the contract relates are other than those for which the consumer requested the visit of the supplier, provided that when the visit was requested the consumer did not know, or could not reasonably have known, that the supply of those other goods or services formed part of the business activities of the supplier; or

(c) after an offer was made by the consumer in respect of the supply by the supplier of the goods or services in the circumstances referred to in para (a) or (b).

Excluded contracts
Not all direct sales and time share contracts are subject to the Regulation. Excluded contracts include:

• transactions which are listed in the First Schedule to the Act:

- acquisition of an estate or interest in any immovable property (but not including any lease of residential property granted in consideration of rent or any time share contract);
- services provided under a contract of employment; or
- any transaction or activity that is regulated under the Banking Act (Cap 19), Commodity Trading Act (Cap 48A), Finance Companies Act (Cap 108), Financial Advisers Act (Cap 110), Insurance Act (Cap 142), s 28 of the Monetary Authority of Singapore Act (Cap 186), Money-Changing and Remittance Businesses Act (Cap 187), Moneylenders Act (Cap 188), Pawnbrokers Act (Cap 222), and Securities and Futures Act (Cap 289).

• any lease of residential property;
• any contract for the supply of goods or services intended for business use; and
• any contract under which the total payments to be made by a consumer do not exceed $50.

Effect of cancellation of contract
Where a contract is cancelled under the Regulations, the contract shall cease to be enforceable and any sum which the consumer has paid under the contract to the supplier, or to any person who is the agent of the supplier, shall be repaid to the consumer by the supplier. Until he is repaid, the consumer has a lien on the goods in his possession.

Further, any security which the consumer has provided in relation to the contract shall be treated as not having had effect and any property lodged with the supplier solely for the purposes of the security shall be returned by him;

In the case of a trade-in arrangement or in the event the contract is cancelled, the supplier shall either:

(a) return the goods delivered by the consumer under the trade-in arrangement to the consumer in a condition substantially the same as when they were delivered by the consumer; or
(b) pay to the consumer a sum equal to the trade-in allowance.

When a consumer recovers an amount equal to the trade-in allowance, then, if the title of the consumer to goods delivered by the consumer under the trade-in arrangement did not pass from the consumer, the title vests in the person entitled to the title under the trade-in arrangement.

A breach of any duty imposed by the Regulations on a supplier or consumer shall be actionable as a breach of statutory duty in a court.

If, apart from these Regulations, a consumer could have cancelled the contract under any rule of law or any contractual right or other arrangement with the supplier, the fact that the consumer has cancelled the contract pursuant to these Regulations shall not prejudice his right to any compensation that he would have if he had cancelled the contract under that rule of law, contractual right or arrangement.

Return of goods by consumer on cancellation of direct sales contract
A consumer who has, before cancelling a direct sales contract, acquired possession of any goods by virtue of the direct sales contract is obliged to return the goods to the supplier, subject to any lien that he may have on the goods. Until they are returned, the consumer is under a duty to retain possession of the goods and to take reasonable care of them.

However, the consumer shall not be under a duty to return:

In such an event, the consumer shall be under a duty to pay reasonable compensation for the supply of the goods and for the provision of any service in connection with the supply of the goods before the cancellation.

Compensation for services on cancellation of direct sales contract
Where a consumer cancels a direct sales contract, the consumer is under a duty to pay reasonable compensation for the services supplied under the contract before the cancellation.

No imposition of additional duty or liability on consumer
The Regulations prohibit a supplier from introducing a term in the contract to impose any additional duty or liability on the consumer in relation to the duties imposed by the Regulations. Any term in a contract which provides to the contrary will be void to the extent of such inconsistency.

Regulation of Imports and Exports (Chewing Gum) (Amendment) Regulations 2003 (S632/2003)

Regulation 3 of the Regulation of Imports and Exports (Chewing Gum) Regulations (Reg 4) prohibits the importation into Singapore of any chewing gum.

The Regulations are amended with effect from 1 January 2004 to introduce a new Reg 3A which provides for an exception to the general prohibition against importation of chewing gum into Singapore.

Pursuant to Reg 3A, the prohibition shall not apply to any chewing gum with therapeutic value and which satisfy the specified conditions (depending on whether the chewing gum is a medicinal product or an oral dental gum).

The term ‘medicinal product’ has the same meaning as in s 3 of the Medicines Act (Cap 176), while the term ‘oral dental gum’ means chewing gum for use in promoting dental health or oral hygiene.

Regulation of Imports and Exports (Amendment) Regulations 2003 (S633/2003)

Regulation 3 of the Regulation of Imports and Exports Regulations (Reg 1) provides that no goods shall be imported into Singapore, exported out of Singapore, or transhipped in Singapore except in accordance with a permit granted by the Director-General of Customs.

Regulation 6 provides for certain goods, the import, export or transhipment of which is prohibited. Regulation 6 is amended with effect from 1 January 2004 to provide that there shall be no exportation from Singapore to the United States of America of the specified textiles and clothing products unless, where any part of the manufacture of the goods is carried out or procured by any person in Singapore, such person is registered with the Director-General under Reg 37.

Regulation 37 provides for the maintenance of registers by the Director- General. Regulation 37 is amended with effect from 1 January 2004 to empower the Director-General to maintain a register of any person required to be registered under the Regulation of Imports and Exports Regulations and to provide for the registration of persons under Reg 37.

Central Provident Fund Act (Amendment of First Schedule) (No 2) Notification 2003 (S657/ 2003)

Effective from 1 January 2004, CPF contributions are payable in respect of an employee’s salary subject to a maximum monthly salary of S$5,500 (previously S$6,000). No CPF contribution is payable in respect of the employee’s monthly salary in excess of S$5,500.

Accordingly, the employer’s portion of the CPF contribution is subject to a maximum of S$1,815 (previously S$1,980) and the amount which may be recovered from the employee’s salary is S$1,100 (previously S$1,200).

Insurance (Intermediaries) Regulations 2003 (S683/2003)

The Insurance (Intermediaries) Regulations 2003 are operative from 1 January 2004. Among other things, the Regulations 2003 set out the financial requirements to be satisfied by insurance brokers.

Minimum paid-up share capital
An applicant who intends to be registered as a direct insurance broker, a general reinsurance broker or a life reinsurance broker shall have and maintain a paidup share capital of an amount not less than S$300,000.

If an applicant intends to be registered as an insurance broker in respect of more than one type of insurance broking business, it must have and maintained a paid-up share capital of an amount not less than the aggregate of the amounts of paid-up share capital specified above in respect of each of those businesses.

This requirement applies equally to exempt insurance brokers.

Professional indemnity insurance
The limit of indemnity to be covered under a professional indemnity insurance policy for an applicant who intends to be registered as a direct insurance broker, a general reinsurance broker or a life reinsurance broker shall be an amount of not less than S$1m, under which the deductible allowed shall be:

(a) where the applicant is in its first financial year of operation, not more than 20% of the paid-up capital; and
(b) in any other case, not more than 20% of the applicant’s net asset value as at the end of its preceding financial year.

This requirement applies equally to licensed financial advisers under the Financial Advisers Act (Cap 110) and holders of a capital markets services licence under the Securities and Futures Act (Cap 289) who are exempt from registration as insurance brokers.

Net asset value
The net asset value to be maintained at all times by any registered insurance broker shall be an amount that is not less than 50% of the minimum paid-up share capital required to be maintained by the registered insurance broker. This requirement applies equally to exempt insurance brokers.

Annual fees
A registered insurance broker is required to pay to the Monetary Authority of Singapore the following annual fees:

(a) if it is registered as a direct insurance broker, an annual fee of S$7,000;
(b) if it is registered as a general reinsurance broker, an annual fee of S$5,000; or
(c) if it is registered as a life reinsurance broker, an annual fee of S$2,500.

The annual fee is payable on or before 1 January of every year.

A registered insurance broker who is licensed to negotiate a contract of insurance with a foreign insurer under a foreign insurer scheme is required to pay an annual fee of S$5,000 on or before 1 January of every year.

Returns and documents
The Insurance (Intermediaries) Regulations 2003 also provide for the returns and documents to be lodged by registered and exempt insurance brokers.

Elizabeth Wong
Allen & Gledhill