SINGAPORE - Dealers who transact in cash precious stones and metals worth more than $20,000 will have to report the deal to the Commercial Affairs Department (CAD).

This also applies to equivalent foreign currency transactions, and must be done within 15 business days of the sale, said the CAD on Wednesday.

The move, which will take effect from Oct 15, was mooted in May. It also follows the amendment of the Corruption, Drug Trafficking and Other Series Crimes (Confiscation of Benefits) Act in Parliament in July.

"Requiring dealers of precious stones and metals to report large cash transactions will reduce risks and facilitate the detection, investigation and prosecution of money laundering, terrorism financing and other serious crimes," said the CAD.

Precious stones and metals are portable and valuable, which make them easier targets for criminals to launder illicit funds.

"The risk increases when the transaction is conducted in cash where is is more difficult to trace the origin of the funds," said the white collar crime buster.

The new rules, which are in line with international standards set by the Financial Action Task Force, also require dealers to verify the buyer's identity and if the customer was acting on behalf of a third party.

In such a case, the third party must be identified.

Details of the sale must also be recorded and kept for five years after its submission to the CAD, while dealers are required to implement internal controls as well.

Those that fail to do so will be fined up to $20,000, and may face imprisonment of up to two years.

Earlier this year, the Monetary Authority of Singapore axed the $10,000 note as part of the Government's move to fight money laundering and terrorism financing.