Transhipment and Country-of-Origin Fraud in Singapore: Why US Enforcement and Tougher Local Prosecution Equal Higher Legal Risk

Trade Compliance | White-Collar Crime

Singapore-based exporters, freight forwarders and their directors are facing growing scrutiny over the true country of origin of goods shipped to the United States. Following a series of high-profile prosecutions and a new US report naming Singapore as part of a global transhipment network, we look at why enforcement is intensifying on both sides of the Pacific, why more prosecutions in Singapore are likely, and how legal advice can help before, during and after a compliance issue arises.

In the last two years, both the United States and Singapore have sharply increased scrutiny of transhipment and country-of-origin declarations, and criminal charges have followed.

Getting the country of origin wrong, whether deliberately or through poor internal controls, is no longer a minor issue.

It can result in criminal prosecution, the freezing of company and personal assets, and lasting reputational damage.

This article sets out:

• Why the US government is intensifying its focus on transhipment fraud and trade compliance
• Why Singapore is taking a tougher line against errant companies and individuals, and why more prosecutions of this kind are likely
• Where a lawyer can help, from pre-emptive compliance advice to defending criminal charges

TRANSHIPMENT FRAUD AND TRADE COMPLIANCE

Successive rounds of US tariffs and export controls against China have created a strong financial incentive to disguise the true origin of goods before they reach the US market. Washington has responded with a marked escalation in enforcement.

• In August 2026, Singapore was named in the White House Office of Trade and Manufacturing Policy’s “Great Transshipment Scam” report, alleging that Chinese-made goods are routed through a “shadow transshipment network”.
• The Singapore Government has responded to say that it does not “condone businesses using fraudulent and dishonest means” to circumvent the laws of other countries.
• In July 2026, Singapore Police seized a Good Class Bungalow worth approximately S$55 million and around S$1 million in bank funds, in a case involving at least three men charged with fraud by false representation over the purported movement of NVIDIA AI chips in breach of US export controls.

SINGAPORE IS TAKING A TOUGHER LINE, AND MORE PROSECUTIONS ARE LIKELY

On 9 June 2025, Singapore Customs and the Ministry of Trade and Industry issued a joint media release, together with Customs Circular No. 06/2025, reminding all importers, exporters and transhippers that:

• the country of origin declared on a permit must be the country where the goods were wholly obtained or substantially transformed;
• transhipping goods through Singapore does not, on its own, make them “Singapore-origin”;
• the origin field on a permit is mandatory and can never be left blank or marked “N/A”; and
• supporting documentation, including manufacturing records, cost statements and invoices, must be kept for at least five years.

In June 2026, three individuals and three Singapore-registered companies were charged over an alleged scheme, running from August 2022 to June 2025, to falsely declare over S$23 million (around US$18 million) of China-made mattresses as Singapore-origin goods to evade US anti-dumping duties on Chinese mattresses.

Singapore Customs has said that such conduct “undermines the integrity of international trade documentation and can damage Singapore’s standing as a trusted and reliable global trading hub.”

A single false country-of-origin declaration can now trigger criminal prosecution in Singapore, asset seizure, and parallel exposure in the United States.

With heightened scrutiny from the US, a tightened domestic compliance regime, and Singapore Customs signalling its intent to protect Singapore’s standing as a trading hub, we expect that similar prosecutions, against both companies and the individuals who sign off on permits and certificates of origin, are highly likely to continue.

WHERE A LAWYER CAN HELP

1. Pre-emptive trade compliance

The most effective time to involve a lawyer is before a problem arises.

• Reviewing supply chains, manufacturing records and certificates of origin to identify products or transactions at higher risk of being mischaracterised.
• Assessing whether existing declarations are consistent with the “wholly obtained or substantially transformed” formulation under Circular No. 06/2025.
• Advising on documentation retention, permit sign-off processes and internal escalation procedures.

2. Strengthening and toughening internal compliance measures

As enforcement expectations rise, businesses need compliance measures that keep pace.

• Designing or upgrading trade compliance policies and standard operating procedures for staff who prepare, verify or approve permits and certificates of origin.
• Training finance, logistics and management staff to recognise red flags in supplier documentation and pricing.
• Building internal reporting and whistleblowing channels so issues surface internally, and can be addressed, before they reach a regulator.

3. Investigations, criminal representation, and legal advice

Where a compliance issue has already emerged, or Customs has already made contact, early legal advice matters.

• Representing companies and individuals under investigation by Singapore Customs, the Commercial Affairs Department, or facing parallel enquiries from US authorities.
• Advising on and managing responses to information requests, audits and potential voluntary disclosures.
• Providing criminal defence for companies and individuals who have been charged, from the investigation stage through to trial.

Our firm regularly advises companies, their directors and employees under investigation and/or facing prosecution for fraudulent and other errant trade practices. If you are concerned about your existing legal exposure, please contact us for confidential advice.

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