Legal Updates

Legal Updates for February 2023

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 to identify and classify green and transition activities. 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) Do No Significant Harm criteria. The consultation period for the 2023 Consultation Period will end on 15 March 2023, and GFIT intends to issue the final taxonomy by the first half of 2023.

This Update provides a broad outline of the key proposals covered in the 2023 Consultation Paper

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 reciprocal enforcement of foreign judgments. The reciprocal enforcement regime is now set to be consolidated under the Reciprocal Enforcement of Foreign Judgments Act ("REFJA"). The Commonwealth countries with which Singapore has reciprocal enforcement arrangements will be duly transferred to the REFJA from 1 March 2023.

The transfer of Commonwealth countries to the REFJA will also serve to expand the scope of registrable judgments from the listed countries, providing greater efficiency for foreign litigants seeking to enforce their judgments in Singapore. This Update highlights the key features of this development.

Singapore Moves Another Step Closer to Workplace Anti-Discrimination Legislation
Seeking to address how best to create a strong and robust system that will promote workplace fairness, the Tripartite Committee on Workplace Fairness (the "Committee") was formed in July 2021. The Committee released its interim report on 13 February 2023. The Committee’s interim report contains 20 recommendations to enhance workplace fairness. Notably, the Committee recommends that legislation be enacted to implement its recommendations to tackle workplace discrimination. It is proposed that the legislation will run in unison with the Tripartite Guidelines on Fair Employment Practices. Any feedback to the recommendations set out in the Committee’s interim report should be submitted by 13 March 2023.

This Update outlines the recommendations made in the Committee’s interim report and considers the steps that employers should consider in order to remain fair employers.

Nutri-Grade Requirements to be Extended to Freshly Prepared Beverages - Consultation on Proposed New Legislation
In 2022, Singapore introduced a system of Nutri-Grade measures which imposed mandatory nutrition labels and advertising prohibitions for designated beverages. While the measures currently apply only to beverages sold in Singapore in pre-packaged form and from non-customisable automated beverage dispensers, from end-2023, these requirements are set to be extended to freshly prepared beverages for sale in specified settings in Singapore. This would include bubble tea, freshly brewed coffee or tea, and freshly squeezed juices. Additional labelling requirements will also be introduced in respect of both existing designated beverages and freshly prepared beverages.

To facilitate the new measures, the Ministry of Health and the Health Promotion Board have launched a consultation to seek feedback on the proposed new legislation under the Sale of Food Act 1973. Businesses involved in the production and sale of such beverages need to be aware of the proposed measures and how it may affect their operations, and should submit any relevant feedback before the consultation ends on 13 April 2023.

This Update provides a summary of the key changes under the new measures and the proposed new legislation.

Rajah & Tann Singapore Sustainability Update: Potential Legal Recourses for Greenwashing Claims in Singapore
We are pleased to present you our Sustainability Update which shares insights from our Sustainability Partners and experts across sectors and domains on key environmental, social and governance ("ESG") developments and trends.

In this issue, we explore briefly the potential legal recourses which are available to a person making a claim against greenwashing in Singapore. This is a developing area and we invite you to get in touch with our Partners in our Sustainability Practice who are ready to assist you with queries on greenwashing.

ACRA/MAS/MOF Seek Comments On Legislative Amendments to Allow Virtual Meetings for Companies, VCCs and BTs
On 9 February 2023, the Accounting and Corporate Regulatory Authority, Ministry of Finance and Monetary Authority of Singapore jointly announced that they are conducting a public consultation to seek feedback on proposed changes to the Companies Act 1967, Variable Capital Companies Act 2018 and the Business Trusts Act 2004 (collectively, the "Acts"). The public consultation exercise will run from 9 to 20 February 2023.

The key proposed changes to the Acts primarily aim to expressly clarify in the Acts that companies, variable capital companies ("VCCs") and business trusts ("BTs") have the option to conduct fully virtual or hybrid general meetings, and to ensure that the rights of the members of the companies and VCCs and unitholders of BTs to attend and participate in such general meetings are safeguarded. The proposed changes to the Acts are set out in the draft Companies, Business Trusts and Other Bodies (Miscellaneous Amendments) Bill 2023 ("draft Bill"). The proposed draft Bill is stated to come into effect on 1 July 2023.

This Update provides a summary of these key proposed changes.

Resource Sustainability (Amendment) Bill Proposes Regulations to Reduce Packaging and Food Waste
On 6 February 2023, the Resource Sustainability (Amendment) Bill ("Bill") was tabled for First Reading in Parliament. The Bill seeks to amend the Resource Sustainability Act 2019 in these key areas:

• For packaging waste: (i) require registered retailers (prescribed supermarkets, for a start) to collect a charge for each disposable carrier bag provided to customers; and (ii) provide for a beverage container return scheme; and
• For food waste: require (i) segregation and treatment of food waste generated in prescribed buildings (prescribed hotels, shopping malls, and industrial developments, etc); and (ii) reporting on the treatment of food waste.

Government Implements New Measures on Buyers’ Stamp Duty
On 14 February 2023, as part of the Budget Statement for Budget 2023, the Minister for Finance, Lawrence Wong, announced the implementation of an increase in the Buyer's Stamp Duty ("BSD") rates for residential and non-residential properties "to enhance the progressivity of the BSD regime". The new measures have since taken effect from (and including) 15 February 2023.

The measures are expected to affect 15% of residential properties and 60% of non-residential properties. In this Update, we provide a summary of the key changes to BSD rates in the new measures.

Singapore Budget 2023: Moving Forward in a New Era
The Budget Statement for Budget 2023 was delivered on 14 February 2023. Following the lowering of the Disease Outbreak Response System Condition (DORSCON) level from yellow to green on 13 February 2023, Budget 2023 sets out a comprehensive range of measures to deal with the transition to a post-COVID-19 Singapore. This includes the strengthening of Singapore’s social compact, and addressing concerns about inflation and the higher cost of living in Singapore. At a glance, some key measures include:

• Extra financial support to help Singaporeans cope with inflation and cushion the impact of the higher goods and services tax rate;
• S$3 billion enhancement to the Assurance Package, translating to a S$300 to S$650 increase in total cash payouts for each eligible Singaporean;
• S$30,000 increase in the Central Provident Fund ("CPF") housing grant for eligible families purchasing four-room or smaller resale units and S$10,000 for those purchasing five-room or larger flats;
• Raising the CPF monthly salary ceiling from S$6,000 to S$8,000 in 2026;
• The doubling of voluntary Government-paid paternity leave to four weeks for fathers of Singaporean children born on or after 1 January 2024; and
• An increase in the Government’s co-funding support under the Progressive Wage Credit Scheme.

The tax measures and changes announced are categorised as follows:

• Tax Implications on Corporations
• Tax Implications on Individuals
• Encouraging a Culture of Giving
• Increased Tax for Purchases of Higher-value Properties and Vehicles

What is the Applicable Law to Determine Whether a Dispute is Arbitrable at the Pre-Award Stage?
When a party submits that a dispute is not arbitrable, an important threshold question arises: should the issue of arbitrability be considered under the law governing the arbitration agreement or the law of the seat of the arbitration? The distinction is vital as there is no global consensus on the exact scope of what constitutes non-arbitrable disputes.

The Singapore Court of Appeal has answered this question in the landmark decision of Anupam Mittal v Westbridge Ventures II Investment Holdings [2023] SGCA 1, issued earlier this year. The Court adopted a "composite approach", which effectively requires the matter to be arbitrable under both the law of the arbitration agreement and the law of the seat. The court would first look to the law of the arbitration agreement to determine if the dispute is arbitrable. If the law of the arbitration agreement is foreign law, and the dispute is arbitrable under the foreign law, the court would then look to the law of the seat – a dispute that is not arbitrable under Singapore law as the law of the seat would also not be allowed to proceed.

This Update provides a summary of the Court of Appeal's decision and highlights the key holdings in the judgment.

Public Consultation on Proposed Intangibles Disclosure Framework
Intangible assets such as intellectual property and goodwill are important sources of competitive advantage and economic value. However, companies may face challenges in the valuation and reporting of intangible assets. The Accounting and Corporate Regulatory Authority and the Intellectual Property Office of Singapore have thus jointly issued a public consultation paper proposing an Intangibles Disclosure Framework ("Framework") to help businesses disclose and communicate their intangibles.

The Framework outlines the key principles that an enterprise should follow when disclosing their intangibles in a report and provides guidance for enterprises on how they should disclose their intangibles under these principles. Enterprises with intangible assets should be aware of the principles set out in the proposed Framework and submit any feedback they may have by 28 February 2023, the closing date of the consultation.