Requirement for all ITMOs Authorised under Singapore’s IAs

Requirement for all Internationally Transferred Mitigation Outcomes (ITMOs) Authorised under Singapore’s Implementation Agreements (“IAs”) to be first either sold or transferred to Eligible Entities bona fide

To grow Singapore's carbon services and trading ecosystem, we require all ITMOs* authorised under Singapore’s IAs to be first either sold or transferred to an Eligible Entity bona fide (“Qualifying Sale or Transfer”).

An Eligible Entity refers to:

an entity that:

(a) is incorporated (in the case of a company) or otherwise registered in Singapore, and is a tax resident of Singapore;

(b) is carrying on a trade or business in Singapore^; and

(c) has at least 3 local employees, excluding company directors, who are Singapore citizens or Singapore permanent residents and who and whose employer make CPF contributions); or
the Singapore Government (including entities appointed by the Singapore Government to act on its behalf to receive ITMOs) and statutory boards.

* Excluding OMGE (Overall Mitigation in Global Emissions) and SOP (Share of Proceeds) units. For avoidance of doubt, OMGE and SOP units are not required to be sold or transferred to an Eligible Entity.

^ An entity is carrying on a trade or business in Singapore if it has gains or profits accruing in or derived from Singapore, or received in Singapore from outside Singapore, upon which income tax is payable pursuant to section 10(1)(a) of the Income Tax Act.

Definition of Qualifying Sale or Transfer of ITMOs to an Eligible Entity

Where the project developer (referred to in the IA process as “Project Applicant” or Project Participant”, depending on the stage of the process) is an Eligible Entity, the Qualifying Sale or Transfer refers to the issuance of ITMOs by the carbon standard registry (e.g. Verra, Gold Standard), into the project developer’s registry account.

Where the project developer is not an Eligible Entity, the Qualifying Sale or Transfer is the first transfer of ITMOs out of the project developer’s registry account, after the ITMOs have been issued by the carbon standard registry to the project developer. This Qualifying Sale or Transfer must be to an Eligible Entity.

Action Needed

All project developers must take the following actions to comply with Singapore’s requirements (ref. Table 1).

Table 1

Project Stage of IA	Requirements	Actions needed by Project developers
Stage A: Submission of Mitigation Activity Note of Intent to the Joint Committee	Submit, as part of the Mitigation Activity Note of Intent, an Undertaking to Comply with Singapore’s requirements for participation under the Implementation Agreement (the “Undertaking”)	(1) Submit to the Joint Committee the Undertaking specified at Section F of the Mitigation Activity Note of Intent.
Stage C: Submission of Request for Authorisation (including the Ghana-Singapore Authorisation Application Form) to the Joint Committee	Submit, as part of the Ghana-Singapore Authorisation Form, an Additional Undertaking to Comply with Singapore’s requirements for participation under the Implementation Agreement (the “Additional Undertaking”)	(2) Submit to the Joint Committee the Additional Undertaking specified at Section E of the Ghana-Singapore Authorisation Form.
Stage D: Submission of ITMO Issuance Application Form to the Joint Committee	The ITMOs* that are the subject of the application must be: currently owned by Eligible Entities; or sold or transferred to Eligible Entities within 24 months following authorisation under the IA *Excluding OMGE and SOP units	(3) Submit any one of the following (A or B) to the Joint Committee: (A) Where a person to which the ITMOs will be sold or transferred to (“Buyer”) has already been identified: i. Buyer’s ACRA business profile ii. Full name and contact details of the Buyer’s directors iii. Number of local employees employed by the Buyer (excluding the Buyer’s directors) iv. Documents showing that the Buyer and the project developer have reached an agreement either for the sale or transfer of the ITMOs from the project developer to the Buyer, or for the project developer to trade the ITMOs through the Buyer. The documents must clearly indicate the relevant mitigation activity, volumes of ITMOs transacted or to be transacted, and the names of both the project developer and Buyer; or v. Other documentary evidence (e.g. registry transaction records) that shows that the ITMOs are already being held in the name of Eligible Entities. OR (B) Where Buyers for the ITMOs have not yet been identified: i. An undertaking, as set out at Section C of the Ghana-Singapore ITMO Issuance Application Form, that the project developer will either sell or transfer the ITMOs to an Eligible Entity or trade the ITMOs through an Eligible Entity within 24 months of the authorisation of issuance of the ITMOs under the Singapore-Ghana IA , and submit evidence of the transaction and the Eligible Entity’s details to the Singapore Government within 3 months of the transaction. The evidence and details to be submitted are as per those set out at (A)(i) – (v) above.

Request for Supporting Evidence

Project developers may also be required to provide evidence that ITMOs previously authorised under Singapore’s IAs have either been sold or transferred to Eligible Entities. The Singapore Government will request such evidence when the project developers have previously successfully applied for corresponding adjustments of ITMOs under one of Singapore’s IAs and are applying for the authorisation of additional ITMOs. The Singapore Government may also request the evidence at any time up to 3 years from the date of the relevant ITMOs’ authorisation. The evidence requested may include:

(a) Registry transaction records showing that past ITMOs authorised under the IA were transferred to the Eligible Entities;

(b) Sales receipt showing the sale of past ITMOs authorised under the IA to Eligible Entities (receipt must clearly indicate the relevant mitigation activity, volumes of ITMOs transacted, and the names of both the project developer and Buyer); and

(c) Other documents that show clearly show ownership transfer of past ITMOs authorised under the IA to Eligible Entities.
The Singapore Government may directly contact the Eligible Entities to provide supporting evidence of their eligibility, including:

(a) Last 24 months of audited financial statements; and

(b) Last 24 months of employee records.

The Singapore Government may, on a case-by-case basis and as appropriate, consider other documents submitted by the project developers as evidence for the fulfilment of the above requirements.

The Singapore Government may also, on a case-by-case basis, and as appropriate, waive the requirement for ITMOs authorised under Singapore’s IAs to be first sold or transferred to an Eligible Entity. For instance, the Singapore Government may allow the ITMOs to be first sold or transferred to an entity that does not carry out trade or business in Singapore in a specific case if it assesses that the sale or transfer will bring benefits to Singapore. Project developers seeking waiver of the requirement are to write to Climate_Cooperation@pmo.gov.sg prior to the intended sale or transfer.