Jun 2010
Following the recent announcement of the Malaysia Strategic Trade Bill 2010 ("STB") in April, Malaysian Trade Ministry ("MITI") invited PwC and a small number of representatives from industry to the very first public round table discussion on the subject.
The key highlights were:
- The Control List will be based on the EU list or according to MITI's language, the UN list;
- MITI will publish the relevant HS codes in respect of each controlled product category description which should help exporters with export license determination;
- Potentially, there will be multiple authorities involved in the licence issuance process and the relevant authorities will be named (abbreviated) on the control list;
- Malaysia STB includes a "Catch All" provision which will apply to unlisted Items;
- There will be a licence fee but the amount has yet to be determined;
- A trade facilitation scheme will be implemented but no details were given;
- Product classification assistance will be available but whether this will be charged for or free has not yet been determined;
- Intention is to control all types of transactions involving strategic goods e.g. export / transhipment / transit / brokering regardless of the end use of the goods. Brokering will include negotiating, arranging or facilitating the purchase, financing, conveying, sale or supply of strategic items. This is an exceptionally wide-ranging measure so could be subject to change;
- It was confirmed that the penalty regime will be harsh - probably the heaviest penalties in the Asia region, including:
- Death; or
- Imprisonment for life; and
- In case of body corporate, minimum fine RM30 million
- Currently MITI is preparing (a) The Order which will include: the control list, the effective date of the Act and it will designate restricted and prohibited end-users; and (b) The Regulation: which will include details of "exempt" persons or activities, prescribe licensing procedures, forms to be used, fee schedule and any other matters including enforcement;
- MITI is hoping that applications for permits or registration can commence within 3 months of the STB (gazetted date target is September 2010); and
- MITI to launch an Industry Outreach Program which will involve events in at least in 4 locations via Kuala Lumpur, Penang, Johor Bahru and East Malaysia (Sabah & Sarawak).
Next steps
Based on the above, if Malaysia intends to implement the STB in December (i.e. 3 months after the gazette) business should now follow developments very closely and start preparing for the new regime by developing internal compliance processes tailored to Malaysia's requirements.
