Jun 2011As one of the authorised enforcement authorities of the Strategic Trade Act (STA), the Royal Malaysian Customs Department (Customs) has announced that it will monitor exports of strategic and unlisted items by requiring the exporter to "self declare" whether the item requires an export permit on a mandatory field appearing on screen via the online customs export declaration system (Dagang Net) starting 1 July 2011. Customs have also indicated that they will begin to "validate" declarations made by exporters.
Our observations
- The Customs laws and STA do not require declarations by the exporter to this effect.
- In practice, however, there may be a general tendency for exporters who are unsure if their goods require an export license under the STA to declare a "no", simply because declaring a "yes" would require a copy of the issued permit to be uploaded.
Implications
We are not sure about the nature of the "validation" that Customs intends to carry out. However, they may expect analyses or evidence to substantiate claims that no permit is required if the goods appear to them to require a permit. Even though there is no requirement in law for the exporter to make the envisaged "self declaration", there is a risk that a self-declaration that is later found to be incorrect constitutes a customs offence. If the self declaration is positive, export of product would not be allowable unless and until the relevant export permit has been obtained.
Failure to respond promptly to Customs' queries may also lead to denial of exports or delays resulting in disruption to the supply chain. Read more for
timeline in obtaining a license.
Recommendations
Exporters who have not yet undertaken a comprehensive review of whether their exports are subject to STA licensing requirements should take immediate steps to do so and document results of analyses and evidence accordingly.
It may be useful to seek consultation from the Strategic Trade Secretariat. Take note, however, that the Ministry of International Trade and Industry does not have a ready process to support this, so they may not be able to respond promptly.
Depending on the nature of your business and exports, the process of determining whether products you export are subject to licensing requirements can be complex and require significant product and regulatory expertise, so you should begin this process as soon as possible. 1 August 2011 is only less than 1.5 months away.
