Export controls

General controls

What general controls are imposed on exports?

Goods may be exported to any country except Israel. Exports are controlled only in certain cases as follows:

  • gazetted or controlled goods (usually this applies when the goods are in short supply);
  • goods sensitive in nature and strategic or hazardous items; and
  • goods regulated or prohibited by international agreements to protect endangered wildlife species.

There are two categories of controls on items for export:

  • items that are absolutely prohibited from being exported to all countries, for example turtle eggs, rattan, arms and related materials, petroleum and petroleum products; and
  • products that require an export licence and are subject to government control, for example livestock and livestock products, grains, minerals and toxic or hazardous materials.

MITI and the Ministry of Domestic Trade, Co-operatives and Consumerism administer the requisite licences for most of the controlled goods.

Government authorities

Which authorities handle the controls?

The Royal Malaysian Customs Department (RMCD) is responsible for the enforcement of customs and related laws, including issuance of legally binding advance rulings on valuation and classification matters, among others. Matters in dispute (eg, product classification and valuation of goods for customs purposes) can be brought before the CAT.

Special controls

Are separate controls imposed on specific products? Is a licence required to export such products? Give details.

Yes. The Strategic Trade Act 2010 (STA) was enacted to strengthen the country’s ability to curb exports and transhipment of strategic items and technology, including arms and related material (eg, military items; nuclear materials, facilities and equipment; special materials and related equipment; material processing; sensors; lasers; navigation and avionic equipment; and electronics and computers) as well as activities that will or may facilitate the design, development, production and delivery of weapons of mass destruction). The STA is administered by MITI.

The STA controls the transactions of strategic items, unlisted items and restricted activities.

A special permit is required for transactions of strategic items or of unlisted items to a restricted end user, while transactions of strategic items or unlisted items to a prohibited end user are not allowed.

For further information, see www.miti.gov.my/index.php/pages/view/2581.

Supply chain security

Has your jurisdiction implemented the WCO’s SAFE Framework of Standards? Does it have an AEO programme or similar?

The authorised economic operator (AEO) is a concept introduced by the SAFE Framework of Standards referring to operators involved in the movement of goods along the international trade supply chain who have achieved the required security standards and are accredited by the member country. The AEO scheme developed by the RMCD is based on a similar concept.

The RMCD AEO website presently lists 59 approved AEO companies (www.customsgc.gov.my).

Applicable countries

Where is information on countries subject to export controls listed?

A definitive and comprehensive list of strategic items is prescribed in the Strategic Trade (Strategic Items) Order 2010. Information on the subject items can also be found at www.miti.gov.my/miti/resources/STA%20Folder/PDF%20file/pua_20170331_P.U_.(A)90_.pdf.

Restricted end users and prohibited end users are determined by the Minister of International Trade and Industry through the issuance of a ministerial order, and such an order may include from time to time regimes, countries’ bodies corporate or individuals subject to United Nations Security Council sanctions, as well as any persons of concern to Malaysia.

Currently the list of restricted end users and prohibited end users can be found in the Strategic Trade (Restricted End-Users and Prohibited End-Users) Orders 2010, 2011, 2014 and 2016 (PU(A) 484/2010, PU(A) 150/2011, PU(A) 88/2014, PU(A) 313/2014 and PU(A) 177/2016).

Restricted end users

These are:

  • North Korea and Iran (embargoed and no exception for transit);
  • Democratic Republic of the Congo, Ivory Coast, Lebanon, Sudan and Libya (embargoed and subject to transit permit for military items);
  • Afghanistan, Iraq, Liberia, Rwanda and Somalia (subject to transit permit for military items); and
  • Eritrea (subject to transit permit for restricted military items).
Prohibited end users

These are:

  • various named individuals and entities of the Democratic People’s Republic of Korea included in the List that is established, maintained and updated by the United Nations Security Council pursuant to the United Nations Security Council Resolution 1718 (2006); and
  • various named individuals and the Islamic Republic of Iran included in the List that is established, maintained and updated by the United Nations Security Council pursuant to the United Nations Security Council Resolution 2231 (2015).
Named persons and institutions

Does your jurisdiction have a scheme restricting or banning exports to named persons and institutions abroad? Give details.

Yes - see question 25 for the list of restricted end users and prohibited end users as presently in force under the Strategic Trade (Restricted End-Users and Prohibited End-Users) Order 2010, 2011, 2014 and 2016.

Penalties

What are the possible penalties for violation of export controls?

Both the Customs Act 1967 and the Strategic Trade Act 2010 have their own penalty provisions and in summary provide for the following penalties for violation of export controls:

  • a jail sentence of between two years and life imprisonment, depending on the severity and type of offence; and
  • fines of between 10,000 ringgit and 30 million ringgit.

In addition, in view of the serious repercussions from the misuse of strategic items and unlisted items for the purpose of restricted activities, the STA also imposes capital punishment for certain offences where the breach or offence results in death.