Ministry of Agriculture and Food Industries, which is also a member of Malaysia’s ASW Delegates to ASW Technical WG, has initiated the groundwork necessary to enable the exchange of e-Phyto certificates to facilitate the cross-border movement of agricultural goods.
Further to the endorsement of new ATIGA Operational Certification Procedure and revised Form D as well as its overleaf note by the ASEAN Free Trade Area Council in September 2021, Malaysia is committed to ensuring that its National Single Window’s back-end systems can cater to the new requirement in accommodating multiple reference documents for back-to-back proof of origin for consolidated shipments in 2022.
The e-Animal Health has been identified as the next e-document to be exchanged through ASW after the e-Phyto certificate. The groundwork for AMS to prepare for the exchange of e-Animal Health is contingent on a
readiness survey which will be conducted by relevant sector bodies. The outcome of the survey would serve as an input for developing the work plan in 2022.
Cognisant of ASW as a progressive regional trade facilitation platform which significantly lessens trade paperwork, promotes trade transparency as well as reduces costs associated with cross-border trade, several Dialogue Partners namely United States of America (USA), the PRC, ROK and Japan have respectively expressed interest to exchange trade documents with AMS through the platform. Realising the potential benefits which could be reaped through trade documents exchange with Dialogue Partners, Malaysia and other AMS are at the initial stage of engaging the interested parties to identify mechanisms and requirements that need to be in place to materialise the exchange. In 2022, Malaysia alongside other AMS will undertake work on establishing a legal framework to enable the exchange of e-documents with Dialogue Partners.
Facilitating Trade in a Secure Trading Environment
Strategic Trade Act 2010 Anniversary Celebration and Conference
The year 2021 marks a decade of Malaysia’s efforts in implementing the Strategic Trade Act (STA) 2010, a comprehensive legislation to prevent the proliferation of weapons of mass destruction and their delivery systems as mandated under United Nations Security Council Resolution 1540. On 9 April 2021, YB Datuk Lim Ban Hong, Deputy Minister of International Trade and Industry officiated the 10th Anniversary Celebration of STA 2010 held at MITI Tower. The programme conducted in a hybrid mode commenced with a conference on 8 April 2021 with a total of 1,243 attendees including those from like-minded economies, namely Belgium, Cambodia, Hong Kong SAR, Indonesia, Japan, Philippines, Singapore, Thailand and US.
The highlight of the programme was the award-giving ceremony with Avago Technologies (Malaysia) Sdn.
Bhd., Keysight Technologies Malaysia Sdn. Bhd. and Petronas Chemicals Group Bhd. receiving the STA 2010 Compliance Award. The companies were assessed based on their unwavering commitment in implementing a robust internal compliance programme (ICP) to ensure adherence to STA 2010 as well as the companies’
involvement in export control programmes organised by MITI. STA 2010 facilitates the trade of strategic goods through ICP where companies are encouraged to put in place a set of internal policies and procedures for compliance with national laws and regulations.
ICP companies have access to bulk and multiple use permits under the STA 2010, in addition to the normal single permit. A total of 67 companies hold an ICP status as of 31 December 2021.
The Deputy Minister of International Trade and Industry, YB Datuk Lim Ban Hong has also announced the establishment of the Malaysia Strategic Trade Control Community (MYSTCC). MYSTCC aims to provide a platform for networking, learning best practices and understanding current and future developments in managing strategic trade goods. It will also pool expertise from the public and private sector, academia and research institutions, who will play a supporting role to export control administrators or managers from various industry sectors on compliance to the domestic and foreign countries’ export control legislation. The symbiotic relationship is to ensure that stakeholders in the community can prosper in a secure trading environment while staying resilient in managing global supply chain challenges.
Authorised Economic Operator – Internal Compliance Programme Pilot
The Government on 11 December 2020 agreed to implement the National Authorised Economic Operator (AEO) Programme spearheaded by the RMCD through the commencement of the AEO-ICP pilot project. The National AEO by RMCD is based on the World Customs Organisation SAFE Framework of Standards referring to operators handling the movement of goods in the domestic and international supply chain that comply with global security standards with added value, incorporating domestic regulatory standards and requirements. The AEO’s significant benefits, among others, are fast clearance, minimal documentation, deferred duty payment, simplified drawback claims and post-clearance audit. The ICP, having many similarities with the AEO trusted partner programme, is onboard in the pilot project. The AEO National status accorded to companies with ICP status will allow them to enjoy several benefits from the importation of raw materials to exporting goods which is end-to-end trade facilitation.
The AEO System Integration with the National Single Window platform embedded with blockchain technology serves as an OSC that will enhance efficiency and effectiveness of the government delivery system, increase synergies between public and private sectors, enhancing national productivity as a whole.
Permit Application
Year 2021 presented challenging times, with the extension of the MCO throughout Malaysia and lockdowns in other countries impacting all sectors. The total STA permit issued recorded a 10.4% decline compared to 2020.
As at 31 December 2021, 3,101 ePermit STA were issued.
The total of ePermit STA approved for 2016-2021 can be seen in the table below:
While many businesses were affected, sectors such as E&E, medical devices and automotive continue to advance rapidly. Such development provides an opportunity for
Malaysia to attract new investments and new economic opportunities pursuing R&D in aerospace and electronic clusters operating within a safe and secure environment.
Year 2016 2017 2018 2019 2020 2021
No. of Permit
Issued
2,470 2,899 2,852 3,096 3,459 3,101
ECONOMIC OUTLOOK 2022
Despite the global challenges and increasingly competitive landscape, the Government of Malaysia continues to champion the forward-looking growth framework called ‘Malaysia’s New Investment Agenda Based on NIA’ which was announced on 21 April 2021. The new agenda will drive high-technology and innovative investments, balancing economic and environmental sustainability, as well as reducing dependence on foreign labour, consistent with global benchmarks in ESG.
Malaysia remains a competitive nation in attracting strategic and high-value investments in key economic areas in the primary, manufacturing and services sector.
Investors have placed high confidence towards Malaysia in setting up their operations, as well as expanding their existing investments and making Malaysia as their regional hub in ASEAN. In 2021, Malaysia successfully attracted a total of RM177.8 billion approved investments in the manufacturing, services and primary sectors, involving 3,037 projects from January to September.
This represents a 51.5% increase compared to the same period last year, which demonstrated Malaysia’s competitiveness in attracting high-quality technology and innovative investments.
In recent years, a holistic approach in transforming Malaysia’s investment ecosystem has been undertaken which consisted of the ongoing works of MITI and the Ministry of Finance’s joint effort in reforming Malaysia’s key investment legislations, including the Promotion of Investments Act 1986 and the Income Tax Act 1967.
In addition, the Government of Malaysia had also implemented a series of targeted economic stimulus in improving various economic activities, as well as balancing the livelihood of the rakyat. Malaysia recognises that these reforms are needed for an inclusive and sustainable post-COVID-19 future, including equitable opportunities for the rakyat.
As Malaysia continues to further liberalise and expand its market access in the world, its bold approach in participating actively in various regional and international
fora in the ASEAN, APEC and WTO, as well as mega free trade agreements such as the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Trans-Pacific Partnership, will catapult Malaysia into a competitive nation by 2030, as aspired for in the 12MP. Notably, Malaysia will also announce the NIMP 2021-2030 this year which would be aligned with our key national policies. In addition, Malaysia will conduct trade and investment missions to strategic economies which will boost investors’ confidence towards the country as their key investment destination in the region.
Without doubt, Malaysia is on the right track to attract foreign and domestic investments of high-quality projects based on favourable projections of economic growth of around 5.5% in 2022. Coupled with continued policy support and resumption of economic activities, Bank Negara Malaysia also reported that in 2022, the domestic economy is expected to remain on a recovery path, supported by the continued expansion in global demand and higher private sector expenditure, as well as the positive outlook in major domestic and foreign investment projects.