‘Driving Transformation, Powering Growth’
Industry Outreach Seminar 7 – 8 January 2016
Taipei, Taiwan
Strategic Trade Secretariat
Ministry of International Trade and Industry MALAYSIA
THE STRATEGIC TRADE ACT (STA) 2010
“FACILITATING TRADE IN A SECURE TRADING ENVIRONMENT”
Points to Ponder
Trade Promotion and Strategic Trade Management are two sides of the SAME coin
MITI’s long standing rapport and frequent interactions with the business community has been extremely crucial
in STA 2010 implementation.
TRICKY BALANCE OF:
National and Regional Security
Economic Interest
Responsible Trading Nation Trade Facilitation
Good Diplomatic Relations
Initial Challenges
i. Implementation of STA 2010
• Too many agencies involved in the issuance of permits, different segments ie. policy, licensing, enforcement, technical experts
Best Practice
• Strategic Trade Secretariat, MITI as the focal point
• Establishment of Inter-Agency Consultative Committee in MITI to address issues
Fostering
understanding of the role and work of other agencies.
Trust and mutual respect.
(understanding the scope and expertise)
Ensuring effective communication and information exchange.
(relevant
information and approvals from Police and NACWC)
Establishing
effective leadership among agencies.
(leaders who have the big picture in mind and who do not work in silos)
Securing commitment at all levels.
(establishing
common goals that are linked to agency objectives)
S.T.S
Initial Challenges
ii. Trade Facilitation vs Security Obligations
• Strict regulation to control transit and transshipment
• Permits required for multiple items and clients, hassle for frequent exporters
Best Practice
• Single Online System for Registration and Permit Application, self-declaration
• 5 working days to issue permits, excepts Special Permits)
• Exemption for transit and transshipment for large number of products and destination (95% of
strategic items)
• Bulk and Multiple Permits, valid for 2 year for exporters who fulfill certain requirement (ICP)
Initial Challenges
iii. Low awareness in public and private sectors
• Most Government agencies and industries have minimum exposure to export control and STA 2010 Best Practice
• Frequent outreach and dialogue
• Strategic collaboration
• Capacity building programs engagements with industry in cooperation with partner countries
• Targeted participants, business friendly visit
• Change in mindset: MNCs and SMEs – different approach needed
• Dedicated webpage on STA 2010 in MITI website, email address ([email protected])
6
ML 10ML 10 • If the aircraft part is designed and used for military, STA permit is required.
• If the aircraft part is designed for military but certified for civil use by the civil
aviation authority, it is excluded from STA permits.
GeneralGeneral • If the aircraft part is designed and used for civil use, it’s not a strategic item and not controlled under STA 2010.
7A0037A003 • If the inertial navigation system is
certified for civil use by the civil aviation authority, it is excluded from STA permits.
9A001 9A003
9A001 9A003
• If the aero gas turbine engines is certified for civil use by the civil aviation authority, it is excluded from STA permits.
Example: Dedicated Outreach/ Dialogue
Description is too general. No indication whether
it is for civil or military use.
Example: Dedicated Outreach/ Dialogue
• Exporters to give more details in the declaration form “aircraft parts for commercial/civil or military use”
• STS coordinate with RMC to do post-shipment evaluation/audit. Targeting companies that export aircraft parts
• Follow-up letters to RMC and industry (AFAM, CAPEX) on this measures.
Example : Dedicated Outreach/ Dialogue
Initial Challenges
iv. Timeline for Implementation
• Too fast implementation will be trade disruptive
• Time required for compliance ie End Use Statement, Internal Compliance Program etc
Best Practice
• Phase implementation of STA 2010
• Pre-Registration to expedite the issuance of permits
• Checklist for ICP
PRE-RE
G – IMPO
RTER DETAILS
10 Jun
STA 2010
25 Mar 5 Apr 6 May 2 Jun 31 Dec
Cabinet
Parliament
Royal Assent
1 Jul 1 Mar
2 0 1 5
Enforcement
Online Permit Application
Permit Validation by Customs
Gazette
2011
Enforcement Category 0 Gazette Regulations
& Orders
1 Jan 1 Apr
2012
e-STA, Outreach, STA Evaluation Training, Capacity Building Programmes,
Enforcement & Investigation, ITT, PF
2013
Phase Timeline
STA Review
2014
Best Practice: Internal Compliance Program
Management Commitment Management Commitment
Screening Process Screening Process
Training Training
Record-keeping Record-keeping Audit
Audit
Elements of ICP Elements
of ICP
1
2
3
4
5
Best Practice: Internal Compliance Program Management commitment
Management commitment
• Nomination of person responsible for ICP and authorised personnel for permit application
• Written policy on export control
• Awareness on export control within company
• Export control clause in sales contract
Screening Process Screening Process
• Screening of products
• Screening of end user
• Screening of end use
• Screening of destination
• Red flag indicators
Export er/
Broker Export
er/
Broker
Know Your Product
Know Your Product
Know Your Customer
Know Your Customer
Red Flag Indicators Red Flag Indicators
Best Practice: Internal Compliance Program
Training Training
• Training plan – for personnel involved in export control (once in 18 months)
• Incorporate export control into training program for all employee
Record keeping Record keeping
• Proper record keeping (6 years)
• Hardcopy / softcopy
Audit Audit
• System audit
• Process audit
• Documentation audit
• Annually
Findings - Common Mistakes
• e
eDelivery Verification Statement
Awareness &
Commitment
Screening & End Use Statement (EUS) Strategic Item
Declaration (K2 Form)
Educating Corrective Improvement
Poor Understanding
Poor Training
Wrong Declaration
Not Serious Communication Breakdown
Poor Screening Lack of Commitments
Poor Record Keeping Lack of Awareness
Thank you
Menara MITI
No. 7, Jalan Sultan Haji Ahmad Shah, 50480 Kuala Lumpur, Malaysia
Q & A
STRATEGIC TRADE SECRETARIAT MITI KUALA LUMPUR