The Strategic Trade Act (STA) 2010: Malaysia s Experience in the Implementation of Strategic Trade Management. Yangon, Myanmar 24 June 2015
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1 The Strategic Trade Act (STA) 2010: Malaysia s Experience in the Implementation of Strategic Trade Management Yangon, Myanmar 24 June 2015
2 THE ENACTMENT AND IMPLEMENTATION OF STA 2010 UNSC Resolution 1540 in 2004 Cabinet - 26 March 2010 Parliament 5 April 2010 (Lower House) 6 May 2010 (Senate) Royal Assent - 2 June 2010 Gazette - 10 June 2010 Gazette of Regulations and Orders 31 December 2010 Enforcement 1 April 2011 Online Permit Application 1 July 2011 Permit Validation (Customs) March
3 OBJECTIVE OF STA 2010 Transit Transshipment Brokering Export CONTROLS (Catch-all) Other activities Goods Listed Unlisted FACILITATES Intangible Technology Software Design Development Production WEAPONS OF MASS DESTRUCTION (WMD) & ITS DELIVERY SYSTEMS 3
4 Challenges Low level of awareness and understanding To implement robust Control system without affecting trade Inadequate Human Resources Limited Expertise Challenges Budget Constraints Inter Agency Coordination New Act, Regulations and Orders Reliable and Effective Online System 4 4
5 MALAYSIA S EXPERIENCE IN THE IMPLEMENTATION OF STM 1. We learned from the experience of others, especially our neighbors, to get a better handle on the various aspects of export control 2. Implementation can be quicker and more effective if the implementing agency understands trade and the trading environment 3. An Inter-agency (a whole Government) approach is vital and indispensable in implementation and enforcement 4. Know your Stakeholders and work with them 5. Take advantage of assistance available from donor countries and international organizations 6. Outreach is a vital tool for industry awareness and compliance and should start even before the law is drafted 7. Use information technology to the fullest. Online registration, application and approval for permits is trade facilitating 5
6 MALAYSIA S EXPERIENCE IN THE IMPLEMENTATION OF STM 1. We learned from the experience of others, especially our neighbors, to get a better handle on the various aspects of export control 2. Implementation can be quicker and more effective if the implementing agency understands trade and the trading environment: This is trade policy issue, not a security issue In Malaysia, the Ministry of International Trade and Industry is the custodian Ministry and the focal point for the implementation of STA. (extracted from 1540, Compass, Vol. 1, Issue 2 (2012), Facilitating Trade in A Secure Trading Environment Mohamed Shahabar Abdul Kareem) 6
7 Minister of International Trade and Industry Strategic Trade Secretariat Partner Licensing Agencies Enforcement Poisons Pharmaceutical Services Division Royal Malaysian Customs Royal Malaysian Police Malaysian Communications and Multimedia Commission Telecommunications & Electronics Nuclear related Items / Materials Malaysian Maritime Enforcement Agency Malaysian Communications and Multimedia Commission Other officers specified by the Controller
8 PARTNER LICENSING AGENCIES Licensing on behalf of Secretariat for items related to STA 2010, under their expertise Abide by guidelines, SOPs, KPIs issued by Secretariat Has full authority over items covered within their respective Act, which are not listed under STA
9 PARTNER ENFORCEMENT AGENCIES All cases referred to Secretariat No unilateral actions Final decision on the strategic nature of item is made by the Secretariat, after consultation with technical agencies Criminal cases investigated by police after a police report is made 9
10 MALAYSIA S EXPERIENCE IN THE IMPLEMENTATION OF STM 3. An Inter-agency (a whole Government) approach is vital and indispensable in implementation and enforcement: STRATEGIC TRADE ACTION COMMITTEE (STAC) 1.Ministry of International Trade and Industry 2.Ministry of Foreign Affairs (MOFA) 3.National Authority, Chemical Weapons Convention, MOFA 4.Disease Control Division, Ministry of Health 5.Pharmaceutical Services Division, Ministry of Health 6.Pesticide Control Division, Ministry of Agriculture 7.Veterinary Services Division, Ministry of Agriculture 8.Attorney General Chambers 9.Atomic Energy Licensing Board 10.Royal Malaysian Customs 11.Royal Malaysian Police 12.Science and Technology Research Institute for Defence 13.Malaysia Maritime Enforcement Agency 14.Malaysia Communication and Multimedia Commission 15.National Security Council 16.Financial Intelligence Unit, Central Bank of Malaysia 10
11 MALAYSIA S EXPERIENCE IN THE IMPLEMENTATION OF STM 4. Know your Stakeholders and work with them Private Sector Foreign Governments Government Agencies STA
12 Know your Stakeholders Engage industry from the beginning Industry Manufacturers Traders Brokers Industry Associations Consultants Freight Forwarders Shipping Agents 12
13 MALAYSIA S EXPERIENCE IN THE IMPLEMENTATION OF STM 5. Take advantage of assistance available from donor countries and international organizations Drafting of Laws and Regulations Industry Outreach Study Tours and Site Visits Capacity Building Technical Support Who are they? The US, EU, Australia, Japan, South Korea, New Zealand, UNSCR 1540 Committee, ASEAN? Singapore, Malaysia? 13
14 MALAYSIA S EXPERIENCE IN THE IMPLEMENTATION OF STM 6. Outreach is a vital tool for industry awareness and compliance and should start even before the law is drafted: Training Meet the Client Day Session Engagement with Association Consultation Outreach Through Inter-Agency Meeting MITI Websites International Seminars 14
15 Outreach Needs of industry understood Address issues and problems of exporters and brokers in the implementation of the Act Get support to implement the Act Network with the industry Narrow down the group of proliferators Improve knowledge and share experience Teamwork and shared decision making 15 15
16 MALAYSIA S EXPERIENCE IN THE IMPLEMENTATION OF STM 7. Use information technology to the fullest. Online registration, application and approval for permits is trade facilitating EASY SELF-DECLARATION 1 July 2011: compulsory product declaration field in the Customs declaration forms - strategic items or nonstrategic items If declared as strategic items, the system will prompt for the STA permit number 16 16
17 TRADE FACILITATION epermit STA ONLINE REGISTRATION/PERMIT APPLICATION SYSTEM Web-based pre-registration Web-based system for the application and approval of permits Approved permits will be transmitted to Customs Information System for cross-reference purposes against Customs declaration Designed to meet the specific requirements of STA for the purposes of products monitoring and standard Creates a virtual community for key players in the trade supply chain - paper-less environment 17 17
18 ONLINE REGISTRATION/PERMIT APPLICATION (ONE SINGLE ONLINE SYSTEM) PRE-REGISTRATION APPROVE REJECT PERMIT APPLICATION (SINGLE / MULTIPLE-USE / BULK / SPECIAL*) APPROVE REJECT CUSTOMS APPLICANT 18 18
19 DEVELOPMENTS IN ASEAN Singapore established Strategic Goods (Control) Act in 2003, Malaysia established Strategic Trade Act in 2010 Philippines, Thailand, Indonesia, Vietnam have initiated steps towards Strategic Trade Management (STM) ASEAN economies should preferably adopt a common lists such as the EU Control lists for trade facilitation ASEAN Single Window (ASW) and STM ASEAN ECONOMIC COMMUNITY (AEC 2015) 19 19
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