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Strategic Trade Act 2010
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What is the Strategic Trade Act?
Strategic Trade Act is an Act to provide for control over the export, transshipment, transit and brokering of strategic items, including arms and related material, and other activities that will or may facilitate the design, development and production of weapons of mass destruction and their delivery systems and to provide for other matters connected therewith, consistent with Malaysia’s national security and international obligations.
Why we should have the Act?
In 2004, the United Nations Security Council passed a Resolution which requested member countries to establish an export control system for the purpose of non-proliferation of weapons of mass destruction. As a member country, we are requested to control exports of strategic products which may be used for terrorism activities.
Who is the target for the implementation of the Act?
Any person who is engaged in the activity of export, transhipment or bringing into transit any strategic items and this include traders, exporters, cargo agents, carriers, freight forwarders, feeders operators, logistic or service providers.
How to comply with the Act?
Whenever a person / an entity performs any activities related with export, transshipment, transit and brokering of strategic items, they must obtain an export permit / broker certificate from the relevant authority for strategic items based on the Strategic Trade (Strategic Items) Order 2010.
Why should I be concerned with export control compliance?
A person or entity that violates the Act can be subject to a fine, imprisonment and / or death sentence as provided in the STA 2010.
What are the strategic items?
Strategic items refer to goods and technology that are controlled under the STA. A definitive and comprehensive List of controlled strategic items will be prescribed in the Ministerial Order and published in the Government Gazette. The List will be reflective of the items currently required to be controlled under the global export control regimes as well as the United Nations Security Council Resolution 1540. The items are categorized as follows:
nuclear materials, facilities and equipment;
special materials and related equipment;
telecommunications and information security;
sensors and lasers;
navigation and avionics;
aerospace and propulsion; and
How to know that the items to be exported out of Malaysia is in the control list or otherwise?
The Strategic Items List is technical and transparent. Exporters may check from the list of items and quickly identify either the product is controlled or otherwise.
What is defined by transit and transshipment?
Transit means to bring items from any country into Malaysia by land, sea or air, where the items are to be taken out from Malaysia on the same conveyance on which they are brought into Malaysia or any other conveyance and whether or not such items are landed or transshipped in Malaysia, but does not include the passage through Malaysia in accordance with international law of a foreign conveyance carrying any items.
What is the definition of brokering?
Brokering refers to the activity of negotiating, arranging of facilitating the purchasing, financing, conveying, sale or supply of items; or buying, selling or supplying such items by a person, on his own behalf or acting as an agent on behalf of another person. The STA also provides that a broker is required to hold a valid permit for brokering of strategic items if he: is notified by the relevant Authority or an authorised officer; knows; or has reasonable grounds, that such strategic items are intended or likely to be used, wholly or in part, for or in connection with a restricted activity.
What are the types of permits available to be applied?
Types of export permits and broker registration are as follows:
special permit; and
broker registration certificate.
Which permit type is suitable for my company?
When selecting the permit type, you need to consider your business needs and activities and the permit which you may qualify for. The following is the description of each permit:
Single-use permit – is a one-off export permit and issued on a shipment basis.
Bulk permit – is a multiple shipments export permit destined for one single country / destination.
Multiple-use permit – is a multiple shipments export permit destined for multiple countries / destinations.
Special permit – is a one-off export permit to export to a restricted end-user and issued on a shipment basis.
Broker registration certificate – is a certificate issued to broker strategic items / activities.
When should I apply for the export permit / broker registration?
An application for export permit / broker registration shall be made not less than the following timeframe before the strategic items are exported:
single-use permit - 5 days
bulk permit - 2 months
multiple-use permit - 2 months
broker registration - 14 days
What is the validity period for those export permit / broker registration?
Validity period are as follows:
single-use permit - 6 months
bulk permit - 2 years
multiple-use permit - 2 years
special permit - 1 year
broker registration certificate - 1 year
Can I renew my export permit / broker certificate?
Yes. Your export permit / broker certificate can be renewed before the expiry date as follows:
bulk permit - 2 months before
multiple-use permit - 2 months before
broker registration certificate - 14 days before
What is ECCN and its difference from the Customs HS Code?
ECCN stands for Export Control Classification Number. An ECCN is an alpha-numeric classification used in the Strategic Items List to identify items for export control purposes and determine the relevant authority involved in issuing the export permit. It is different from the Harmonized Tariff System Nomenclature, which is used by Customs to determine import duties and collect trade data and statistics. All ECCN have 5 characters, for example, 1A002, 4D003, or 9E102. There are 11 categories on the Strategic Items List. The first number of the ECCN identifies the category to which it belongs, for example, 1 = Special materials and related equipment, 4 = Computers, or 9 = Aerospace and Propulsion.
Can you explain what you mean by 'technology'?
Technology means information and data in any form for the design, development, production or use of another item and includes technical data, technical assistance and software.
Is all technology controlled?
Except in certain cases, technology is only controlled if it is required for the development, production or use of listed goods or software, or if the technology itself is specifically described in the Strategic Items List.
Are all researchers required to apply for export permit when sending information related to technology to a person outside Malaysia?
A researcher should examine the research information and determine whether it falls under the Strategic Items List. If it is determined that the research information falls under export control restrictions, the sending of that information / technology must get the approval from the relevant authority.
If the purchaser / end-user changes after I have been granted an export permit, do I need to submit a new application?
Yes. The export permit given is transaction specific and any change will require a new export permit.
Do I have to maintain records of exports of strategic items?
Yes. You must keep and maintain all documents related to export permit / broker registration. Failing to do so is committing an offence which can lead to punishment of a fine and / or imprisonment.
How to get the Act?
A copy of the Strategic Trade Act 2010 is available (upon subscription) at the http://www.lawnet.com.my/ lawnetPublic/ or you may purchase a printed copy from Percetakan Nasional Berhad. However, the Strategic Trade Bill 2010, which was passed by the Parliament without amendment, can be viewed from the Parliament website. Please visit http://www. parlimen.gov.my/billindex/pdf/ DR042010.pdf for your reference.
Who do I contact for further clarification?
You may contact the Strategic Trade Secretariat as follows:
Strategic Trade Secretariat Ministry of International Trade and Industry 12th Floor,
Block 8 Government Offices Complex Jalan Duta
50622 Kuala Lumpur