Malaysia update controlled items list

According to e-federal gazette of Malaysia, new controlled items list is published on 28 Feb, 2014 as "STRATEGIC TRADE (STRATEGIC ITEMS) (AMENDMENT) ORDER 2014".

http://www.federalgazette.agc.gov.my/eng_main/main_carian_tajuk.php?key=strategic&tarikh_pewartaan1=&tarikh_pewartaan2=&Cari=Search

It comes into operation on 1 April 2014.  (However, according to FAQ of STA 2010, Malaysia MITI stated in the past, they will have 3 months grace period for implementation of updated list.)

Malaysia implemented its export control scheme since 2011, and this is their first control list update ever.  The new list looks in tandem with current EU list.

Singapore enhance STS effective from 1 April 2014

According to Circular No: 04/2014 dated Feb 26, 2014 issued by Singapore Customs, they enhance Strategic Trade Scheme ("STS") effective 1 April 2014, but with 6 months grace period.
In short, export license system will be changed, especially Tier 2 and Tier 3 bulk licenses.
It looks bulk permit system is simplified and easier to understand and handle for traders.if
See details in:  http://www.customs.gov.sg/NR/rdonlyres/6B9EA876-92CF-41D7-8758-25916F32D8C2/0/STSCircularFinal.pdf

China Imposes Embargo Against North Korea

My colleague in Bryan Cave International Consulting Shanghai office posted the useful & interesting article regarding China's embargo list to North Korea.  Here is the one. 
http://www.bryancaveconsulting.com/uploads/files/BCIC_Asia%20Trade%20Bulletin%20Sep-%20Oct%20%202013.pdf


China and other UN member states had, in the past, refused to support a complete embargo against the Democratic People’s Republic of Korea (“DPRK”). The United Nations said that had made it hard for its regulatory agencies to determine whether the Chinese government was imposing substantive sanctions on the DPRK.  Since the DPRK conducted its third nuclear test in February 2013, China has adjusted its export policies toward North Korea, including a complete ban on the export of dangerous goods.

For the implementation of UN Security Council resolutions and according to the Foreign Trade Law, China published an export embargo list of dual use items to the DPRK in an announcement made on September 23, 2013, officially announcing to the public that it is imposing sanctions on the DPRK.

http://exportcontrol.mofcom.gov.cn/article/t/z/201309/20130900319092.shtml

 

The list is promulgated in accordance with UN Security Council Resolution No.1718, 2087, 2094; INFCIRC/254/Rev.11/Part 1, INFCIRC/254/Rev.8/Part 2 published by the International Atomic Energy Agency; S/2012/947、S/2006/853、S/2009/364 published by the UN Security Council; as well as appendix C of UN Security Council Resolution No.2094.

The 236-page list covers the ban on dual-use items and technologies in four major areas including nuclear, missiles, chemicals and biological. While nuclear dual-use items in the embargo list are almost similar to those listed in the Catalog for the Administration of Import and Export Permit for Dual-Use Items and Technologies which is part of China’s export control system, the new list covers more items and technologies related to missiles, chemicals and biological, with more detailed technical specification. 

As the DPRK list is not based on HS code and could potentially have broader coverage, exporters should verify to see if their products for export to North Korea are subject to control.
This is the first time China has issued an embargo list against a specific country.

Hong Kong export control list update effective on July 8, 2013

As notified in this blog on May 28,
http://japantradecompliance.blogspot.jp/2013/05/hong-kong-export-control-list-updated.html,
Hong Kong's export control list is updated to include updated control items list on international regimes, such as Wassenaar Arrangement dual-use list on December 2012.

The revised control list will become effective on 8 July 2013.
http://www.stc.tid.gov.hk/english/circular_pub/2013_stc08.html

Hong Kong Export Control List Updated

According to the Strategic Trade Controls Circular No. 6/2013 issued by TID in Hong Kong, their export control items list is updated, namely Amendment of Schedule 1 to the
Import & Export (Strategic Commodities) Regulations.

Quickly looked through the updated list, I find Hong Kong's new list reflect dual use items list of Wassenaar in December 2012. 
For example, deleting the 'use" of software in 4D001, and adding Note 3 (b) 'new mass market exemption of components' of Category 5 part 2. 

The effective date of the new list is not announced, and a separate circular will be issued in due course to inform traders of the effective date of the Order.

(Source: http://www.stc.tid.gov.hk/english/circular_pub/2013_stc06.html )

Singapore update its export control list on Feb 2013

Singapore Customs has announced the latest list of control under SGCO 2013 on 8 Jan, and the Order will take effect from 1 Feb 2013.

You can view the new subsidiary legislation online at the following URL:
(Be careful, below links to large size of  pdf file.)
http://www.customs.gov.sg/NR/rdonlyres/177959A4-7BC3-42C1-BA7B-455A29FACCDE/0/StrategicGoodsControlOrder2013.pdf

The update list is basically in link with Wassenaar list as of Dec 2010 and certain selected updates as of Dec 2011.  (But not including Wassenaar Dec 2012 version, I think.)

For global IT trader, good news is that Category 5 part 2 Note 4 (ancillary exemption) is finally included in Singapore export control legislation.

EU dual-use list will be updated soon

On 16 May 2012 the European Union published an amendment to the EU Dual-Use Regulation (Council Regulation 428/2009). The amendment which is made in Council Regulation (EU) No 388/2012 amends the EU Dual-Use List. The new list comes into force 30 days after publication (ie on 15 June 2012).

See http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:129:0012:0280:EN:PDF

This update will affect Asian country's dual-use list such as Singapore and Malaysia.  I will monitor closely.

The 19th Asia Export Control Seminar - personal note

The 19th Asia Export Control Seminar was held in Tokyo on Feb 7 - 9, 2012. 
http://www.simul-conf.com/outreach/2011/asian_ec/index.html

The presentations by many country representatives are impressive and informative.  Among of them, below is the personal note and new information for me.

Philippine - According to the presentation, the development of national legislation is ongoing, "Strategic Goods Management Act".  Involving the regulation of import, export, re-export, transit and transshipment of strategic goods, technologies, equipment and service.  It looks it is still developing stage, I would like to follow.

Japan MOFA - I have thought transit was not well controlled in Japanese export control regulation, only transshipment is in scope of Foreign Exchange and Foreign Trade Law ("FEFTL").  It is true, but I find today the transit of all cargoes "to and from North Korea" is controlled under another law, "Act on Special Measures concerning Cargo Inspections etc. pursuant to UNSC Resolution 1874 etc."   The Act was entry into force since July 2010 and covers only "DPRK related items", namely, all arms and related materials, WMD related items, and luxury goods.  The enforcement agencies are Japan Coast Guard (JCG) and Japan Customs.  Up to now, no actual enforcement case, and training exercise was conducted by JCG.

Pakistan - I have no knowledge about Pakistan export control, but according to their presentation, they have legal framework and control lists based on EU pattern and includes items from NSG, MTCR, and AG.   I understand their significant geographical location near Afghanistan and Iran, so activity to prevent proliferation in Pakistan is important.

(Summary report by MOFA: http://www.mofa.go.jp/mofaj/gaiko/fukaku_j/asia_yu_19.html )

Singapore adopt Advanced Export Declaration (AED) from 1 April 2013

Singapore Customs announced on Jan 12, 2011 that they will implement Advance Export Declaration (AED) for all exports from 1 Apr 2013.

Currently, Singapore Customs requires advance customs export declarations only for controlled items (such as Strategic controlled goods under Tier 1 individual license) or exports by land.  Export customs declaration of non-controlled items by sea and air are actually allowed to be made within three days of the goods leaving Singapore under existing administrative exemption (IE Notice No. 2/76).  This exemption rule will be rescinded with effect from 1 Apr 2013.

In order to allow the industry sufficient lead time to complete the necessary changes to their work processes, Singapore Customs has announced the implementation date of 1 Apr 2013 in advance. In addition, there will be an 18-month adjustment period starting from 1 Apr 2013 to 31 Sep 2014. During the adjustment period, traders will generally not be penalised by Singapore Customs for non-compliance with AED requirements. However, all other customs offences and penalties will still be applicable during the AED adjustment period.

According to the media release by Singapore Customs, "this regulation development aims to strengthen Singapore's supply chain security and align its export declaration practices with international norm."
Yes, from AEO mutual recognition perspective, and also from Security Trade Control (international regimes as as Wassenaar Arrangement) perspective, this practice is norm for other countries, Japan, US, China, Australia as well as EU. 

I'm accustomed to Japan's strict customs declaration procedure, so "the export declaration practice after leaving the goods" in Singapore has been something incredible, personally for me.  This regulatory development in Singapore makes sense and is thought as "back to normal".


(Reference:  Singapore Customs web site)
Circular:  http://www.customs.gov.sg/NR/rdonlyres/6CEA916D-F762-46EE-9090-2D25FB3E3BDE/28740/Circular012012AEDImplementation1.pdf
Media Release:  http://www.customs.gov.sg/NR/rdonlyres/6185D945-DC37-4EA6-B5B7-3EC35CC8C60E/28738/PressReleaseonAEDImplementation_FinalWeb.pdf

Singapore Customs Updates STS Handbook

On December 1, 2011, Singapore Customs updated STS Hand book on their web site.
This is to reflect the update of TradeNet to Version 4.1 on January 1, 2012.  So, no significant change of legal framework by itself.  There are some changes in export declaration procedures and processing time in Tier 2/3 permit.  The STS Hand book is available in Singapore Customs web site as below.

http://www.customs.gov.sg/stgc/topNav/res/Publications.htm

However, for traders, it is inconvenient that there is no indication what parts in the STS Hand book were updated.  So, my colleagues in Singapore kindly made comparison chart of what part of STS Hand book were update in Trade Alert as blow.

http://www.bryancaveconsulting.com/sitebranches/publications/docs/BCIC%20Export%20Control%20Alert%20(STS)-Jan%202012.pdf

(Note:  I find typing error in middle of page 2 of above Trade Alert. 
4.2 - "How to declare a Tier 2 permit in TradeNet 4.1?" should be 4.6.
In same manner in the left column, 4.2.1 should be as 4.6.1.)

Malaysia STA update

I find Malaysia MITI web site for Strategic Trade Act ("STA") 2010 is now beautifully streamlined.  Until last month, the information was like "just pasted without order".

I was so busy in December for project relating to FTA, so I missed writing the article of Malaysia export control update, which was announced early December.
The significant (and welcomed) change for trader is transshipment permit is no longer required for 5A2 and 5B2 (encryption items) as long as it meets the requirement of Regulation 25.

See the English version of this notification as below:

http://www.miti.gov.my/cms/documentstorage/com.tms.cms.document.Document_21ed49c8-c0a81573-4c6f4c6f-caa55209/Circular%20on%20the%20Amendments%20to%20the%20Strategic%20Trade%20Regulations%202010.pdf

Singapore slightly update export control list Jan 01, 2012

I come to know via Singapore Customs news letter on Dec 29, 2011, Singapore will update its export control list on 1st Jan 2012 in order to reflect latest amendment of international regimes such as NSG, AG, MTCR and WA.  The news source is as follows.

http://www.customs.gov.sg/stgc/leftNav/str/Updates.htm

I quickly looked through the list and find the update is only limited to Category 1C351, 2A001, Category 3, Category 4, Category 5 - part I, and small number of deletion in Category 6, 7, and 8.
It is basically deletion and relaxation of items with some major changes in recent a few years.
The summary can be found in http://www.customs.gov.sg/NR/rdonlyres/F855FE58-01E3-4D86-B4CD-761306C37630/28694/StrategicGoodsControlAmendmentOrder2011.pdf

Singapore's policy in amendment of export control list is basically to follow EU dual-use items list.
As EU list is slow to reflect the update of international regimes, the latest EU list is still Regulation 428/2009.
http://trade.ec.europa.eu/doclib/docs/2009/june/tradoc_143390.pdf

While US and Japan have already reflected the Wassenaar list of December 2010 (e.g. US EAR on May 2011 and Japan list on July 2011), there has been discrepancy of list (items addition/deletion, and difference of technical parameter etc) between Singapore list between other nation's list.  I hope Singapore's decision is welcomed for global traders.  As soon as EU revise its list, Singapore will also update entirely its export control list upon release of the revised EU’s control list.

The inconvenient point for global traders are the existing export control list, or "Strategic Goods (Control) Order 2010" is not amended on Singapore Customs web site, therefore traders need to refer to both new list - the "Strategic Goods (Control) (Amendment) Order 2011", and the existing list "Strategic Goods (Control) Order 2010" when referring to the export control list.  In other words, for certain period until whole list is revised, traders need to carefully refer two lists.

Hong Kong update Strategic Commodities List

In order to comply with the controlled item list update of international regimes, such as Wassenaar Arrangement ("WA"), AG, MTCR, and NSG, Hong Kong announced their control list update on Nov. 18, 2011.

The announcement is available here:  http://www.stc.tid.gov.hk/english/circular_pub/2011_stc07.html

I quickly looked through the Annex, which indicates the full details of amendment.  I come to know it included the WA's latest list update (in December 2010) in Category 3 and Category 5 part 2, which means in link with US EAR and Japan's export control list.

Malaysia export control update

As many of traders who are involved in Malaysia export operation are interested in, Malaysia implement the export control regulation based on Strategic Trade Act 2010 ("STA") from July 1, 2011.

Recently I find "Slides for STA 2010" in Malaysia MITI web site.  It is presentation material concisely summarizing the STA rule and implementation.  Most of information in this slide is not new, but good reference material for briefing how the regulation works.

But I find interesting topics as below which imply the full implementation is practically not on July 1, but will be on August 1.   Belows are page number 28 and 29 of the slides.  Yes, the rule is from July 1st, but still the customs declaration & online permit application is under trial basis until July 31.

SELF DECLARATION
- Effective 1 July 2011, there will be a compulsory field in the K2 and K8 forms (*) to declare whether the products being exported are strategic items or non-strategic items.
(*) These forms are customs declaration forms in exporting out of Malaysia.
- If your product is ticked as strategic item, the system will then prompt for the STA export permit license number to be entered.
- This system will be on a trial period of one month until end of 31 July 2011 and fully enforced on 1 August 2011.  (Highlighted by blog author)

ONLINE PERMIT APPLICATIONS
-  Effective 1 July 2011 and export permit applications under the STA will go online.
- Every permit application should be accompanied with end-user statements from all end-users that the product is being exported to.
- This system will be on a trial period of one month until end of 31 July 2011 and fully enforced on 1 August 2011.  (Highlighted by blog author)

(Sourece:  http://www.miti.gov.my/cms/content.jsp?id=com.tms.cms.section.Section_356e3af1-c0a81573-272f272f-b7977e99 )

India wary of NSG move to restrict ENR exports

One of my good export control friends in India sent interesting news topic.  Here it is.  Thanks!

(source : Times of India local news paper)
As the Nuclear Suppliers Group (NSG) meets for a plenary session in The Hague next week, India said it was opposed to any move to restrict enrichment and reprocessing technology (ENR) by the 45-nation body. This would have the effect of negating the nuclear exemption given to India in September 2008, government sources said.

"We have expressed deep reservations with the move to withhold transfer of ENR technology (to India) which would dilute the whole message of exemption given to us in September 2008," they said. This came even after foreign secretary Nirupama Rao reportedly had a positive meeting with the NSG troika recently, as well as the US' Ellen Tauscher, in charge of non-proliferation and arms control.

However, India is continuing to work on countries to build its case for membership to the NSG. "Our outreach programme is going on. We don't believe the next NSG meeting will decide on India's membership but would like timelines so that a positive decision is there for the four processes," a source said. India wants a "package deal" for membership to all four international non-proliferation bodies -- Wassenaar Arrangement, Australia Group, NSG and MTCR.

Extra-territorial provision of Japan's export control?

Japan's export control is defined in the Foreign Exchange and Foreign Trade Law ("FEFTL").  The goods trade is prescribed in Article 48, and the technology transmission is in Article 25.

If you closely read the FEFTL, you may find Article 5 define the scope of application of FEFTL, and it gives impression that Japan's FEFTL has extra-territorial provision.

(Scope of Application)
Article 5:   This Act shall also apply to acts committed in a foreign state by a representative, agent, employee or other worker of a juridical person having its principal office in Japan in regard to the property or business of the juridical person.   The same shall apply to acts committed in a foreign state by a person having his/her domicile in Japan, or an agent, employee or other worker of that person in regard to the property or business of the person.


People may have question, hey, Japan's export control is extra-territorial effect in its implementation?
The answer is mostly No under export control.

The Article 5 provides the exception of the "principle of territorial jurisdiction".  FEFTL may be applied to Japanese company's employee or subsidiary overseas regardless of its residency.  Because the entity who is under influence of Japanese company and represent its interest should be restricted under the FEFTL for its strict enforcement.
However, in its interpretation and practice in this FEFTL Article 5, it is considered this provision is not applied to export of goods, but only to the transactions with non-resident such as international payment prescribed in Article 16. 
Also, it is important to note there is no Order, Ordinance, or Notification regarding re-export of Japan origin goods.  Japan don't regulate re-export of items from one foreign country to another foreign country.

What coming to my mind about this FEFTL Article 5 is that Malaysia Strategic Trade Act ("STA") which have extra-territorial clause in the STA.    STA Clause 4 is clearly titled as "Extra-territorial application", but it is very short and general, and the re-export (like US EAR) is not in scope of STA.  No regulation about re-export is found in Malaysia's export control scheme.  I'm wondering Malaysia STA's Clause 4 is just expected similar effect and with intention like Japan's FEFTL Article 5?

Singapore new trade facilitation framework "Trade FIRST"

One of my good friends in Singapore shared very interesting information to me, which is Singapore's new trade facilitation framework, called "Trade FIRST".

http://www.customs.gov.sg/leftNav/trad/TradeFirst/TradeFIRST.htm

I don't fully read the details yet, but looks quite fascinating program, including and mixed the concept of AEO, export bulk license (STS), and tax privilege.

One impressive point is that Singapore Customs assign Account Manager to the companies who participate in this program. The Account Manager is Singapore Customs officer and acts as contacting point or adviser, and help to answer various kinds of inquires regardless of its jurisdictions.

Also, the companies' privilege is divided into 5 categories, from Basic (for all traders) to the highest status is Premium. (Basic, Standard, Intermediate, Enhanced, then Premium)
The higher the status, the more the benefits.
Currently, 29 companies in Singapore are in Premium status, they looks like combination of mostly subsidiaries of US or European firm, and local companies.

I'm impressed Singapore Customs' smart and pro-business approach. They fully understand the importance of regional hub role, being competitive in trade facilitation, and drawing business by setting up attractive scheme.

(P.S.: As for export control perspective, I find the STS Handbook was update as of January 25, 2011. The Trade FIRST element was added into this handbook. For example as below.

What are the basic qualifying criteria to be eligible for a permit under the STS?
2.5.1 You have to meet the following basic criteria in order to qualify for a permit under the STS:
(a) You are a registered trader with Singapore Customs; and
(b) In the case of applications for Tier 2 and Tier 3 Permits, you must:
(i) maintain a good trade compliance record with Singapore Customs;
(ii) implement an effective Internal (Export Control) Compliance Programme; and
(iii) Achieve at least the “Enhanced” band under TradeFIRST. (added)

Malaysia export control update

As scheduled since last year, Malaysia's Strategic Trade Act 2010 (STA) came into effect on 1st
January 2011.

However, please be noted it is only for export permit application of Category 0 (Nuclear items) which will be exported from April 1st, 2011 onward. Exporters have a period of 3 months preparation of export permit of this category and the application for the export permits must be submitted to the Atomic Energy Licensing Board (AELB) for category 0. Details on the application procedures are available on http://www.aelb.gov.my/ .
(I don't think Malaysia companies have many nuclear related items, though. In other word, it is good grace period in starting phase for improving the procedures in government authorities and industries by evaluating how implementation going on in real operational world.)

The export permit requirement for all other strategic items under the STA i.e., Military
Items and Dual Use Items (Category 1-9), will be enforced on 1st July 2011 and
companies are required to apply for the export permits from 1st April 2011.

Good news for exporters are the controlled items list is finally available on Malaysia MITI web site.
http://www.miti.gov.my/cms/content.jsp?id=com.tms.cms.section.Section_356e3af1-c0a81573-272f272f-b7977e99

It can be downloaded in MS-Word file. As it was announced previously, the list is in link with EU list. I find their control list is, yes, same as EU list Annex I to Regulation 428/2009. The noteworthy point is that the list have conversion column with HS code, and relevant government authority is indicated in the right side column. I think HS code conversion is useful only for "first time" traders who have no idea of equivalent ECCN of their items. Please be noted export control code and HS code have totally different criteria in classification, HS code should be only for reference purpose to narrow down the possible export code.

FAQ for Malaysia Stretegic Trade Act

As previously mentioned in this blog, Malaysia will implement Strategic Trade Act 2010 ("STA") on October 1st, 2010. Although it is much earlier than expected, good news for trader is that the STA provide 3 months grace period from the commencement date of STA. In this period, the STA provide a deeming temporary authorization for the applicant to continue with existing activities.

Malaysian MITI posted Key Features of the STA and FAQ on their web site. This is comprehensive and easy-to-understand guideline. Please see:
http://www.miti.gov.my/cms/content.jsp?id=com.tms.cms.section.Section_356e3af1-c0a81573-272f272f-b7977e99
(or http://www.miti.gov.my/cms/index.jsp Home --> Guidline --> Strategic Trade Act)


Controlled Items List is not officially gazetted yet here, but by looking through the FAQ document, the category code is apparently similar to Wassenaar type ECCN (e.g. Category 4 is computer, Category 5 is telecommunication and information security). In FAQ, they mention about "ECCN" numbering scheme, cite as examples such as 1A002, 4D003, or 9E102 which looks like same scheme as US and EU.

In addition, this FAQ provide export permit types, application turn-around time, and the validity period. Malaysia have multiple types of bulk permit in audition to single-use permit.

This MITI web site is apparently new, since the total visitors shows below 100 as of today.
Perhaps, more details such as Ministerial Order will be published in this web site?

Malaysia implement STA by October 2010

I happen to see Malaysia MITI announcement regarding "The Implementation of The Strategic Trade Act 2010" in a news letter format, dated July 27, 2010 and stamped on Aug 04, 2010.

According to this letter, The Strategic Trade Act 2010 is expected to be implemented latest by October 2010. It is earlier schedule than expected, while most of traders don't see the controlled list and detailed procedure etc.

I will keep gathering information on this.

(Reference: http://www.miti.gov.my/cms/content.jsp?id=com.tms.cms.article.Article_3176d4a2-c0a81573-170c170c-67aecd2b&curpage=tt )