Latest news with #Non-PreferentialCertificatesofOrigin
The Sun
3 days ago
- Business
- The Sun
Malaysia clarifies rare earth export terms with US under trade deal
KUALA LUMPUR: The agreement allowing unrestricted rare earth exports to the US does not grant exclusive rights to America, clarified Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz. He emphasised that Malaysia currently imposes no export restrictions on these materials to any nation. The terms, part of the Malaysia-US trade negotiations under Section 5 - Economic and National Security, also address controls on AI chip exports from the US to certain countries. Malaysia will enforce stricter measures under the Strategic Trade Act 2010 starting July 14, 2025. Tengku Zafrul noted that tariff negotiations expanded beyond US requests, resulting in Malaysia offering reduced or eliminated import duties for 98.4% of tariff lines. Sales tax exemptions for US agricultural imports like fruits and seafood were agreed upon, though excise duties remain. Local industry protections stay intact, with no blanket exemptions for US import licenses or full foreign equity liberalisation in strategic sectors. Bumiputera equity requirements are also upheld. On digital services tax (DST), Malaysia applies non-discriminatory policies. The government will no longer require US social media and cloud providers to contribute 6% of revenue to the Universal Service Provision Fund. A directive redirecting DNS traffic to local services was also repealed. To prevent trade loopholes, MITI will exclusively issue Non-Preferential Certificates of Origin for US-bound exports starting May 6, 2025. - Bernama
New Straits Times
6 days ago
- Business
- New Straits Times
US' request gets Malaysian nod for zero rate on nearly 7,000 tariff lines
KUALA LUMPUR: Malaysia agrees to reduce tariff rates to zero for 6,911 out of 11,260 tariff lines or products requested by the US, representing 61 per cent, as part of reciprocal negotiations with the country. Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the move is part of efforts to strengthen market access and promote a more open flow of bilateral trade between the two nations. "This is a systematic and orderly approach to determining Malaysia's final offer to the US. "We have submitted a comprehensive offer covering 98 per cent of all tariff lines, but only agreed to liberalise 61 per cent of them," he said in a media briefing today. Tengku Zafrul also shared several red lines that Malaysia successfully defended during the tariff negotiations with the United States, which led to the 19 per cent tariff rate being announced for Malaysia. He said these included the imposition of excise duties, the removal of import licenses for United States products, liberalisation of equity ownership in strategic sectors, and Bumiputera privileges. "They asked us to eliminate excise duties, which as you know, are imposed on three items: cars, tobacco, and alcohol. "The automotive industry is important to the US, but we also have our own automotive industry, employing 700,000 workers. "We have a national car project and a broad supply chain. In other industries, we do not impose excise duties. "They see this as unfair, but other exporting countries face similar situations. "We have our own policies to ensure we remain competitive. "For now, I think we are not ready to remove these barriers, including equity ownership in strategic sectors, and some of their requests to review laws concerning digital platforms," he added. On matters concerning economic and national security, Tengku Zafrul said several measures have been put in place. He said these include the tightening of the issuance of Non-Preferential Certificates of Origin to address transshipment and false declarations of origin. He also added that the ministry is the sole issuer of the certificate for exports to the United States effective May 6. Tengku Zafrul said Malaysia has also strengthened control on exports of artificial intelligence chips originating from the United States by invoking Section 12 of the Strategic Trade Act 2010 under catch-all control provisions. At the same time, he said the country has committed to not imposing any export restrictions on rare earth elements or other critical minerals. Overall, Tengku Zafrul said the government hopes that the announcement of the tariff rates will provide certainty to exporters and industry players. "The ministry also urges industry players to fully leverage Malaysia's 18 Free Trade Agreements (FTAs) to diversify and expand their export markets," he said.
The Star
06-05-2025
- Business
- The Star
Support for Miti as issuer of certs
Ministry's decision will reinforce Malaysia's export credibility, say groups PETALING JAYA: The appointment of the Investment, Trade and Industry Ministry (Miti) as the sole issuer of Non-Preferential Certificates of Origin (NPCO) has received broad support from business chambers and trade groups, who say the measure will help protect Malaysia's trade integrity, particularly with the United States. However, industry leaders caution that the possibility of poor execution, lack of preparedness and insufficient infrastructure could result in bottlenecks and delays, potentially disrupting shipments and hurting exporters nationwide. The Malaysian International Chamber of Commerce and Industry (MICCI) said the government's decision to centralise the issuance of the certificates will reinforce Malaysia's export credibility and protect legitimate trade flows, particularly to the United States. ALSO READ: Experts: Move will address issue of transhipment 'Exporters are advised to stay updated on the revised application procedures and to engage closely with the ministry to ensure full compliance with the new requirements,' MICCI president Christina Tee said. To support compliance and reduce the risk of transhipment-related offences, MICCI is urging exporters to maintain clear, comprehensive and transparent supply chain records. 'Businesses must declare origin of products accurately and avoid any practices that could be perceived as relabelling or misrepresentation,' she added. ALSO READ: Miti to be sole issuer of certificates of origin for US-bound shipments She also encouraged companies to take part in awareness and capacity-building programmes organised by Miti and the Royal Malaysian Customs Department, and to cooperate fully during verification and audit exercises. However, Tee acknowledged that recent tariff measures imposed by the United States could present challenges by increasing operational costs and reducing competitiveness in the US market. 'To remain resilient, MICCI encourages its members to diversify their markets, invest in value-added strategies and enhance their product offerings. 'At the same time, businesses must maintain full compliance with all trade regulations.' Tee said MICCI supports the government's continued engagement with US counterparts to address these concerns and to promote a fair, open and rules-based trading environment. Previously, NPCOs for US-bound exports were issued by business councils, chambers or associations appointed by Miti. These trade documents verify the origin of goods for international shipments, though they are not used to claim preferential tariff rates. Tee said the chamber is prepared to forgo earnings from issuing NPCOs in the interest of national priorities. 'MICCI is willing to let go of that revenue and support Miti in issuing NPCOs so that the nation can emerge stronger during this period,' she said. Tee added that while NPCOs are a source of income, US-bound exports make up only about 15% of MICCI's certification activities. She was responding to the announcement by Miti on Monday that the ministry would serve as the sole issuer of NPCOs for US shipments effective yesterday. The ministry cautioned that any attempt to circumvent tariffs – including making false or misleading declarations of value or origin – will be treated as a serious offence. Malaysia Consortium of Mid-Tier Companies (MCMTC) honorary president Callum Chen raised concerns over Miti's preparedness to handle the new system. He said the absence of a dedicated facility and trained personnel could result in delays, as exporters now have only one access point instead of several. 'Does Miti have enough space and officers? How long will verification take, and how will exporters outside the Klang Valley be accommodated?' he asked. Chen stressed the need for a comprehensive nationwide solution. 'It's not just about space – it's about managing crowds, traffic, parking and logistics,' he said. 'Execution is key, even with a good plan,' he said, highlighting concerns from exporters in Johor, Penang, Sabah and Sarawak. The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) also called for a smoother transition as Miti takes over full responsibility on the issuance of the certificates. Its treasurer-general Datuk Koong Lin Loong proposed that the chambers assist by reviewing and verifying applications before Miti's final approval to help reduce the ministry's workload and ensure efficiency. 'We support the centralisation, but caution against implementing it too abruptly. Many exporters have yet to secure their certificates and a sudden change could lead to disruptions,' he said. Similarly, SME Association of Malaysia president Chin Chee Seong said Miti's ability to manage the transition effectively will depend on robust digital integration and timely support. He urged continued collaboration with industry associations to ensure accessibility and a better understanding of businesses' backgrounds. 'With every export requiring a certificate, this change impacts every transaction. There must be a clear, efficient process to avoid delays. The success of this transition will become clearer in the weeks ahead,' he said.
Straits Times
05-05-2025
- Business
- Straits Times
Malaysia clamps down on transshipment practices to the US, to prevent goods rerouting by other countries.
The Malaysian government views any attempt to circumvent tariffs through wrong or false declaration as "a serious offence". PHOTO: AFP SINGAPORE - Malaysia is imposing stricter rules to ensure exports to the United States are properly documented, in a bid to curb the transshipment of products that do not originate in Malaysia. The move comes amid growing scrutiny from US authorities over countries, such as China, which seek to sidestep American tariffs by routing its exports via another country to disguise their true origin. This practice, known as transshipment, has become a focal point in ongoing trade enforcement efforts by US customs officials since the Trump administration unveiled its so-called Liberation Day Tariffs on April 2. Malaysia's Trade and Industry Ministry (MITI) announced on May 5 that with effect from May 6 , it will be the only body that will issue Non-Preferential Certificates of Origin (NPCO) for shipment to the US , while stopping the issuance of these certificates from MITI-appointed organisations like local business councils, chambers or associations. The NPCO is a document that helps to identify the origin of the goods for international shipments in order to satisfy customs or trade requirements of the countries the products are shipped to, the Federation of Malaysian Manufacturers said on its website. The government's new measure aims to eliminate loopholes that could enable the misuse of Malaysia as a conduit for goods seeking to bypass tariffs imposed by US trade regulations. Malaysia's trade ministry said in its statement that 'it is unequivocally committed to upholding the integrity of international trade practices.'. 'As such, the government views any attempt to circumvent tariff through wrong or false declaration, whether related to the value or origin of goods, as a serious offence,' it added. Malaysia faces a 24 per cent reciprocal tariff on its exports to the US, which is expected to come into force in July. In the May 5 statement, MITI said it will also take additional measures to curb any transshipment offences to the US via Malaysia's entry or exit points. This includes enhancing audits on NPCO applicants, and working together with the Customs Department to investigate and take action against offenders. According to industry sources whom ST spoke to, some Chinese manufacturers have used Malaysia as a transshipment hub, allegedly going as far as falsifying their Certificates of Origin, in an effort to bypass the US tariffs. An industry veteran, who requested anonymity due to the sensitivity of the issue, revealed that in some cases, the perpetrators pay as little as RM1 00 (S$30.60) to obtain fraudulent certificates of origin for containers bound for the US. Addressing the matter in Parliament on May 5, Investment, Trade and Industry Minister, Tengku Zafrul Aziz, said: 'For countries with no Free Trade Agreements with Malaysia, like the US, we have a NPCO which is issued by business chambers, but due to this (transshipment) issue, MITI will take over the issuance of these certificates.' He added that Malaysia has 'received many complaints from industry partners that say that many items coming from other countries are stamped as if they come from our country.' Mr Zafrul, who visited the US in late April to meet with trade officials, also suggested forming a parliamentary caucus involving both pro-government and opposition MPs to debate on next steps to be taken by the government in handling the issue. Malaysia's Prime Minister Anwar Ibrahim , who officiated a special parliamentary session on the US tariffs on May 5, said that 11 per cent of Malaysia's total trade is with the US, with the value of bilateral trade in 2024 amounting to RM325 billion. Supporting the MITI move , the Associated Chinese Chambers of Commerce and Industry of Malaysia said in a statement on May 5 that the country's tariff advantage has encouraged businesses to reroute shipments and misclassify products to evade higher export tariffs. 'This could distort trade data and lead to the dumping of foreign goods, threatening local MSMEs already facing tight margins,' it added, referring to micro, small and medium enterprises . Harith Mustaffa is a journalist covering Malaysia for The Straits Times, with a focus on Johor. Additional reporting by Lu Wei Hoong. Join ST's Telegram channel and get the latest breaking news delivered to you.
The Star
05-05-2025
- Business
- The Star
Tengku Zafrul: Malaysia opposes breach of international trading system to circumvent tariffs
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Aziz KUALA LUMPUR: Malaysia strongly opposes any breach of the international trading system, including the issuance of fake or misleading certificates of origin, in an effort to circumvent tariffs. Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Aziz said that his ministry (MITI) takes note of media reports that say exporters from China are trying to circumvent United States (US) tariff by "origin washing' products by re-routing through third-party countries such as Malaysia. "Starting tomorrow (May 6), we will no longer permit chambers of commerce to issue Non-Preferential Certificates of Origin (NPCO) as there are many complaints from the industry that a lot of goods from elsewhere come to our country (for circumventing tariff). "NPCO for shipments to the US that are often issued by chambers of commerce will not be allowed and applications for NPCO that involve the US will be centralised under MITI,' he added. Tengku Zafrul was speaking during the winding up session at the special parliamentary meeting at the Dewan Rakyat today where Prime Minister Datuk Seri Anwar Ibrahim gave an explanation on the government's preparation to cushion the impact of US reciprocal tariffs on imports from Malaysia. - Bernama
