Malaysia has implemented several safeguards to protect its economic and national security interests amid ongoing tariff discussions with the United States, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.
Speaking at a press conference on Friday (Aug 1), Zafrul said the measures include stricter issuance of Non-Preferential Certificates of Origin to prevent transshipment and false declarations of origin.
He added that Malaysia has also tightened control over the export of US-origin artificial intelligence (AI) chips by invoking Section 12 of the Strategic Trade Act 2010 under its catch-all control provisions.
00:00Dari segi ekonomi dan keselamatan negara, ini pun salah satu section dalam perbincangan dalam agreement kita
00:07dan kita telah pun mengetatkan pengeluaran sigil tempasal bukan keutamaan, this is the NPCO
00:13where we now have taken back that power and it's now under MITI and we are the exclusive agency, not agency lah, exclusive body that approved this
00:27Capital juga telah mengukurkan kawalan ke atas eksport chip on AI dari mikrosyarikat, that one under our strategic trade act under section 12
00:35So could you just give some clarity on the transshipment with President Trump that mentioned his executive order?
00:45So for transformation issue, that's why we decided on the NPCO, the certificate of origin
00:50So the concern is whether there will be products that are manufactured in Malaysia but actually not really manufactured in Malaysia
00:59It's just packaged in Malaysia and then to avoid the high tariff from other countries, let's say country A has a higher tariff
01:07They move their products, it could be China, it could be any other country
01:10Then they claim it's been produced here but actually it's been used just for transshipment
01:14Maybe they just do the packaging here, so that is why we took away the right of issuing the NPCO
01:21Now only MITI can issue the NPCO but when we issue the NPCO, we go and audit, verify whether this product is
01:30So there are cases, they must show that a lot of substantial processes of the activity in the manufacturing
01:42Outfit that they have here is done locally
01:45So this is where we go
01:47Before we, dulu they're based on trust
01:51You minta, the chamber goes to the chamber, chamber doesn't go physically there
01:55We go down physically
01:57Later, we're still finding out the report, I've not got the full report
02:02But there are examples of companies doing this
02:06Like it or not
02:08But many companies that do this, I'm afraid I'm going to minta
02:11Because once they minta, we have to go down
02:14There's 100% checked, it's not a random
02:16There's no sampling
02:17Every
02:18It does cause some delays
02:21But we have to do it
02:22No, it's just not allowed
02:34No, the product
02:39Yeah, so it's
02:40Okay, so the definition of transshipment, you know, basically, we are a trading country, so is Singapore
02:48There's a lot of transshipment activities because, you know, if you look at the trade value of Singapore
02:52It doesn't make sense that the country of, what, 5 million can consume that much, right?
02:58So it is a transshipment hub
02:59So it's a trading hub
03:02But transshipment hub, you must announce or you must declare correctly where is the product from
03:07Sometimes you have product A, it comes to Malaysia but it's meant for Thailand
03:11So but the cargo changes here, right?
03:14So but that's okay
03:15Because the product is from US, you declare it from US
03:17What, when you said the transshipment issue is the false declaration
03:22So they come to Malaysia and then they suddenly from China or from Vietnam or from wherever
03:28Then they repackage it here, then you chop it from Malaysia
03:32That, yeah, that is the transshipment issue
03:33There's no problem with transshipment if you declare correctly
03:36To avoid higher tarif
03:38Yeah, because again, the transshipment yang, the reason why they're doing this is more now than before
03:44It's because to avoid the higher tarif
03:46Because let's say country A, tarif 30 atau 40
03:49They akan bawa product they kat Malaysia
03:51And they pasang kat sini
03:53And then they chop
03:54In Malaysia, so they kena 19
03:56So that is what you cannot, especially if you avoid tarif
03:59Yeah, but if you don't, if you still declare China
04:04Then you, or Vietnam, or Vietnam say 20%, let's say 1%
04:08So then they, they, they boleh go through Malaysia, no problem
04:10But they kena lah the tarif rate of that country lah, not of Malaysia
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