WT/T PR/M/2 92/Add.1  
30 April 2014  
(14-2633) Page: 1/194 
Trade Policy Review Body  
3 and 5 March 2014  Original: English/Spanish  
anglais/espagnol  
inglés/español  
 
  TRADE POLICY REVIEW  
MALAYSIA  
MINUTES  OF THE MEETING  
Addendum  
Chairperson: H.E. Mr. Joakim Reiter (Sweden)  
This document contains the advance written questions  and additional questions by WTO 
Members , and replies provided by  Malaysia .1 
 
 
Organe d'examen des  politiques commerciales  
3 et 5 mars 2014  
EXAMEN DES POLITIQUE S COMMERCIALES  
MALAISIE  
COMPTE RENDU DE LA R ÉUNION  
Addendum  
Président : S.E.  M. Joakim Reiter (Suède)  
Le présent document contient les questions écrites communiquées à l'avance par les 
Membres de  l'OMC, leurs questions additionnelles, et les réponses  fournies par  la Malaisie .1 
 
 
Órgano de Examen de las Políticas Comerciales  
3 y 5 de marzo de 2014  
EXAMEN DE LAS POLÍTI CAS COMERCIALES  
MALASIA  
ACTA DE LA REUNIÓN  
Addendum  
Presidente: Excmo.  Sr. Joakim Reiter (Suecia)  
En el presente documento figuran las preguntas presentadas anticipadamente por escrito  y 
las preguntas adicionales de los Miembros de la OMC,  así como las respues tas facilitadas por  
Malasia .1 
                                               
1 In English and Spanish only./En anglais et espagnol seulement./En inglés y español solamente.  WT/TPR/M/2 92/Add.1  
 
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  CONTENTS  
QUES TIONS FROM ARGENTINA  ................................ ................................ ........................  3 
QUESTIONS FROM ASEAN  ................................ ................................ ................................  4 
QUESTIONS FROM AUSTR ALIA  ................................ ................................ .........................  6 
QUESTIONS FROM BRAZI L ................................ ................................ .............................  19 
QUESTIONS FROM CANAD A ................................ ................................ ............................  22 
QUESTIONS FROM CHILE  ................................ ................................ ...............................  27 
QUESTIONS FROM CHINA  ................................ ................................ ..............................  30 
QUESTIONS FROM COLOM BIA ................................ ................................ ........................  49 
QUESTIONS FROM COSTA  RICA  ................................ ................................ ......................  57 
QUESTIONS FROM  HONG KONG, CHINA  ................................ ................................ .........  62 
QUESTIONS FROM ECUAD OR ................................ ................................ ..........................  64 
QUESTIONS FROM EGYPT  ................................ ................................ ...............................  71 
QUESTIONS FROM THE E UROPEAN UNION  ................................ ................................ ..... 72 
QUESTIONS FROM INDON ESIA  ................................ ................................ ....................  108  
QUESTIONS FROM JAPAN  ................................ ................................ .............................  118  
QUESTIONS FROM THE R EPUBLIC OF KOREA  ................................ ...............................  125  
QUESTIONS FROM MEXIC O ................................ ................................ ..........................  129  
QUESTIONS FROM NEW Z EALAND  ................................ ................................ ................  134  
QUESTIONS FROM NORWA Y ................................ ................................ .........................  138  
QUESTIONS FROM PAKIS TAN ................................ ................................ .......................  139  
QUESTIONS FROM PERU  ................................ ................................ ..............................  143  
QUESTIONS FROM THE P HILIPPINES  ................................ ................................ ...........  145  
QUESTI ONS FROM SINGAPORE  ................................ ................................ ....................  146  
QUESTIONS FROM SWITZ ERLAND  ................................ ................................ ................  154  
QUESTIONS FROM THE S EPARATE CUSTOMS TERR ITORY OF  TAIWAN, PENGHU, 
KINMEN AND MATSU  ................................ ................................ ................................ .... 159  
QUESTIONS FROM THAIL AND ................................ ................................ ......................  163  
QUESTIONS  FROM TURKEY  ................................ ................................ ..........................  168  
QUESTIONS FROM THE U NITED STATES  ................................ ................................ ....... 172  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM ARGEN TINA  
What are the most significant changes expected in the automotive industry from the new 
guidelines for the sector presented in January, considering that a reduction in tariffs in the 
segment of the most efficient vehicles will mean lower costs and expanding the supply of units for 
sale? 
Answer:  
The question posed does not fall un der the period for review. Nevertheless, the National 
Automotive Policy (NAP) 2014 has been introduced to promote a more competitive and 
sustainable automotive industry particularly in making Malaysia the regional automotive 
hub for Energy Efficient Vehicl es (EEV). Key directions and strategies outlined under 
NAP 2014 are expected to address and resolve structural issues affecting the industry as 
well as to enable the industry to meet global quality, cost and delivery requirements.  
The tariff reduction give n to manufacturers/assemblers of CKD hybrid and electric 
vehicles will boost sales of these fuel -efficient and environment -friendly vehicles in the 
Malaysian market.  
One of the topics of greatest interest to Argentina in the bilateral economic relationshi p is the 
Malaysian protocol by which the income  of Argentina beef to Malaysia for failing to prevent 
exclusive establishments using to slaughter the process that results in the range "halal". In this 
regard : What are the chances that a refrigerator where part of his job is carried out under 
processing "halal" without being an establishment exclusively enabled to that effect has been 
authorized to export meat to Malaysia?  
Answer:  
Malaysia imposes halal dedicated establishments as part of the halal regulati ons for 
every establishment that has interest to enter the Malaysian market. These regulations 
apply to all halal meat exporting countries without exception.  
The regulations are clearly spelt out in the Para 4.2 of the Malaysia Protocol for Halal 
Meat and Poultry Productions:  
4.2.1 Approved establishments shall be dedicated to produce halal meat, poultry and 
their products throughout the entire supply chain from slaughtering to transportation 
according to Shariah Law at all times;  
In the past, Malaysia has approved Argentinian establishments to export halal meat into 
the country. Therefore, establishing dedicated halal establishments should not be an 
issue.  
Malaysia does not have any plan to allow the export of halal meat from any non -
dedicated halal establ ishments into the country. At this point in time, Malaysia is 
satisfied with the performance of the approved overseas dedicated halal establishments.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM ASEAN  
Page 4, Para 1.15 -1.16  
ASEAN notes that Malaysia has undergone and introduced some initiatives to achieve its 
Vision  2020 by launching the New Economic Model (NEM) which is made up of the Economic 
Transformation Programme, Government Transformation Programme, "1Malaysia, People First, 
Performance Now " concept and the 10th Malaysia Plan 2 011-2015.  
The reforms implemented intend to make Malaysia more competitive in the global market place 
and aims to make it a high income nation. As such, can Malaysia provide some more specific 
information on these reforms and the type of programmes it has introduced to achieve their goals 
towards the Vision 2020?  
Answer:  
Four core transformation programmes have been introduced: the Government 
Transformation Programme (GTP); the Economic Transformation Programme (ETP); the 
Rural Transformation Programme (RT P); and the Political Transformation Programme 
(PTP). These have been implemented in stages, keeping in mind the short and long term 
objectives.  
GTP focusses on the Government 's commitment to improve the delivery of public goods 
and services in areas ident ified as National Key Result Areas (NKRAs). Six NKRAs were 
identified and targeted for improvement over three phases; 2010 -2012, 2012 -2015 and 
2015 -2020. The six areas are 1) reducing crime; 2) fighting corruption; 3) improving 
student outcomes; 4) raising  living standards of low -income households; 5) improving 
rural basic infrastructure; and 6) improving urban public transport and addressing the 
cost of living problem.  
The ETP is formulated based on the New Economic Model, designed to drive Malaysia 
forwar d to be a high income economy that is both inclusive and sustainable. Seven 
strategic reform initiatives (SRIs) have been outlined under the ETP:  
1. Benchmarking to international standards and undertaking liberalization;  
2. Rationalizing the role of government in business;  
3. Strengthening human capital development;  
4. Enhancing public service delivery;  
5. Narrowing the inequality gap;  
6. Reforming public finance; and  
7. Unleashing economic growth through the 12 National Key Economic Areas (NKEAs).  
Please visit the following w ebsites for the details:  
 www.pemandu.gov.my ; and  
 www.epu.gov.my . 
Pg. 8, Paragraph 2.17 -2.18  
With the SME Masterplan 2012 -2020, Malaysia expects to improve, among others, the G DP, 
employment and exports according to the contribution of SMEs to Malaysia 's economy.  
There has been a growing trend to connect SMEs into the Global Value Chains. Could Malaysia 
share some of the programmes and initiatives under this Masterplan to bette r understand 
Malaysia 's plans on SME development?  
Answer:  
The SME Masterplan (2012 –2020) is a long -term plan to accelerate the growth of SMEs, 
including moving SMEs up the value chain to become global players. Six areas have been 
identified that will spur and boost the growth of SMEs. These are innovation and WT/TPR/M/2 92/Add.1  
 
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  technology; human capital development; access to financing; access to market; legal 
and regulatory environment; and infrastructure .  
Specific programmes under the six areas include:  
 The Technology Com mercialisation Platform (TCP). This promotes innovative ideas 
from proof of concept (POC) to the commercialisation stage. TCP is designed to 
remove market barriers to innovation by providing SMEs links to a range of services 
including infrastructure suppor t, financing, technical assistance, market information 
and capacity building;  
 The SME Investment Programme (SIP). This provides early stage financing, through 
the development of investment companies which will invest in SMEs with potential. 
This will expe dite the growth of the venture capital industry that will support 
innovative SMEs and start -ups; 
 The Going Export (GoEx) Programme. This provides customised assistance to new 
exporters and SMEs venturing into new markets. Export -ready firms can benefit fro m 
this comprehensive support which among others include access to market expertise 
and buyers, and compliance to standards, all of which will help expedite 
internationalisation of services and products;  
 The Catalyst Programme. This creates home grown champ ions, targeting SMEs and 
providing support in the areas of financing, market access and human capital 
development; and  
The Inclusive Innovation which is specifically designed to empower the bottom 40% of 
the income group. This leverages on innovative init iatives, including microenterprise in 
rural areas through handholding as well as technical and management support, leading 
to transformation of communities.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM AUSTR ALIA  
Page 23, Paragraph 1.26 and Page 28, Paragraph 2.10  
The Secretariat repo rt attributes a modest easing in FDI inflows in 2012 to "the diminishing appeal 
of Malaysia as a base for labour -intensive industries " 
 What factors are driving this?  
 To what extent does this reflect Malaysia 's objective of moving towards higher value -added  
and knowledge intensive activities in global value chains?  
Answer:  
The slight moderation in FDI inflows in 2012 was partly due to the slowdown in the 
global trade and uncertainties surrounding global growth prospects that affected the 
export -oriented sec tor as well as other sectors directly linked to external demand.  
Other factors that contributed to the modest easing of FDI inflows in 2012 include 
uncertainties surrounding the date of Malaysia 's 13th General Election, government 
policy orientation towar ds encouraging investment in high value added and knowledge 
intensive industries as well increasing competition from neighbouring countries in 
providing lower labour cost for industries.  
Malaysia is adopting a targeted and selective approach in attracting niche quality 
investments in high -technology projects, and not merely emphasizing  value of 
investments.  Malaysia through MIDA has developed a sophisticated strategy in 
positioning itself as a global outsourcing hub for the high -technology manufacturing 
value chain.  
In line with Malaysia 's policy direction to focus on attracting quality investment rather 
than quantity, the continued investment in new growth areas and high value -added 
industries has further diversified Malaysia 's exports as well as deepened M alaysia 's 
industries to move up the global value chain.  
3.2.5.1.2 Halal certification  
Page 50, Paragraphs 3.44 and 3.45  
Can Malaysia please provide details on how halal certification is granted and how the foreign halal 
certification body achieves recognit ion by the Department of Islamic Development Malaysia? A 
footnote or URL link would be helpful.  
Answer:  
Halal Certification : 
The Department of Islamic Development Malaysia (Jakim) is the competent authority to 
certify halal  food, goods or services. Jakim h as also established the Malaysia Halal  logo 
and implemented the Halal  Certification System.  
The general requirements for halal  certification can be accessed at: 
http://www.halal.gov.my/v3/index.php/en/about -halal -certification/general -
requirements .  
Issuance of halal certificates to industries is done upon compliance with standards and 
requirements. The Malaysia Halal Standards used are:  
i. MS1500: 2009 Hala l Food - Production, Preparation, Handling And Storage - 
General Guidelines (Second Revision)  WT/TPR/M/2 92/Add.1  
 
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  ii. MS2200 Part 1: 2008 for Cosmetic & Personal Care  
iii. MS2400 -1: 2010 Halalan -Toyyiban Assurance Pipeline – Part 1: Management 
System Requirements for Transportation of  Goods and/ or Cargo Chain Services  
iv. MS2400 -2: 2010 Halalan -Toyyiban Assurance Pipeline – Part 2: Management 
System Requirements for Warehousing and Related Activities;  
v. MS2400 -3: 2010 Halalan -Toyyiban Assurance Pipeline – Part 3: Management 
System Requireme nts for Retailing;  
vi. MS2424: 2012 Halal Pharmaceuticals - General Guidelines  
vii. MS2200: Part 2: 2012 Islamic Consumer Goods Made of Bones, Skin and Fur  
The standards are available at:   
https://www.msonline.gov.my/catalog.php?score=checked&istc_id=66 . 
Halal certification workflow is available at:   
http://www.halal.gov.my/v3/index.php/en/halal -certification -process -work -flow. 
Recognition of Foreign Halal Certification Body : 
The recognition process will take into account evaluation processes during the audit, 
which involves on -site audit. The evaluation, among others, will include the capacity,  
standards, certification system, syari 'ah and technical expertise of the organization. The 
on-site audit will also include observation and evaluation of the organization doing its 
audit on its certified plants.  
Procedures for appointment of Foreign Halal  Certification Bodies are available at:   
http://www.halal.gov.my/v3/images/stories/pdf/cb%20procedure28012014.pdf .  
Para 3 9 (3.2.5.2.1 Food standards) - Page 52, Para graph 3.53 (MOH)  
It is stated that "So far, no MOUs on food safety and quality have been signed with trading 
partners ": 
What is the intended role of MOUs in Malaysia 's food safety policy?  
Answer:  
The establishment of Memorandum of Understandings (MOUs) on food safety and 
quality between Malaysia and trading partners are intended mainly to strengthen the 
cooperation between the parties. It includes provisions for sharing of information and 
exchange of expertise in identified food safety areas.  
Page 53, Parag raph 3.57  
It is noted that Brazil and Japan raised concerns with Malaysia regarding restrictions on plant and 
plant products, and Canada, the EU and the US raised concerns over pork and pork products. Did 
Malaysia provide a response to these concerns?  
Answer: 
Yes, responses to these concerns have been provided.   
Pork imports are subject to TRQs and the normal SPS requirements. Further information 
can be obtained at  http://www.dvs.gov.my/en/impot -/-eksp ot. WT/TPR/M/2 92/Add.1  
 
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  Pork cuts are imported into Malaysia from Australia, China, Canada, EU countries 
(Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Spain and Sweden), 
Thailand and Vietnam.  
The data on the import volume of pork cuts  into Malaysia:  
2011: 17,186.30 MT  
2012: 12, 280.42 MT  
2013 (January -September) : 7,782.73  MT 
Pages 101 -102, Para 4.60  
 Is excise duty applied at the same rate on domestically -manufactured vehicles and imported 
vehicles?  
 Do any domestic manufacturers or dealers receive any type of  payment determined 
according to the amount of excise duty paid on the sale of domestically manufactured 
vehicles?  
 Are fully reconditioned automotive parts that meet or exceed the standards of equivalent 
new parts prohibited? If so, why?  
Answer:  
The excise  duty rate is based on engine capacity and applicable for both domestically 
produced and imported vehicles.  
The excise duty rebate is given to all motor vehicle and motorcycle 
manufacturers/assemblers incorporated in Malaysia to assist them in adjusting an d 
maintaining their competitiveness in light of the liberalization exercises undertaken by 
Malaysia.  
However, under NAP 2014, in line with the promotion of green technology, Malaysia is 
looking into rationalizing the automotive tax system in order to prod uce a more 
environment -friendly value chain, while ensuring sustainability of the competitive 
automotive industry.  
Under NAP 2009, importation of used parts is being gradually phased -out due to safety 
and environment concerns. As a start, imports of four used parts items have been 
prohibited namely brake pads, brake lining, batteries and tyres.  There is no prohibition 
of imports on other reconditioned automotive parts.  
SUMMARY  
Trade Policy Developments  
Page 9, Paragraph 15  
"Other support measures remain i n place, such as export processing zones involving local content 
requirements " 
And 
3. TRADE POLICIES AND PRACTICES BY MEASURE  
3.3.6 Free zones and other measures  
Page 60, Paragraph 3.80  
"Effective 1 January 2011, FIZ companies benefit from import duty exe mptions if they achieve 
40% of local content value " WT/TPR/M/2 92/Add.1  
 
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  Can Malaysia demonstrate how local content requirements, as articulated above, are consistent 
with its international trade obligations?  
Answer:  
A Free Zone is an area in any part of Malaysia that is decl ared by the Minister of Finance 
under the provision of Section 3(1) of the Free Zones Act 1990, as a Free Commercial 
Zone or Free Industrial Zone. The activities and industries therein are subject to minimal 
customs formalities as it is deemed under Sectio n 2 (1A) of the customs Act 1967 to be 
a place outside the Principal Custom Area except in respect of Prohibition of Imports 
and Exports under Section 31 of the Customs Act 1967. Hence, products from companies 
located in the Free Industrial Zones (FIZ) des tined for Malaysian domestic market are 
considered as imported products and subjected to import duty at MFN/applied rates. 
However, effective 1 January 2011, products produced in the FIZ destined for the 
Malaysian market are eligible to enjoy ASEAN or ATIG A duty rates if they complied with 
the origin criteria, i.e. local content or substantial transformation.  
Page 9, Para 18  
"Preferential government procurement procedures and expanded countertrade/offset requirements 
continue to be used as an instrument of industrial policy to favour locally owned businesses " 
Pages 82 -83, Para 4.5  
"Preferential treatment for locally produced goods in government procurement contracts continues 
to support ethnic Malay (bumiputera) manufacturers " 
Can Malaysia demonstrate how pr eferential procurement arrangements, as articulated above, are 
consistent with its international trade obligations?  
Answer:  
Malaysia is not bound by any international process or body when it comes to 
government procurement thus any change by such processes /bodies does not directly 
affect Malaysia 's legislation.  
However, Malaysia 's government procurement practices are benchmarked against 
international organisations such as UNICITRAL and UNDP. In addition, our participation 
as WTO GPA observer would allow us to gain expertise from WTO GPA Parties pertaining 
to the legal provisions of the text and trade implications.  
Page 90, Para 4.28   
"Royalty rates for non -metallic minerals may be higher for exports; for example, in the State of 
Johor, royalties on rock mate rial for export are four times higher than those for domestically used 
material " 
Can Malaysia demonstrate how royalties on exported minerals being higher than on minerals 
destined for domestic consumption, as articulated above, are consistent with its inte rnational trade 
obligations?  
Answer:  
Under the Federal Constitution, land and its natural resources belong to states. As such, 
the states have absolute jurisdiction over imposition of royalty rates, land assessment 
rates and tribute paid to the State Gover nments.  
The Federal Government is responsible to regulate among others the mining operations, 
safety, trade, import and export of minerals and mineral products.  WT/TPR/M/2 92/Add.1  
 
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  3. TRADE POLICIES AND PRACTICES BY MEASURE  
3.1 Introduction  
Page 37, Paragraph 3.5  
"Export ta xes (1.5% of total tax revenue in 2012) and/or restrictions, which are applied to certain 
goods (e.g. timber), continue to, inter alia, discourage exports of certain commodities and 
essential goods and reduce their domestic prices " 
And 
3.3.2 Export prohibi tions, restrictions, and licensing  
Page 58, Paragraph 3.73  
"The Customs (Prohibition of Exports) Order 2012 (effective March 2013) sets out current export 
prohibitions, restrictions, and licensing requirements " 
And 
3.3.3 Export duties and taxes  
Page 58, P aragraph 3.75  
"such taxes tend to increase the domestic supply of the products concerned, and as a 
consequence, their domestic prices tend to be lower than would otherwise be the case " 
And 
4.1 Introduction  
Pages 82 -83, Paragraph 4.5  
"Exports of manufactu red products are assisted through as well as export licensing and export 
taxes on principal commodities ". 
4.6 Manufacturing  
Page 99, Paragraph 4.56  
"Export licensing and export taxes on principal commodities (agricultural, industrial) continue to 
divert s upply of these inputs to the domestic market, leading to downward pressure on domestic 
prices and thus acting as an implicit subsidy for the domestic processing industries (sections 3.3.2 
and 3.3.3) ." 
Can Malaysia demonstrate how export licensing and taxes  that suppress domestic prices and act 
as implicit subsidies, as articulated above, are consistent with its international trade obligations ? 
Answer:  
Export licences are issued as stipulated in the Customs  (Prohibition of Exports) 
Order  2012 based on the fo llowing:  
i. SPS requirements;  
ii. Exports ' monitoring; and  
iii. Human health and environmental precautionary measures.  
All export licenses imposed are in line with Malaysia's commitment under WTO and are 
consistent with its international trade obligations.  WT/TPR/M/2 92/Add.1  
 
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  3. TRADE P OLICIES AND PRACTICES BY MEASURE  
3.2.1.2 Customs valuation  
Page 40, Paragraph 3.18  
"A committee comprising officers from the Ministry of Finance, the Ministry of International Trade 
and Industry (MITI), and RMCD reviews all documents and prices submitted before recommending 
the "gazetted value" to the Minister for approval " 
And 
4. TRADE POLICIES BY SECTOR  
4.1 Introduction  
Pages 82 -83, Paragraph 4.5  
"Non-tariff measures such as the gazetted price system and the import licensing system of 
"approved permits"  remain in place " 
And 
4.6.1 Automotive industry  
Pages 101 -102, Paragraph 4.60  
"A gazetted price system remains in place to assist Customs to determine the dutiable value of 
new CBU automobiles (under NAP 2006) and used (under the NAP 2009, since 1 June 20 10) 
(section 3.2.1.2).123 This system seems to be used to raise the price of imported vehicles so that 
it is substantially higher than that of domestically produced autos " 
Can Malaysia demonstrate how discriminatory valuation rules on imported autos, as ar ticulated 
above, are consistent with its international trade obligations ? 
Answer:  
All the articles of the WTO Agreement on Customs Valuation were considered in the 
Customs (Rules of Valuation) Regulation 1999. The value fixed under Section 12 of the 
Custom s Act 1967 is based on the proposal by the Panel. The Panel will review all the 
relevant importation documents and data or information which is available in Malaysia. 
Customs value will be derived on the basis of a hierarchy order of valuation rules as 
follows:  
i. Transaction value or Transaction value plus adjustment under regulation 4 and 5;  
ii. The transaction value of identical goods under regulation 6;  
iii. The transaction value of similar goods under regulation 7;  
iv. The deductive value of the imported goods under r egulation 8;  
v. The computed value of the imported goods under regulation 9 (not applicable in the 
cases of imported CBU cars); and  
vi. Flexible valuation allowed  
The valuation rules are consistent with WTO as it provides transparency and consistency 
to the impor ters. WT/TPR/M/2 92/Add.1  
 
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  3.1 Introduction  
Page 37, Paragraph 3.5  
"Support is available for exports of certain fresh and dried fruits, fresh and dried flowers, 
ornamental plants and ornamental fish, and manufactures in the form of statutory income tax 
exemptions ranging from 10% to 50% of the value of increased exports, depending, inter alia, on 
the activity, value -added and/or ownership. Similar exemption of statutory income tax equivalent 
to 50% of the value of increased export is available to companies in selected services sectors " 
And 
3.3.5 Export subsidies  
Page 59, Paragraph 3.78  
"To further encourage the export of Malaysian goods, locally owned manufacturing companies with 
Malaysian equity of at least 60% are eligible for tax exemption on statutory income equivalent to 
30% of the value of increased exports, provided that the company achieves a significant increase 
in exports " 
And 
4. TRADE POLICIES BY SECTOR  
4.1 Introduction  
Pages 82 -83, Paragraph 4.5  
"Exports of manufactured products are assisted through, inter alia, tax e xemptions on statutory 
income from exports (enhanced for majority Malay -owned firms and automotive) " 
And 
4.6.1 Automotive industry  
Pages 101 -102, Paragraph 4.60  
"The tax exemption on statutory income for manufacturers in the automotive industry was 
enhance d in 2010 ". Can Malaysia demonstrate how tax exemptions for autos linked to local 
content, increased exports, and for Malay firms, as articulated above, are consistent with its 
international trade obligations ? 
Answer:  
Moving forward, under NAP 2014, the Go vernment will develop standards for all 
automotive parts and components regardless of it being new or used. Thus, used parts 
can be imported into Malaysia subject to compliance to relevant standards.  
As we are moving toward a high income nation, it is impe rative for Malaysia to increase 
participation in international trade. The initiative is to encourage Malaysian companies 
especially SMEs to be more active in international trade there by adding greater value to 
their products.  
Para 4.90  
"The DFIs were esta blished to develop and promote key sectors considered important to the 
development objectives of the country. These sectors include agriculture, small and medium -sized 
enterprises (SMEs), infrastructure, maritime, export -oriented sectors, capital -intensive  sectors, 
and high -technology industries. As explained by the authorities, DFIs complement the banking WT/TPR/M/2 92/Add.1  
 
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  system by providing financing to the underserved segment. Whilst DFIs lend at market rates for 
financing under their own funds, they also provide financi ng at favourable rates to targeted 
groups, particularly entrepreneurs " 
Can Malaysia demonstrate how targeting of export -oriented sectors by development finance 
institutions, as articulated above, are consistent with its international trade obligations ? 
Answer: 
The development finance institution that targets export -oriented sectors referred to in 
Paragraph 4.90 is the Export -Import Bank of Malaysia Berhad (EXIM Bank). EXIM Bank 
in Malaysia is similar to government -owned export credit agencies in other membe r 
countries. Services provided by EXIM Bank are consistent with Malaysia 's international 
trade obligations.  
In Malaysia, EXIM Bank is mandated by the Government to provide financing, export 
credit insurance and guarantee facilities to support both the expo rts and imports of 
goods, services and overseas project financing in all sectors. Financing is provided to 
both foreign -owned and domestically -owned businesses, domiciled in Malaysia, engaged 
in export -oriented sectors at market rates.  
Page 3, Paragraph 1. 10 
Malaysia 's report indicates that foreign direct investment grew by 30 per cent in 2012 compared to 
2008.  
 What does Malaysia consider have been key factors in contributing to the recent trend 
growth in foreign direct investment (30 per cent growth in 201 2 compared to 2008)?  
 What impact, in Malaysia 's view, has this has had on overall economic growth and 
development in Malaysia?  
Answer:  
Malaysia is adopting a targeted and selective approach in attracting niche quality 
investments in high -technology projec ts, and not merely emphasizing value of 
investments.  Malaysia through MIDA has developed a sophisticated strategy in 
positioning itself as a global outsourcing hub for the high -technology manufacturing 
value chain.  
Malaysia is ranked 11th among the Top 20 economies with the highest FDI rates of 
return (17%) in 2011 (UNCTAD, WIR 2013). This is testimony to the fact that through 
MIDA, the country 's efforts in promoting Malaysia as a profitable investment location to 
do business, has been successful . 
Malaysia 's strategic policy measures are in line with UNCTAD 's recommendations in the 
World Investment Report 2013. The various measures undertaken by the Government in 
promoting investments in the country which encompass value added activities have 
contributed to the recent growth in foreign direct investments.  Among the measures 
undertaken by the Government are:  
 An ecosystem approach to promote private investments  
 Adopting  a selective and targeted approach in attracting quality investments in  all 
stages of the pr oduction value chain  
 Encouraging outsourcing activities to enhance efficiency and gain a competitive  edge  WT/TPR/M/2 92/Add.1  
 
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   Facilitating  private sector -led training centres to train skilled and educated 
workforce to suit the industry  
 Strengthening  laws and regulations incl uding protecting IPs and 
investors. Facilitating  investors in doing business in Malaysia – Ease of doing 
business  
 Developing  infrastructure, transport and logistics in the country  
Malaysia 's FDI in 2008 recorded RM23.9 billion while in 2012 FDI increased to  
RM31.1  billion. The average annual growth rate of 1 per cent during the period can be 
attributed to the large presence of multinational corporations in manufacturing and the 
oil and gas sector. FDI in the services sector has also risen, particularly in fi nancial 
services, shared services and outsourcing, as well as communications.  
The increase in FDI is expected to bring positive impact in enhancing the country 's 
productivity, improving efficiency and driving the growth of high value -added exports in 
the f uture.  
1.2 New Economic Model  
Page 5, Paragraph 1.22  
Agriculture is one of the 12 national key economic areas (NKEAs) under the Economic 
Transformation Programme (ETP). Are there specific industries within Agriculture that Malaysia has 
identified for focu s for growth? If so, which industires are they and how will growth be promoted in 
each case?  
Answer:  
Under the NKEA, Malaysia is focusing on higher value added activities for agriculture, 
which include, seaweed, ornamental fish, herbs and spices, fruits a nd vegetables, 
mushrooms and floriculture as well as aquaculture production. Enhancing production 
and competitiveness are the main drivers of growth and this is achieved by intensifying 
research and development, as well as by encouraging the adoption of be tter 
technologies.  
Palm oil is one the industries that has been identified under the NKEA. Under the palm 
oil NKEA, focus is on both upstream and downstream activities. To accelerate 
productivity in this sector, replanting programmes will be intensified to  replace low -
yield oil palm trees with high -yield seedlings and research and development efforts will 
be intensified to increase oil extraction rate. In addition, Malaysia is also researching on 
various new applications of palm -based products in food and h ealth industries.  
Another industry that has been identified under the NKEA is the rubber industry. Under 
the rubber NKEA, replanting and new planting activities among smallholders is 
continued in order to enhance the productivity of the rubber industry an d to support the 
development of downstream activities. In addition, smallholders are supplied with only 
high-yielding and quality planting materials to boost rubber yield in Malaysia.  
2. TRADE POLICY DEVELOPMENTS  
2.2 Initiatives to Facilitate Trade  
Page 7 , Paragraph 2.12  
The AEO program provides accredited operators more streamline access through Customs. Does 
Malaysia plan to integrate the AEO into the ASEAN Single Window Aspiration? For example, does 
Malaysia plan to recognise operators accredited under similar AEO programs operating in other 
ASEAN countries?  WT/TPR/M/2 92/Add.1  
 
- 15 - 
 
  Answer:  
Currently Malaysia has no plans to integrate the AEO into the ASEAN Single Window 
Aspiration.  
Page 8, Paragraph 2.15  
Agriculture is one of the 12 national key economic areas (NKEAs) under th e Economic 
Transformation Programme. The Malaysian Investment Development Authority (MIDA) is the 
principal agency to oversee and drive investment into the manufacturing and services sectors.  
Has Malaysia established a similar authority to oversee and dri ve investment, whether 
domestically or from abroad, to develop the domestic agricultural industry?  
Answer:  
The agriculture industry in Malaysia falls under the jurisdiction of two ministries i.e. the 
Ministry of Agriculture and Agrobased Industry for the a grofood subsector and the 
Ministry of Plantation Industries and Commodities that caters for the industrial crops 
subsector.  
Unlike the manufacturing and services sectors which cross over various ministries and 
agencies, agriculture is always considered a special industry that requires special 
treatment and as such, this role has always been played by the specific ministries 
mentioned.  
In driving the investment for the domestic agriculture industry, Malaysia has adopted 
several mechanisms among which are t he establishment of councils and agencies as 
well as representative offices abroad working to drive investment in for the respective 
commodities.  
Page 16 Paragraph 3.14 ; Page 10 Paragraph 25 and Page 9 Paragraph 2.20  
To what extent did the domestic regula tion reform efforts outlined in this Paragraph contribute to 
the overall services sector competitiveness and GDP growth?  
To what extent does Malaysia attribute the solid growth in its services sector (average 5.9 per cent 
annually over 2009 -2012) to its p rogressive liberalisation of the services sector, noting it was 
above GDP growth in the same period (average 4.1 per cent annually from 2009 -2012 [p.12 of the 
Secretariat report])?  
Answer:  
Domestic regulation reforms help to improve productivity, competiti veness and GDP 
growth of the services sector. This together with services liberalisation will create a 
conducive and competitive business environment. An assessment on the impact of 
liberalisation to the services sector conducted in 2012 indicated that lib eralisation has 
had a positive impact on the sector 's performance, particularly in terms of value added 
and employment. In addition, liberalisation has also benefited the SMEs in terms of 
productivity and value added.  
To deliver the full benefits of libera lisation, improvements are being undertaken with 
respect to the processes and procedures of setting up businesses, especially in the 
liberalised services sub -sectors. In addition assistance is provided to SME service 
providers for development and capacity building.  
The services sector has registered growth averaging 5.9%  annually for the period 
2009 -2013. In addition, the services sector saw an average annual growth of 24.1% in 
net foreign direct investment into the sector over 2009 -2013. The increasing 
contribution of the services sector to GDP from 53.2% in 2009 to 55.2% in 2013 is also 
similar to the trend in developed countries.  WT/TPR/M/2 92/Add.1  
 
- 16 - 
 
  Page  17 Para 4.2 
What has been Malaysia 's experience with establishing its Competition Commission?  
Answer:  
Challenges faced aft er the establishment of the Competition Commission on 1 April 2011 
include:  
- lack of experienced and knowledgeable manpower to assist in implementing the law,  
- continuous need to conduct effective advocacy programmes for both the private and 
public sector, a nd  
- need to develop a strong organizational structure for the Commission and efficient 
enforcement and non -enforcement processes for the Commission.  
Page  17 Para 4.2 
How has its development and implementation been received by Malaysian consumers?  
Answer:  
In implementing the Competition Act 2010, the MyCC has received mixed reaction from 
consumers. Some have been positive while others continue to oppose its 
implementation.  In terms of its development, the number of cases received to date is a 
clear indicatio n that the implementation has taken off and consumers are aware of its 
implication and the benefits it can bring.  
Paragraph 3.12 – 3.14  
With respect to Malaysia 's decision for further unilateral liberalisation of 18 services sub -sectors. 
What have been th e key outcomes of this important policy decision?  
Answer:  
The second round of services sectors liberalisation initiative that was announced in 2012 
is in line with Malaysia 's Economic Transformation Programme (ETP) aspiration which 
will transform Malaysia  into a high -income nation by 2020. Apart from having a catalytic 
impact on growth of value added and employment, a more liberalised environment in 
these sectors are expected to promote a more knowledge based economy that will be 
more diversified and less reliant on performance of manufactured exports.  
An important outcome of the liberalisation exercise involved the dismantling of 
burdensome administrative processes and streamlining regulatory mechanisms in 
creating a more coherent and friendly business en abling framework.  
Can Malaysia quantify the contribution that these policies made to services sector and broader 
GDP growth?  
Answer:   
Over the years, the services sector has been rapidly growing in size and in its 
contribution to the Malaysian economy. Si nce 1978, the services have  been the largest 
sector in the Malaysian economy, with its share of GDP r ising from 36 % in 1980 to 
54.6% in 2012. For 2013, GDP contribution from the services sector has increased to 
55.2%.  
The contribution of services sector t o Gross Domestic Product (GDP) since 2010  is 
illustrated as below:  WT/TPR/M/2 92/Add.1  
 
- 17 - 
 
  Year  GDP (in RM million)  Services contribution to GDP (%)  
2010  359.8  53.2 
2011  385.1  54.1 
2012  410.0  54.6 
Source:  Department of Statistics Malaysia (DOSM).  
To what extent did the domes tic regulation reform efforts referred to in paragraph 3.14 contribute 
to overall services sector competitiveness and GDP growth?  
Answer:  
Following the liberalisation exercise, a comprehensive review of the institutional and 
regulatory mechanism has been undertaken to dismantle and remove burdensome 
processes and regulatory barriers that impede the liberalisation initiative.  
Overall in the World Competitiveness Yearbook (WCY) 2012 report, Malaysia moved up 
to 14th position out of 59 competitive countries.  Strengthening its overall 
competitiveness performance by 2 positions (2011:16th), this ranking places Malaysia 
among the world 's top 15 most competitive countries led by Hong Kong (1st); USA (2nd); 
Switzerland (3rd); Singapore, Sweden, Canada, Taiwan, Nor way, Germany, Qatar, 
Netherlands, Luxembourg, Denmark and Australia.  
Malaysia 's improved ranking in the WCY 2012 reflects the impact of measures the 
Government has undertaken to improve competitiveness of the Malaysian economy. 
These wide ranging measures include improvements in the delivery and efficiency of 
public services and increased transparency and accountability.  
In addition, Malaysia is 6th (2013: 12th) in the latest World Bank Doing Business Report 
2014, among 189 economies. At 6th position, Mala ysia has been placed in the same 
league as Singapore, Hong Kong, New Zealand, United States and Denmark. This ranking 
also places Malaysia ahead of economies like the Re public of Korea, Norway, 
United  Kingdom, Australia and Finland.  
Malaysia is one of the 20 economies that have shown the most improvements from 2010 
to 2013. Malaysia also features among the economies that improved the most, in terms 
of good practices. Malaysia is also credited among 45 other economies for establishing 
committees to improve b usiness environment.  
Overall, the services sector competitiveness can be measured by the increasing value of 
investment and GDP growth since 2010:  
Year  Total Investment  
(in RM billion)  FDI 
(in RM billion)  DDI 
(in RM billion)  
2010  36.7 3.9 32.6 
2011  70.4 17.9 52.5 
2012  117.5  12.1 105.4  
Source: Malaysian Investment Development Authority (MIDA) . 
In order to achieve a high income economy by 2020, a 6% annual GDP growth has been 
targeted. The services sector is forecasted to be one of the major contributors to this 
growth – targeted to increase from the 53.2% GDP contribution in 2010 to 61% by 2015 
(under RMK10), and to 65% by 2020 (under the IMP3).  
Year  GDP (in RM million)  Services contribution to GDP (%)  
2010  359.8  53.2 
2011  385.1  54.1 
2012  410.0  54.6 
Source: Department of Statistics Malaysia (DOSM).  WT/TPR/M/2 92/Add.1  
 
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  Can Malaysia provide an update on progress towards the gazetting of the Legal Profession 
(Amendment) Act 2012 or the proposed amendments to the Architects Act 1967 and Engineers Act 
1967?  
Answer:  
The amendm ent of the Architects Act 2012 and the Engineers Act 1967 are currently 
being vetted before tabling to Parliament.  
The Legal Profession (Amendment) Act 2012 was passed by Parliament. However, the 
Amendment Act has not entered into force as the Rules accomp anying the amendments 
are still being prepared. Once completed, both the Amendment Act and Rules will be 
gazetted.  
Not covered by either report: Malaysian Steel Council (MSC) or the Malaysian Iron and Steel 
Institute (MSI)  
There is no reference to the MSC and the MSI in the reports and there is little readily available 
information on the activities of these bodies. Could Malaysia please provide further detail on the 
role of the MSC and the MSI?  
Answer:  
The Malaysia Steel Council (MSC) is a Government -led in itiative established to oversee 
and steer the development of the iron and steel industry in Malaysia. The Malaysia Steel 
Institute (MSI) is a private sector driven entity with the objective of providing the 
necessary support and of facilitating a sustainab le environment for the development of 
the iron and steel industry. The institute also assists the Government in the formulation 
of policies for the iron and steel sector.  WT/TPR/M/2 92/Add.1  
 
- 19 - 
 
  QUESTIONS FROM BRAZIL  
According to the report by the Secretariat, the Malaysian auth orities have decided, under the 10th 
Malaysia Plan, to focus the agricultural policy on the availability, accessibility and affordability of 
food for the general population. In this context, is the Malaysian government planning to fade out 
some of its ad v alorem tariffs and tariff -rate quotas?  
Answer:  
The policy to focus on availability, accessibility and affordability of food for the general 
population has been a long standing policy for Malaysia Most of the important food items 
that Malaysia imports have zero duty applied rates to ensure affordability and 
accessibility. As the Secretariat Report observed, Malaysia's average MFN applied tariff 
for agricultural products is low at 2.9%. Non ad valorem  is mostly for alcoholic 
beverages and tobacco products whe re consumption is not encouraged. In addition 
despite the existence of TRQs, Malaysia in -quota rates are very low or duty free. These 
in-quota quantities reflect the domestic demand for the respective products.  
Malaysia also does not have any plans to remo ve the TRQs for the time being.  
Page 106 (Para 4.70)  
As legislated in the FSA and IFSA, policy on investment in the financial sector (encompassing the 
banking, insurance, and takaful sectors) is based on prudential and the best interest of Malaysia 
criteri a. Under the FSA and IFSA, the factors to be considered in determining whether an 
application is in the best interest of Malaysia are: (a) the effect of the investment on the level and 
nature of economic activity in Malaysia, including the effect on produc tivity, efficiency, and quality 
of financial services; (b) the contribution towards enhancing international trade and investment 
linkages between Malaysia and other countries; (c) the effect of the investment on the stability of 
the financial system, inclu ding on contact and behaviour that could pose a risk to the financial 
system; and (d) the degree and significance of participation of Malaysians in the financial sector.  
1. Is there an objective or quantitative criteria to measure the degree and significan ce of 
Malaysians participation in the financial sector?  
Answer : 
Given the importance of the financial sector to the Malaysian economy, investments in 
the financial sector will be assessed to ensure that they are able to add value to the 
financial sector a nd economy as a whole, while taking into consideration the degree and 
level of participation of Malaysians. Among the considerations given to this factor 
include, but are not limited to, the domestic market share in the financial sector, as well 
as the lev el of shareholding in the individual financial institution. This is important to 
support the orderly growth and development of the financial sector, and promote and 
secure the best interests of the country through economic cycles and progressive stages 
of development.  
Additionally, as articulated in the Financial Sector Blueprint 2011 -2020, Malaysia will 
also seek to ensure the continued presence of strong and well -managed domestic 
banking groups that mobilise more than a 50% share of resident deposits.  
2. How many authorizations were refused since the last Malaysian TPR, based on the best interest 
of Malaysia criteria?  
Answer : 
Since the coming into force of the FSA and IFSA in June 2013, no authorisations have 
been refused based on the best interest of Mal aysia considerations.  WT/TPR/M/2 92/Add.1  
 
- 20 - 
 
  Page 108 (Para 4.76)  
As reported in Malaysia's previous Review, banking services are provided by commercial banks, 
investment banks and Islamic banks. All banking licences are granted by the Minister of Finance, 
based upon recommendat ions made by BNM.  
As articulated in the Financial Blueprint and legislated in the FSA and IFSA, licences granted to 
foreign -owned banks are subject to prudential and best interest of Malaysia criteria. These criteria 
entered into effect upon the entry into  force of the FSA and IFSA on 30 June 2013.  
3. Is there any discretionarity of the Minister of Finance on banking licencing, or its decision is 
strictly vinculated to BNM recommendations?  
Answer : 
While the Minister of Finance does consider the recommendati on by Bank Negara 
Malaysia, he/she has the discretion to approve or reject an application for a banking 
licence.  
Page 110 (Para 4.86)  
The Labuan International Business and Finance Centre (LIBFC) is regulated and supervised by the 
Labuan Financial Services  Authority (LFSA): banking and insurance services are among the various 
permitted international economic activities. All activities are carried out only in foreign currencies 
and predominantly with non -residents. Two new laws entered into force in 2010, re placing 
previous legislation: the Labuan Financial Services and Securities Act and the Labuan Islamic 
Financial Services and Securities Act. According to the authorities, the intention of these new laws 
is to bring the LIBFC's regulatory and supervisory st andards up to par with international standards.  
4. The Labuan International Business and Finance Centre (LIBFC) regulatory and supervisory 
standards diverge of the onshore ones, particularly on combating money laundering and the 
financing of terrorism and proliferation subject?  
Answer : 
The Labuan IBFC is regulated and supervised by the Labuan FSA, with permitted 
financial activities carried out only in foreign currencies and predominantly with non -
residents. Following a series of enhancements to the releva nt legislation to strengthen 
the conditions for a strong regulatory and supervisory system in Labuan IBFC, measures 
are in progress to review and update prudential regulations to be in line with standards 
applied to the rest of Malaysia. Additionally, subs idiaries of Malaysian banks and 
insurance companies operating in Labuan IBFC are subject to the Central Bank's 
group -wide prudential standards and consolidated supervision.  
Financial institutions operating in Labuan IBFC are reporting institutions under 
Malaysia 's Anti -Money Laundering and Anti -Terrorism Financing Act 2001 and hence 
must comply with the same reporting requirements under the Act as applicable to 
financial institutions in the rest of Malaysia. In addition, Labuan FSA recently issued 
revised g uidelines on anti -money laundering and countering the financing of terrorism 
(AML/CFT) applicable to the financial institutions operating in Labuan IBFC to 
strengthen regulatory requirements on AML/CFT and to ensure consistency with the 
international stand ards.  
Page 111 (Para 4.89)  
Malaysia also has 13 development financial institutions (DFIs), which are either owned or 
controlled by the Government. In 2012, DFIs made up 5.6% of the financial sector's total assets 
(Chart 4.1). The 2002 Development Finance I nstitutions Act (DFIA) authorizes the BNM to regulate 
and supervise six DFIs under the standards applicable to commercial banks. The other DFIs are 
supervised by ministries or government agencies. Three of the six DFIs under the BNM's purview 
accept retail  deposits, have a large branch network, and account for 25.6% of the total number of WT/TPR/M/2 92/Add.1  
 
- 21 - 
 
  deposit accounts in the banking system. The other DFIs are supervised by ministries or 
government agencies. Three of the six DFIs under the BNM's purview accept retail dep osits, have a 
large branch network, and account for 25.6% of the total number of deposit accounts in the 
banking system.  
5. The 7 DFIs supervised by ministries or government agencies are submitted to any 
prudential standards?  
Answer:  
Since the seven DFIs  are not under the purview of the Development Financial 
Institutions Act 2002, they are not subject to the prudential standards issued by the 
Central Bank of Malaysia and are instead monitored by their respective stakeholder 
ministry or agency. Nevertheles s, under the Financial Services Act 2013 and Islamic 
Financial Services Act 2013, the Minister of Finance, with the Bank 's recommendation, 
may subject an institution that engages in financial intermediation activities to 
regulation and supervision by the B ank if it is determined that the institution poses or is 
likely to pose a risk to overall financial stability.  
Page 6 (Para 2.2)  
Bilateral Trade Agreements are seen as providing the means to achieve quicker and higher levels 
of liberalisation that would cr eate effective market access to and with trading partners. Many of 
the bilateral trade agreements are confined to trade in goods, trade in services and investment 
matters.  
6. Does any of the Malayan bilateral trade agreements comprise the Labuan Internatio nal 
Business and Finance Centre (LIBFC) offshore banking and insurance activities?  
Page 13 (Para 2.52)  
Besides removing NTBs related to trade in goods, ASEAN is also working towards removing 
barriers and restrictions in trade in services. This liberalisati on initiative is undertaken 
progressively under the ASEAN Framework Agreement in Services (AFAS) in ten packages starting 
from the First Package in 1995. The liberalisation covers 128 services sub -sectors, which includes 
air transport, financial services, transport and logistics, business sector, construction, tourism, 
recreational facilities, hotels theme parks, restaurants, retail and wholesale distributive trade, 
healthcare, private hospitals and medical care and consulting services.  
7. Does the ASEAN Fr amework Agreement in Services (AFAS) comprise the Labuan International 
Business and Finance Centre (LIBFC) offshore banking and insurance activities?   
Answer :  
6 & 7.  Yes, Malaysia 's commitments under GATS, and bilateral and regional trade 
agreements (incl usive of AFAS) include Labuan IBFC banking and insurance activities.  WT/TPR/M/2 92/Add.1  
 
- 22 - 
 
  QUESTIONS FROM CANADA  
Government Report – Malaysia (G292)  
Part II. Trade Policy Developments: 2.4, Developments in FTAs: paragraph 2.28, p. 10:  
The Government Report notes that, since t he last review, Malaysia has signed and implemented 6 
FTAs, in which 4 are bilateral and 2 are regional.  
Secretariat Report – Malaysia (S292)  
Part II. Trade and Investment Regime: Section 2.4 Trade Agreements and 
Arrangements: paragraph 2.20, p. 31:  
The S ecretariat Report notes that, out of the seven new Regional Trade Agreements (RTAs) that 
entered into force for Malaysia during the review period, three are ASEAN RTAs with third 
countries (Australia and New Zealand, India, and Korea) and four are bilatera l agreements (with 
Chile, India, New Zealand, and Australia).  
1. There seems to be a discrepancy between these two reports. The Government report refers to 
the signature and implementation of two regional FTAs while the Secretariat report refers to 
the entry  into force of three ASEAN RTAs with third countries (Australia and New Zealand, 
India, and Korea). Could Malaysia please confirm the two regional FTAs that are referenced in 
the Government report?  
Answer:  
Malaysia confirms that there are only two ASEAN RT As that entered into force during the 
review period, i.e. ASEAN -Australia -New Zealand FTA and ASEAN -India FTA (Goods). 
Both FTAs entered into force on 1 January 2010.  
The ASEAN -Korea FTA (Goods) entered into force on 1 July 2007 and for Services, in 
2009. As such, these do not come under the review period and were not included in the 
Government report.  
Secretariat Report - Malaysia (S292)  
Part II. Trade and Investment: Section 2.4 Trade Agreements and Arrangements: 
paragraph 2.15, p. 29.  
The Secretariat Re port notes that Malaysia has maintained a reasonably consistent flow of 
notifications to the WTO (Table  A2.1). As at end October 2013, notifications were outstanding with 
respect to: agriculture (tariff quotas); import licensing procedures; quantitative re strictions; and 
customs valuation. It has not yet notified its MFN tariffs for 2013, nor has it submitted import data 
for 2012. It has not notified "any new, or any changes to existing laws, regulations or 
administrative guidelines which significantly affe ct trade in services", which it is obliged to notify 
under Article III:3 of the GATS.  
Can Malaysia explain why the new regulation regarding phytosanitary requirements for grains that 
comes into force in July 2014 has not been notified to the WTO, which wou ld provide an 
opportunity for comment by its trading partners?  
Answer:  
There has been an oversight. A notification on the new regulation was forwarded to the 
WTO Secretariat in February 2014. Trading partners can send their comments on the 
notification to the Malaysian SPS Contact Point at the Department of Veterinary 
Services, Malaysia.  WT/TPR/M/2 92/Add.1  
 
- 23 - 
 
  Related documents on the new import requirements for importation of plants, plant 
products and regulated articles into Malaysia may be viewed and downloaded from 
http://www.doa.gov.my/myimport . 
Secretariat Report (S292)  
Part III. Trade Policies and Practices by Measure: Section 3.3 Measures Directly 
Affecting Exports: paragraph 3.78, page 59:  
It is noted that tax exemptions on s tatutory income are provided to certain manufacturing 
companies equivalent to 10% or 15% of the value of increased exports, provided that the goods 
exported attain at least 30% or 50% value -added, respectively. Similarly, automotive companies 
may qualify f or tax exemptions on statutory income equivalent to 30% or 50% of the value of 
increased exports, provided that the goods exported attain at least 30% or 50% value -added, 
respectively. Lastly, to encourage the export of Malaysian goods, tax exemptions on s tatutory 
income equivalent to 30%, 50% or 100% are provided to locally -owned manufacturing companies 
with at least 60% Malaysian equity that are able to achieve a significant increase in exports, 
penetrate new markets and achieve the highest increase in ex port in its category, respectively.  
2. Can Malaysia please explain how the export subsidies described in the paragraph are 
consistent with Articles 3.1(a) and 3.1(b) of the Agreement on Subsidies and Countervailing 
Measures?  
Answer:  
The incentives are  part o f the initiatives to encourage Malaysian companies to be more 
active in international trade  and adding greater value to the products. The objective is to 
encourage local companies particularly SMEs to move up the value chain.  
Malaysia is committed to fulf il its obligations under all WTO Agreements, including the 
Agreement on Subsidies and Countervailing Measures (ASCM) and will continue with 
measures to ensure our notification obligations are met.  
Secretariat Report – Malaysia (S292)  
Part IV. Trade Polici es and Practices by Measure: Section 3.2 Measures Directly Affecting 
Imports: paragraph  3.26, page 44:  
The Secretariat Report notes that, in response to requests by domestic small producers, Malaysia 
continued to maintain tariff -rate quotas for HS2012 tari ff lines in 2013. In 2011, a large proportion 
of these quotas were unfilled, and there were no imports of live swine and chicken/duck eggs for 
hatching, apparently due to a lack of demand.  
3. Could Malaysia indicate if it has plans to eventually eliminate tar iff rate quotas where there 
were low or no imports due to a lack of demand in the foreseeable future?  
Answer:  
Currently, there is no plan to remove the TRQs over the short/medium term. However, 
exemption from paying the in -quota tariff rate is given for TR Q products that are used 
for further processing.  
Secretariat Report – Malaysia (S292)  
Part IV. Trade Policies by Sector: Section 4.2 Agriculture and Livestock: paragraph  4.10, 
page  84: 
According to the Secretariat Report, the ten -year National Agro -Food P olicy 2011 -2020 aims at 
ensuring sufficient and safe food supply, making agri -food a viable and sustainable industry and 
increasing the income of agricultural entrepreneurs. It is expected to further enhance value added 
in the agri -food sector, the food su pply chain, and the education of skilled labour. Food security WT/TPR/M/2 92/Add.1  
 
- 24 - 
 
  remains an important objective under the policy, although no self -sufficiency targets are set. 
Under the 10th Malaysia Plan (2011 -2015), Malaysia revised their approach by ensuring the 
availabi lity, accessibility, and affordability of food, particularly rice, to the general public, rather 
than through self -sufficiency targets set in previous plans.  
4. Could Malaysia provide further information on measures or initiatives implemented under the 
ten-year "Agro-Food Policy 2011 -2020" aimed at ensuring a sufficient and safe food supply 
and at increasing the income of agricultural entrepreneurs?  
Answer:  
Among the long -term plans to ensure that food supply is sufficient, safe and affordable, 
as well as ensu re an increase in the income of agricultural entrepreneurs, under the NAP 
are the following : 
 increasing food production and supply through the zoning of food production areas, 
intercropping, integrating livestock with crop production, as well as expanding rice 
production activities on a large scale;  
 improving access to food through creating wider marketing channels, including 
farmer markets and mobile markets to facilitate the marketing of agricultural 
produce;  
 stabilising food prices by developing a food p rice monitoring system and food supply 
early warning system; and  
 ensuring food safety and nutrition through compliance to quality and safety 
accreditation as well as implementing campaigns on awareness of safe and 
nutritious food.  
5. Could Malaysia give furth er details on the targets and measures (including trade -related 
measures) related to food security that are set out and implemented through the policy?  
Answer:  
Production of major food commodities in NAP is projected to grow by 4.0% per annum 
from 7.6 mill ion metric tonnes in 2010 to 11.2 million metric tonnes in 2020. Production 
of fish, crops and livestock is expected to grow by 4.7%, 4.2% and 3.1% per year, 
respectively. Increased production will be achieved by increasing intensity of cultivation 
and the  use of efficient agricultural practices, high yielding breeds and up -to-date 
technology application.  
Exports of agro -food and agro -based industries are expected to maintain their growth 
momentum for the period 2010 to 2020 with the growth rate of 11.0% p er year with an 
export value of RM76.5 billion in 2020. The food processing industry is expected to 
remain a major contributor to the exports of agro -food and agro -based industries. The 
increase in export of food products is due to the increasing demand in  the global market.  
6. Table 4.1, Self -Sufficiency Ratios, 2009 -12, shows a small upward trend in self -sufficiency for 
rice. Does Malaysia expect the self -sufficiency ratio for rice to decrease with the 
implementation of the 10th Malaysia Plan?  
Answer:  
In the  10th Malaysia Plan, the Government has set to maintain self -sufficiency level 
(SSL) for rice at 70%. However, this rate will be reviewed from time to time taking into 
account the security of supply in the country, the global rice market scenario and the 
relative cost of importing. Rice production in the existing granary areas will be more 
intensive with the provision of adequate irrigation and drainage infrastructure especially 
in areas with the potential to be developed. Malaysia 's self -sufficiency level for rice is 
expected to increase from year to year for the purpose of national food security.  WT/TPR/M/2 92/Add.1  
 
- 25 - 
 
  Secretariat Report – Malaysia (S292)  
Part IV. Trade Policies by Sector: Section 4.2 Agriculture and Livestock: paragraph  4.11, 
page  85: 
The Secretariat Report st ates that, under the 2010 Economic Transformation Program the main 
goal of the Agricultural National Key Economic Areas (NKEAs) is also to shift the industry from an 
agriculture -centred focus towards agri -business. Its transformation strategy covers four k ey 
themes: capitalizing on competitive advantages; tapping premium markets; aligning food security 
objectives with increasing GNI; and participation in the regional agriculture value chain.  
7. Could Malaysia provide examples of the main measures implemented u nder the Program to 
carry out the strategy, in particular as they relate to tapping premium markets and aligning 
food security objectives with increasing GNI?  
Answer:  
Tapping Premium Markets  
The aims are to capture the growing local and global market for p remium foods. Focus 
will be given to efforts such as expanding production of premium grade fruits and 
vegetables, certified shrimps and premium -processed food (e.g. convenient ready -to-
heat meals). Four EPPs have been identified under this theme:  
 EPP 6 : Replicating integrated aquaculture model (IZAQs) to tap market for premium 
shrimp;  
 EPP 7 : Upgrading capabilities to produce fruit and vegetable for premium markets;  
 EPP 8 : Strengthening the export capability of the processed food industry through an 
integrat ed processed food park; and  
 EPP 9 : Introducing fragrant rice variety for non -irrigated areas.  
Ensuring Food Security Objectives are Consistent with Increasing GNI  
While nurturing growth in the sector, the Government will also ensure that food security 
objectives are met. As Malaysia 's population continues to grow, there is a need for 
scaling up and increasing productivity of agro -food production, such as paddy farming, 
as well as to increase national self -sufficiency and reduce subsidy dependency by both 
farmers and end consumers. Four EPPs have been identified under this theme:  
 EPP 10 : Scaling up and strengthening productivity of paddy farming in the Muda 
area;  
 EPP 11 : Scaling up and strengthening productivity of paddy farming in other 
irrigated areas;  
 EPP 12: Strengthening current anchor companies in cattle feedlots; and  
 EPP 13 : Partnering with a large foreign dairy company to establish dairy clusters in 
Malaysia.  
Secretariat Report - Malaysia (S292)  
Part IV.  Trade Policies by Sector: Section 4.6.1 Automoti ve industry: paragraph  4.60, 
page  101: 
The Secretariat notes that the approved permits  (AP) system is t o be terminated on 
31 December  2015 for open APs used vehicles, and 31 December 2020 for franchise APs. In the WT/TPR/M/2 92/Add.1  
 
- 26 - 
 
  newly launched revised National Auto Polic y (NAP - 2014, January 20, 2014), it is indicated that 
Malaysia will undertake a detailed study to assess the impact of the termination of the AP system.  
8. In view of the NAP 2014, could Malaysia explain if, and how, the study could impact the 
expected time lines for termination of the AP system?  
Answer:  
The Government will undertake an in -depth and comprehensive study on the impact of 
AP termination.  
Secretariat Report – Malaysia (S292)  
Part IV. Trade Policies by Sector: Section 4.7.6 Tourism: paragraph 4.1 .2.9, page 118:  
9. Could Malaysia provide more information on the types of requirements and restrictions in the 
area of tourist guide services?  
Answer:  
Non-Malaysian residents/citizens are only allowed to be appointed as licensed tourist 
guides on a temporary  basis subject to insufficient number of locals in certain foreign 
languages.  
Applicants must possess a valid working permit with a specific job designation as 
"Tourist Guide " from the Immigration Department of Malaysia and have full time 
employment with a licensed tour operator and/or travel agent before any application 
can be considered. The duration of employment in Malaysia must be valid for at least 
one year or based on the validity of the working permit, whichever is earlier. Foreign 
spouses of Malay sian citizens can also be considered under the Spouse Programme 
provided that approval has been granted by the Immigration Department of Malaysia. 
Furthermore, the candidate is also required to attend and pass the Basic Tourist Guide 
Course before being is sued a valid license by the Ministry of Tourism and Culture 
Malaysia.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM CHILE   
Documento WT/TPR/G/292 – Informe de Malasia  
2.5. ASEAN (pág. 14)  
Comunidad Económica de la ASEAN  
2.50. Malasia presidirá la Cumbre de la ASEAN de 2015, año en que se hará realidad la Comunidad 
Económica de la ASEAN. Así pues, la presidencia de Malasia será fundamental para asegurar que 
las iniciativas prioritarias para la Comunidad Económica de la ASEAN estén en marcha y que la 
integración económica continúe sin pro blemas después de 2015. Para ello, la ASEAN ha encargado 
recientemente dos estudios, uno realizado conjuntamente por el Instituto de Investigaciones 
Económicas de Asia Oriental (ERIA) y la Escuela Rajaratnam de Estudios Internacionales (RSIS) y 
otro elabor ado por el Instituto de Estudios sobre el Sudeste Asiático (ISEAS), que propongan 
posibles marcos para profundizar la integración en el futuro. Sus recomendaciones se basarán en 
los resultados actuales del Modelo de Comunidad Económica de la ASEAN.  
Pregunt a:  
Si bien es cierto, la puesta en marcha de una Comunidad Económica ASEN debería comenzar a 
regir en el año 2015, quisiéramos saber en términos generales, el plan de acción de Malasia para 
poder implementar en sus procedimientos y legislación interna la incorporación de una comunidad 
económica de esa envergadura.  
Answer : 
Regional integration is an on -going process, and a number of the integration measures 
have been implemented by ASEAN member states over the last two decades. In the case 
of Malaysia, as at December 2013, Malaysia has implemented over 80% of the AEC 
Blueprint measures.  For example, import duties have been substantially eliminated for 
intra -ASEAN trade, equity ownership in the manufacturing sector and the services 
sectors have been liberali sed. Similarly, cooperation, facilitation and liberalisation of 
trade in other economic sectors such as tourism, transport, agriculture, ICT, energy, 
forestry, minerals, customs, standards and conformance are being implemented.  
The formation of the AEC do es not require a specific law. Domestic laws and regulations 
are amended where appropriate and in some cases new laws are created if there is a 
need to implement a specific regional commitment.  
3.3. Sector de los Servicios (pág. 18)  
Liberalización autónom a  
3.12. El 7 de octubre de 2011, en el discurso de presentación del presupuesto de 2012, el 
Gobierno anunció una mayor liberalización de 18 subsectores de servicios en 2012, con el 
propósito de atraer inversión extranjera. Esta iniciativa se suma a los 27  subsectores de servicios 
liberalizados en 2009, de los que se daba cuenta en el informe anterior. Entre esos 18 subsectores 
se incluían los servicios de mensajería, los servicios de enseñanza secundaria técnica y profesional, 
los servicios de enseñanza se cundaria técnica y profesional para estudiantes con necesidades 
especiales, los servicios de formación profesional, los grandes almacenes y las tiendas 
especializadas, los servicios de incineración y los servicios de contabilidad y de asesoramiento 
tributa rio. Se considera que esos subsectores tienen gran importancia económica y que sirven de 
apoyo y catalizador para el Programa de Transformación Económica de Malasia.  
Pregunta :  
En el año 2012 el Gobierno de Malasia decidió 18 subsectores de servicios, con el propósito de 
atraer inversión extranjera. Al respecto, nos gustaría saber a qué subsectores se refieren y bajo 
qué criterios se eligieron dichos subsectores.  WT/TPR/M/2 92/Add.1  
 
- 28 - 
 
  Answer : 
The list of the 18 services sub -sectors that have been liberalised in 2012 are:  
1. Telecom munications (Applications Services Provider (ASP) licenses)  
2. Technical and vocational schools  
3. Technical and vocational schools with special needs  
4. Private hospitals  
5. Departmental and specialty stores  
6. Incineration services  
7. Accounting and taxation services  
8. International school  
9. Skill training centres  
10. Courier services  
11. Telecommunications (Network Service Provider (NSP) and Network Facilities 
Provider (NFP) licenses)  
12. Private universities  
13. Medical specialists clinics  
14. Dental specialists clinics  
15. Legal services  
16. Architect ural services  
17. Engineering services  
18. Quantity surveying services  
These sub -sectors have been identified as the main drivers of growth under Malaysia 's 
Economic Transformation Programme (ETP) which will transform Malaysia into a high -
income nation by 2020. It  will spur the deliberate shift towards a service -based 
economy, with the services sector contributing 65 per cent to the GDP by 2020.  
Apart from having a catalytic impact on growth of value added and employment, a more 
liberalised environment in these se ctors are expected to promote a more knowledge 
based economy that will be more diversified and less reliant on manufactured exports.  
The criteria for selection of services sectors for autonomous liberalisation include:  
 Encourage the transfer of specialise d expertise and technology;  
 Promotes opportunities for joint ventures;  
 Inject competitiveness and enhance productivity; and  
 Promotes creativity, innovation and high value jobs.  
Documento WT/TPR/S/292 – Informe de la Secretaría OMC  
2.4. Acuerdos y arreglos  comerciales (página 37)  
2.4.3. Otros acuerdos y arreglos  
2.22. Malasia está negociando ACR con Turquía, la Unión Europea y la Asociación Europea de Libre 
Comercio (AELC).17 Participa en las negociaciones del Acuerdo de Asociación Transpacífico junto 
con A ustralia, Brunei Darussalam, el Canadá, Chile, los Estados Unidos, el Japón, México, Nueva 
Zelandia, el Perú, Singapur y Viet Nam. También participa en las negociaciones de la Asociación 
Económica Amplia Regional iniciadas en 2012, que tiene por objetivo p rofundizar los vínculos entre 
las 16 economías participantes (los miembros de la ASEAN más los países con los que tiene ALC en 
vigor: Australia, China, la India, el Japón, Nueva Zelandia y la República de Corea).18 Se ha 
suscrito un ALC sobre servicios e i nversiones entre la ASEAN y la India y está previsto firmarlo en 
diciembre de 2013.  WT/TPR/M/2 92/Add.1  
 
- 29 - 
 
  Pregunta :  
De acuerdo a lo señalado en el documento preparado por la Secretaría de la OMC, Malasia se 
encuentra en negociaciones de un ACR tanto con Turquía, la Unión Europ ea y la Asociación 
Europea de Libre Comercio (AELC). En este contexto, quisiéramos saber las características de 
dichos Acuerdos, respecto a su cobertura, temas incluidos (Servicios, Inversiones, etc.) y si 
consideran exclusiones en las ofertas arancelarias . 
Answer : 
Malaysia has concluded bilateral FTA negotiations with Turkey on 15 January 2014. The 
FTA is expected to be signed in April 2014. Malaysia -Turkey FTA currently covers trade 
in goods and cooperation.  
FTA negotiations with the EU are on -going while  that with EFTA countries has just been 
launched.  WT/TPR/M/2 92/Add.1  
 
- 30 - 
 
  QUESTIONS FROM CHINA  
P8 .Para.2.17  
SME Masterplan (2012 -2020)  
2.17. Small and Medium Enterprises (SMEs) constitute 97.3% of total business establishments in 
Malaysia; the majority are in the services sect or (90%), followed by manufacturing (5.9%), 
construction (3%), agriculture (1%) and mining and quarrying (0.1%). On 12 July 2012, the SME 
Masterplan 2012 -2020 was launched. The Masterplan will adopt a new approach to SME 
development in accelerating SME gro wth through innovation and productivity through its various 
initiatives.  
Q1: Could Malaysia provide more details on its new approach to SME development ？So far, is the 
implementation of the new approach under way? How does Malaysia assess its progress and what 
is the experience that could be shared?  
Answer:  
The SME Masterplan takes a new approach to SME development. The new elements in 
the Masterplan are:  
i. Outcome -based approach through a proper Monitoring and Evaluation (M&E) 
system;  
ii. A 'live plan' concept whereby  programmes may need to be finetuned due to changes 
to the environment or problems in the implementation through the feedback loop of 
the M&E mech anism;  
iii. Programmes are demand -driven , meeting the business needs of SMEs;  
iv. The Masterplan advocates strong public private partnership . Programmes can be 
managed by the private sector but owned by a Ministry or an Agency; and  
v. Programmes  will be time-bound to address market imperfections  and information 
asymmetry . 
The implementation of the High Impact programmes (HIPs) are currently at different 
stages as the design and operational modality are being worked out with the lead 
agencies.  
P9 .Para. 2.22  
Malaysia i s proactive in facilitating business through a public -private sector special task force 
(PEMUDAH).  
Q2: What benefits have Malaysia obtained in facilitating business through a public -private sector 
special task force?  
Answer:  
1. The Task Force to Facilitate B usiness  (PEMUDAH), established in 2007, has proven to 
be a platform where the public and private sectors collaborate to create a sense of 
urgency in improving the Government service delivery, enhance Malaysia 's 
competitiveness and ensure effective implemen tation of improvement initiatives to 
create a conducive environment for doing business in Malaysia .  WT/TPR/M/2 92/Add.1  
 
- 31 - 
 
  2. In 2013, PEMUDAH focused on several key initiatives that had an impact on service 
delivery to the business community and the public at large. These include : 
a) Introduction of Standard Guidelines, simplification of statutory requirements, 
categorising risk -based and self -regulatory inspection systems and improving 
operational features of the existing One -Stop Centre (OSC) for construction 
permits;  
b) Reducing the original incorporation fee of RM3,000 for the second tier of 
authorised capital to RM1,000 effective 1 April 2013;  
c)  Reducing the time in Getting Electricity and lowering costs of providing electricity 
connections to power consumers;  
d) Introducing insolvency reforms by the Companies Commission of Malaysia (SSM) 
within the new Companies Bill which include the introduction of two corporate 
rescue mechanism provisions in the forms of 'judicial management ' and 
'corporate voluntary arrangement ' as alternatives for financially troubled 
companies to be revitalised than to be liquidated; and  
e) Standardising the import/ export process flow at major ports in Malaysia to 
expedite the import/export process. A Consultative Committee on ancillary 
charges has also been set up t o oversee issues regarding fees and charges 
imposed by logistics players.  
These improvements have resulted in Malaysia being ranked 6th among 189 economies 
in the World Bank Doing Business 2014 Report. Malaysia achieved this well -ahead of its 
target, which  was to be among the top 10 by 2015. At 6th position, Malaysia has been 
placed in the same league as Singapore, Hong Kong, New Zealand, United States and 
Denmark. This ranking also places Malaysia ahead of economies like the Republic of 
Korea, Norway, Unit ed Kingdom, Australia and Finland.  
Page 14. Para 3.4  
The Government is committed to transform the automotive industry in Malaysia to become the 
production hub in the ASEAN region by 2020.  
Q3: Considering that Malaysia Auto industry is still not fully libe ralized, does this commitment 
implicate that Malaysia auto sector will be open to more competition? If so, what steps will the 
government take in realize the policy end?  
Answer:  
 Towards realising the objective of making Malaysia the regional hub in Energy 
Efficient Vehicles (EEV), the National Automotive Policy (NAP) 2014 allows issuance 
of new Manufacturing License for all EEV segments without any restriction on foreign 
equity participation.  
 Through various FTA commitments, Malaysia is also liberalising ta riff and non -tariff 
measures towards providing a level playing field for automotive companies.  
Page 69, Para 3.105  
During the period under review, Malaysia pursued its GLC Transformation Program (2005 -15) 
aimed at turning GLCs into stronger and more resili ent and competitive companies and into 
"regional champions", without directly privatizing them.  
Q: Could Malaysia elaborate more on its GLC Transformation Program (2005 -2015)? How does the 
Malaysian government encourage the G20 companies to increase collab oration with the private 
sector?  WT/TPR/M/2 92/Add.1  
 
- 32 - 
 
  Answer : 
 Under  the GLC Transformation Programme (GLCT), the focus is on promoting the 
development of a vibrant private sector through GLCs. To achieve this, five areas 
have been identified:  
-  Collaboration and co -investments by GLCs with the private sector;  
-  GLCs to focus on the execution of the 10 -year GLCT programme;  
-  GLCs to strive towards becoming regional champions;  
-  GLCs to pioneer entry into new areas for investments; and  
-  GLCs to focus on core operations on a level pl aying field and exiting non -core and 
non-competitive assets.  
 The board and management of the G20 companies will focus on opportunities for 
enhanced value creation by collaborating and co -investing with the private sector.  
Notable  examples of collaboration  and co -investments with the private sector to date 
include Axiata and Telenor sharing infrastructure facilities in Malaysia and Bangladesh; 
MRCB and Gapurna merger; Tenaga Nasional and Malakoff collaboration in the Shuaibah 
Independent Water and Power Pla nt project in Saudi Arabia; CIMB Group strategic 
collaboration with Tune Money; Malaysia Airports joint venture with Nagamas 
International in China; and TM broadband services tie -up with Maxis.  
Para 3.121  
As at June 2013, Malaysia had granted 49,042 patent s and utility innovations, of which 46,578 
were granted to foreign nationals.  
Q5: Could Malaysia provide information on the volumes of application for patents and utility 
innovations respectively as at June 2013? Among which, what is the proportion of appl ication by 
foreign nationals?  
Q6:.As of June 2013, according to the statistics from Malaysia, how many applications for patents 
and utility innovations are from Chinese nationals respectively? And how many applications are 
granted to the Chinese nationals ? 
Answer:  
 From 1986 to June 2013, a total of 124,587 applications were filed in Malaysia, of 
which 112,937 were filed by foreign nationals.  
 From 2008 to June 2013, 626 patents and utility innovation applications were 
submitted by Chinese nationals. A tota l of 200 patents and utility innovations were 
granted to Chinese nationals in the same period.  
Para 3.122  
No compulsory licenses or rights of government have been granted since 2005. However, in June 
2012, the MOH enquired about the status of the Kaletra p atent from MyIPO, but there have been 
no requests for compulsory licenses for this or any other HIV medication.  
Q7: According to the report, no compulsory licenses or rights of government have been granted 
since 2005. Could Malaysia please explain if there  were any grants given or if there were any 
applications placed before 2005? If that is the case, where could we find the relevant information?  WT/TPR/M/2 92/Add.1  
 
- 33 - 
 
  Answer:  
The Government of Malaysia has used the Rights of Government provision to exploit 
patented HIV/AIDS med icine on 1 November 2003 for a period of two years and there 
has been no compulsory license or Rights of Government granted since then.  
Page 117, Para. 4.117  
No compulsory licenses or rights of government have been granted since 2005…….  MISR 
registered ve ssels may undertake domestic trade. Information was not available on fiscal and non -
fiscal benefits available to ships registered under the MISR.  
Q8: Please explain if Malaysia vessels registered under MISR and ship -owner enterprises enjoy any 
preferential  tax treatment or preferential treatment in any other fields? If that is the case, please 
provide more detailed information.  
Answer:  
Ships registered under MISR can undertake "shipping operations" as defined under the 
Labuan Business Activity Tax Act (LBAT A) and are eligible for the preferential tax 
treatment under LBATA at the rate 3% of net profit or RM20,000 whichever is lower.  
Page 117, Para. 4.118  
The transhipment of containers by foreign vessels has been permitted on certain routes  
Q9: Are there any laws and regulations stipulating on the transshipment of containers by foreign 
vessels?  
Q10: Please explain the rational for choosing the ports and routes listed.  
Q11: Please indicate if the policy has been effective.  
Answer:  
The carriage of goods between two ports in Malaysia falls under the Cabotage Policy. 
However, to encourage and promote Port Klang and the Port of Tanjung Pelepas as a 
load centre and transhipment hub respectively, the policy was partially liberalized to 
allow foreign container vessels to carry transhipment boxes between the specified ports. 
The transhipment in Port Klang and the Port of Tanjung Pelepas has been growing over 
the years and the partial liberalization also contributes to this growth. The liberalisation 
was effected through the gazettes on 15 September 1994, 17 February 2003, 13 June 
2006 and 3 June 2009.  
Import Licensing  
Q12: According to reports from Chinese enterprises, Malaysia excise import license permit for silk 
fabric. Import permit are only granted to a few limited Malaysian companies, whereas other 
companies even registered in Malaysia cannot get accession to the import permit. Chinese 
companies believe that this system prevent them from engaging in import and distribution 
business. We would be appreciated in having  Malaysian explanation on this and any future plan in 
improving the situation.  
Answer:  
Silk and articles made from silk including silk fabric fall under tariff codes 50 01, 50  02, 
50 03, 50 04, 50 05, 50 06, 50 07, 56 04 and 62 06. Importation under the ta riff codes 
mentioned does not require an import license permit.  WT/TPR/M/2 92/Add.1  
 
- 34 - 
 
  P 7. Para. 7  
While a full list of remaining FDI caps across all sectors of the economy was not available, FDI 
limits were identified in the context of this Review in: fisheries, energy, telec ommunications, 
telecommunications, and air and maritime transport. Foreign participation in public -private 
partnership projects may only be considered in certain cases.  
Q13: Please indicate the latest time that a full list of remaining FDI caps across all sectors of the 
economy could be accessible in order to enhance transparency for access of foreign investment.  
Answer:  
There is no equity restriction in the manufacturing sector except for sensitive sectors of 
national security, public interest, and preserv ation of culture and heritage.  
For information on the foreign equity caps in the services sector, please refer to the 
custodian Ministries/Agencies, including their website.  
Q14: Please explain in what case foreign participation in public -private partnersh ip projects may 
be considered?  
Answer:  
Foreign participation in public -private partnership projects in Malaysia may be 
considered in areas where Malaysia is yet to have or lacks expertise. Such areas include 
green technologies and high -tech projects such a s waste to energy. This is in line with 
Malaysia 's PPP development policy which emphasises a "balanced approach " – i.e. 
increasing the competency and competitiveness of local firms and allowing the 
involvement of foreign firms in smart partnerships with lo cal firms.  
P9 Para.14  
A considerable portion of Malaysia's tariff lines remain subject to import licensing, most of which is 
non-automatic and continues being used as a tool of trade and industrial policy for, inter alia, 
regulating the flow of imports an d promoting selected strategic industries.  
Q15: Could Malaysia explain if there are any plans to gradually reduce tariff lines subject to non -
automatic import licensing and if there is any timetable set for the reduction?  
Answer:  
Malaysia will continue to review and gradually liberalise the import licensing 
requirements taking into account the overall development objectives of the nation. In an 
exercise taken in 2011, Malaysia had abolished licensing requirements for 1,218 tariff 
lines out of 2,428 tariff l ines. Further rationalisation of licensing requirements is on -
going.  
P9. Para 15  
Support is available for exports of certain fresh and dried fruits, fresh and dried flowers, 
ornamental plants and ornamental fish, and manufactures, in the form of statutory  income tax 
exemption ranging from 10% to 50% of the value of increased exports depending, inter alia, on 
the activity, value -added and/or ownership. Similar exemption of statutory income tax equivalent 
to 50% of the value of increased export is available to companies in selected services sectors. 
Other support measures remain in place, such as export processing zones involving local content 
requirements (since 2011), concessionary credits, insurance, and guarantees, as well as 
government -sponsored promotio n and marketing assistance.  
Q16: What are the criteria for providing this kind of support? We would be appreciated if Malaysia 
could explain how to ensure coherence of this policy with WTO non -discrimination principle.  WT/TPR/M/2 92/Add.1  
 
- 35 - 
 
  Q17: As exemption of statutory income  tax equivalent to 50% of the value of increased export is 
available to companies in selected services sectors, please explain if local and foreign companies 
enjoy the same treatment?  
Answer:  
As we are moving toward a high income nation or developed countr y, it is very 
important for Malaysia to increase participation in international trade. The initiative is to 
encourage Malaysian companies especially SMEs to be more active in international trade 
and adding greater value to the products.  
Page 9, Para 16  
The Malaysian economy remains one of the most highly subsidized in the region and the world. A 
reform aimed at rationalizing the subsidies regime on gasoline, cooking gas, electricity, and road 
tolls was launched but has accomplished little so far; renewed e mphasis was placed on these 
efforts in October 2013.  
Q18: Since last October up to now, is there any new development on rationalizing the subsidies 
regime on gasoline, cooking gas, electricity, and road tolls? If not, please indicate the reasons for 
the sl ow progress and if there are specific measures for improvement?  
Answer:  
Malaysia introduced the Subsidy Rationalisation Programme in 2010 to remove 
distortions in the marketplace and to improve resource allocation. Since then, subsidies 
for fuel, specifica lly petrol, diesel and liquefied petroleum gas (LPG), as well as sugar, 
have been gradually reduced. Further cuts in subsidies for these and other products are 
planned to strengthen government finances and improve economic efficiency.  
Page 55, Para 3.64  
Due to Malaysia's decentralized public procurement system, no data on annual purchases by 
procurement method and origin (domestic, foreign) since 2010 were available from the authorities.  
Q1: Malaysia became an observer to the WTO Agreement on Government Pro curement in 2012.  
The present practice remains that International tenders are invited only if goods and services are 
not available locally. Please indicate if Malaysia has any plan to take steps within 3 -5 years to 
provide equal and non -discriminatory trea tment to local and foreign tenders?  
Answer:  
Government procurement is a tool to increase the opportunities of local suppliers and 
contractors, to boost the domestic economy and increase the participation of locals in 
economic development, as well as to de velop capacity building. Liberalisation of 
government procurement policy will be considered once the Government is satisfied that 
the local suppliers and contractors are able to compete on an even playing field with 
international players.  
P20. Para. 1.22  
In July 2011, a new scheme to register foreign workers (this category excludes expatriates) 
residing in Malaysia, the 6P Program, was launched.  
Q20: With the arrival of citizens from abroad, and upon the enforcement of the new scheme, what 
measures is the M alaysian government going to take to safeguard the interests and rights of the 
foreign labors?  
China has not been a traditional exporter of labor service to Malaysia. Malaysia only permits 
Chinese professionals and technicians to apply for work permit in M alaysia, but work permits for 
them are not easy to obtain. With more and more Chinese enterprises making investment and WT/TPR/M/2 92/Add.1  
 
- 36 - 
 
  setting up plants as well as contracting construction in Malaysia, China expects that Malaysia take 
further steps to allow and facilitat e more Chinese labors to enter Malaysian market. We would be 
appreciated Malaysia could elaborate more on this.  
Answer:  
 The Malaysian Government recognizes only documented foreign workers to work in 
Malaysia. Through the 6P Program, all undocumented migran t workers are given the 
opportunity to be legalized and be employed. Workers who have registered and have 
been legalized will be protected under the labour and immigration laws during their 
period of employment in Malaysia.  
 As for foreign  workers from Chin a, the Malaysian Government signed a Memorandum 
of Understanding on 15 September 2003 with China to employ workers (unskilled 
workers) from China. To date, there are 12,005 working in 5 formal sectors 
(construction, plantation, agriculture, service and man ufacturing) and one informal 
sector (domestic worker). Besides that, skilled and semi -skilled workers from China  
are also employed in Malaysia for 4 sub sectors i.e. furniture, ceramics, wood 
processing and heritage maintaining  
Paragraph 2.35 (page 35, Gov ernment Report)   
While a full list of remaining FDI caps across all sectors of the economy was not available, 
economic activities where FDI limits were identified in the context of this Review were in the areas 
of: fisheries, energy, telecoms, air transpor t, and maritime transport.  
Q21: Has Malaysia sorted out the full list of FDI caps  across all sectors of the economy?  
Answer:  
 Since the autonomous  liberalisation initiatives of the services sector took place in 
2009 and 2012, the FDI caps have been removed  for 45 liberalised services sub -
sectors where foreign investors could have up to 100 per cent equity except for the 
telecommunications services sector (Network Service Provider (NSP) and Network 
Facilities Provider (NFP) licenses).  
 Additionally, for the t elecommunications services sector, the FDI caps have been  
autonomously liberalised where foreign investors are allowed up to 70 per cent 
equity for Network Service Provider (NSP) and Network Facilities Provider (NFP) 
licenses.  
 For other sectors, the FDI ca ps remain as in Malaysia's commitments in GATS.  
 However, the sectors regulators may impose equity conditions for the strategic 
sectors  (i.e. banking, insurance, energy, telecommunications, agriculture, air 
transport and maritime transport).  
 For further  information on the autonomous liberalisation with respect to the FDI 
caps for the 45 services sub -sectors, please visit myservices.miti.gov.my  
Q22: Has Malaysia ever published any list of FDI caps or does it have any such kind of plan?  
Answer:  
 For further information  on the autonomous liberalisation with respect to the FDI 
caps for the 45 services sub -sectors, please visit  http://myservices.miti.gov.my/ . 
 Foreign investors who are interested in investing in the st rategic sectors (i.e. 
banking, insurance , energy, telecommunications, agriculture, air transport and 
maritime transport) should contact the sectoral Ministries or regulators for further 
details on the FDI caps.  WT/TPR/M/2 92/Add.1  
 
- 37 - 
 
  Page 42, Para 3.23   
The complexity of the tar iff structure remains relatively unchanged since 2009; there are some 51 
(52 in 2009) different rate bands, including duty -free rates (19 ad valorem, 19 specific, 11 
compound, 2 alternate duties).  Specific, compound, and alternate duties apply to 83 nine -digit 
HS12 tariff lines accounting for 0.4% (pineapples, alcoholic beverages, certain tobacco), 0.4% 
(tropical fruits, certain tobacco, alums, iron/steel scrap ingots), and 0.02% (creped/crinkled paper, 
automotive air conditioners) of total tariff lines. Ad  valorem tariff rates still range from zero to 
60% (glazed ceramic paving, hearth or wall tiles) for industrial products and 90% (round cabbage) 
for agricultural products. …The Malaysian tariff could be further rationalized, for example, by 
reducing the nu mber of rate bands.  
Q23: During 2009 -2013, Malaysia reduced one tariff rate band and The complexity of the tariff 
structure remains relatively unchanged. Does Malaysia have any plan to adjust the complex tariff 
structure and further enhance its rationality ? 
Answer:  
Malaysia is continuously reviewing its tariff structure to be in line with WCO 
commitment . 
Page 45 , Para 3.28   
Following the unilateral tariff reductions during the review period (section 3.2.2.1), the overall gap 
between the simple average MFN a pplied tariff rate and the simple average bound tariff rate could 
have risen from 8.2 to 10 percentage points (CTS) or from 15.6 to 17.4 percentage points (Tariff 
Profile). The gap could be 8.1 (CTS) or 63.9 (Tariff Profile) percentage points for rates aff ecting 
agricultural items (WTO definition), and 10.5 (CTS) or 8.9 (Tariff Profile) percentage points for 
industrial items. This gap and the relatively high proportion of unbound lines continue to provide 
ample scope for the authorities to raise applied tar iffs, thus allowing for a potentially high degree 
of unpredictability over tariff barriers facing imports in Malaysia's market;   
Q24: During the review period, the overall gap between the Malaysia simple average MFN applied 
tariff rate and the simple avera ge bound tariff rate have shown a rising tendency, providing ample 
scope for the authorities to raise applied tariffs. Does Malaysia have any plan to narrow the overall 
gap? If it is the case, please be specific.  
Answer:  
Tariff review including the review of bound tariff is an on -going process and any revision 
will be done in consultation with the various stakeholders involved.  
Paragraph 4.54  
Q25: Please explain what specific policies Malaysia has followed to enhance Malaysia 's electrical 
and electronics (E &E) industry and other industries ' GVC participation rate? Any experience in this 
regard that could be shared would be appreciated.  
Answer:  
Promoting the development of E&E towards more complex and high value added 
products and activities, as well as adopt ing the eco -system concept to promote 
investments in sectors, has been the key strategies that will complete the E&E value 
chain. In addition, focus is given on Research and Development (R&D) and Design 
activities as well as the application of new and emer ging technologies as the E&E 
industry application cuts  across all other sectors such as the medical devices and 
aerospace industries.  WT/TPR/M/2 92/Add.1  
 
- 38 - 
 
  Page 99. Para. 4.57  
In 2012, Malaysia was the world's 23rd largest car producer, just behind Italy and Poland, and the 
third largest producer and automotive market in ASEAN. The industry consists of 11 motor vehicle 
manufacturers, 9 motorcycle manufacturers and more than 800 parts and components 
manufacturers. In 2012, the Malaysian firms Perodua and Proton dominated the dom estic market, 
although with relatively reduced shares of 30.1% and 22.5%, respectively; in 2008 they jointly 
accounted for 62.4% of vehicles sold. Among the foreign companies operating in Malaysia, Toyota 
(16.8%) outperformed its two other major non -nation al peers (Nissan (5.8%), Honda (5.6%)). 
Other foreign car manufacturers (e.g. Volkswagen (a newcomer, see below), Hyundai Inokom, 
Mitsubishi, Isuzu, and Suzuki) shared the remaining 19.2% of the market.  
Q26: If the Chinese enterprises would like to enter into the Malaysia auto parts market, what kind 
of laws and regulations and industry policies they should follow? Please explain.  
Answer:  
Issuance of Manufacturing License for manufacturing of parts and components activities 
has been liberalised with no res triction on foreign equity participation.  
Q27: With more and more Chinese enterprises going to ASEAN countries, Chinese entities engage 
in auto parts or even vehicle production in Malaysia. With regard of Malaysia industry policy and 
potential preferential  policy to be provided within the meaning of ASEAN free trade agreement, 
what fields could be more open to the Chinese auto and vehicle enterprises?  
Answer:  
Malaysia's  automotive industry is continuously being liberalised through NAP. Therefore, 
Chinese co mpanies can leverage on opportunities arising from this NAP as well as 
market liberalization through various FTAs to enhance their participation in and access 
to the Malaysian automotive market . 
Page  101. Para.4.59  
To improve the competitiveness of parts a nd component manufacturers and to enhance their 
contribution to the automotive industry and economy, the Automotive Development Fund (ADF) 
and Industrial Adjustment Fund (IAF) continued to provide them with soft loans/grants. No 
information on the terms of  concessional loans and grants, or their allocation (by beneficiary) or 
the budgetary cost of ADF and IAF support since 2010 was available from the authorities.  
Q28: Please indicate if foreign auto manufacturers could apply for soft loans/grants provided b y 
ADF AND IAF? Are there any ownership restrictions in this regard?  
Q29: Could Malaysia please provide information on the terms of concessional loans and grants, or 
their allocation (by beneficiary) or the budgetary cost of ADF and IAF support?  
Answer:  
The ADF and IAF were introduced to assist the automotive industry to adjust and 
maintain their competitiveness in light of the liberalisation exercises undertaken by 
Malaysia. This assistance is given to all motor vehicle and motorcycle 
manufacturers/assemble rs incorporated in Malaysia.  
P.112. Para. 4.94   
Information was not available on the number of fixed and mobile telephone providers in Malaysia, 
the respective market share of each of these providers or foreign investment in these companies.  
Q30: How many fixed and mobile telephone providers are there in Malaysia? What are the shares 
of each of these providers or foreign investment in these companies ? WT/TPR/M/2 92/Add.1  
 
- 39 - 
 
  Answer:  
There are three fixed line providers and 7 mobile telephone providers in Malaysia.  
Equity Stake (%)  in Major Public Listed C&M Companies 2012  
Telcos  Substantial Shareholders  Non Substantial 
Shareholders  Total No. of 
Shares (billion)  Foreign  Local  
Others  Bumiputera  
Maxis  3 79 8 10 7 
Axiata  14 57 8 21 9 
DiGi 54 27 5 14 8 
TM 4 63 12 21 4 
TIME 3 72 - 25 1 
Source: MCMC industry performance report 2012 . 
P.112. Para 4.95   
In December 2012, the Communications and Multimedia Commission allocated the necessary 
mobile spectrum for 4G services to eight companies.  
Q31: Please be specific about the 8 c ompanies that have obtained mobile spectrum for 4G 
services.  
Answer:  
The 8 companies which have obtained mobile spectrum license for 4G licenses are as 
follows.  
1. Celcom Axiata Bhd,  
2. DiGi Telecommunications Sdn Bhd,  
3. Maxis Broadband Sdn Bhd,  
4. Packet One Netw orks (M) Sdn Bhd,  
5. Puncak Semangat Sdn Bhd,  
6. REDtone Marketing Sdn Bhd,  
7. U Mobile Sdn Bhd,  
8. YTL Communications Sdn Bhd.  
P112. Para. 4.96   
two types of licence are granted: "individual licences" are granted for certain activities where there 
is a high need f or regulatory control, and "class licences" are granted where lighter regulation is 
needed. Foreign owned companies must be incorporated in Malaysia in order to provide any 
licensed activity. The authorities indicated that licences are generally approved i f applicants can 
meet all the licensing conditions, provide a sound business plan and be in line with national policy 
objectives and interests.  
Q32: Please explain the rational and criteria for defining "individual licenses " and "class licenses ". 
Q33: Are there any specific requirements for foreign owned companies?  
Answer:  
The rational for 'individual licenses ' and 'class licenses ' is to demarcate the scope of 
activities within the category of licenses issued. An 'individual license ' would indicate 
the exte nsive area of coverage for the service and normally comes with bigger and 
complex business plans and the cost is also higher whereas 'class licenses ' normally 
provide small or localised services.  WT/TPR/M/2 92/Add.1  
 
- 40 - 
 
  The requirements are the same for foreign and local companie s, but for any foreign 
owned company to operate in Malaysia, it has to be incorporated in Malaysia.  
Advertisement service  
Q34. If the foreign owned companies would like to set up an advertise company in Malaysia, will 
national treatment be accorded to the m? 
Q35: Please provide information on Malaysia 's legal system regulating the advertisement industry.  
Answer : 
Currently there is no single body that regulates the advertisement service industry.  
For guidelines which apply to advertisements communicated elec tronically, which 
includes television, radio, online services and audiotext hosting services, the Malaysian 
Communications and Multimedia Content Code provides the governing standards and 
practices in the communications and multimedia industry and is avail able at the 
following URL:  
http://www.skmm.gov.my/skmmgovmy/files/attachments/ContentCode.pdf . 
SECOND BATCH  
PART I:  QUESTIONS R EGARDING THE GOVERNM ENT REPORT  
P3. Para.1.3  
The inflation rate in 2010 was 1.7% due to economic stability. Inflation, however, 
increased to 3.2% in 2011 due to higher global commodity prices, partly attributable to 
the political instability in the Middle East and North Africa (MENA) regions; disrupt ion in 
domestic food supplies; and upward adjustments to administered prices. In 2012, the 
inflation rate remained benign at 1.6%. Between January to October 2013, inflation was 
recorded at 1.9%.  
Q36：During 2009 -2013, owning to the quantitative easing policy, a strong liquidity prevail 
globally, and the level of inflation rate in emerging markets remain high. By contrast, Malaysia’s 
inflation rate remains stable. Please elaborate on how does Malaysia strike a balance between 
curtaining inflation rate and maintain growth.  
Answer : 
Inflation in Malaysia during the period 2009 -2013 exhibited similar trends to those of 
regional emerging economies. Inflation in Malaysia rose in 2010 and 2011, from 
relatively  low levels in 2009, due partly to rising global commodity prices. However, 
inflation in Malaysia declined in 2012, and has remained moderate in 2013. This 
reflected the relatively benign increases in global commodity prices, in light of larger 
increases i n global supply amid slower rise in global demand.  
Sectoral Policies  
P13. Para.3.1  
It aims to build up higher value -added subsectors such as LED lighting, solar panels and 
generic drug manufacturing.  
Q37:  In what way does Malaysia find patent solution for  generic drug manufacturing?  WT/TPR/M/2 92/Add.1  
 
- 41 - 
 
  Answer : 
Malaysia incorporates TRIPS flexibilities in its law such as Bolar provisions and 
compulsory licensing.  
P15. Para 3.12  
3.12.  On 7 October 2011, in the 2012 Budget Speech, the Government announced 
further liberalizatio n of 18 service sub -sectors in 2012, with the aim of attracting 
foreign investment. This initiative is an addition to the 27 services sub -sectors that were 
autonomously liberalized in 2009 and reported in the previous review. These 18 sub -
sectors included courier services, technical and vocational secondary education services, 
technical and vocational secondary education services for students with special needs, 
skills training services, departmental stores and speciality stores, incineration services 
and a ccounting and taxation services. These services sub -sectors were identified as 
having high economic impact that support and serve as enablers to Malaysia's Economic 
Transformation Programme.  
Q38: Does Malaysia have any liberalization initiatives in the su b-sectors of preschool education, 
elementary education and higher education?  
Answer : 
MOE has allowed autonomous liberalization for services sector under higher education 
from year 2012 subject to two (2) conditions as follows:  
i. Only applicable to private hi gher educational institutions (PHEIs) with University 
status;  
ii. Institution must attract at least 30% international students within 5 years from 
date of operation.  
Q39: If that is the case, please brief on the possible timetable and details of the initiative s. 
Answer : 
The implementation of liberalisation of Private Higher Education Institutions with 
University status was effective from 1st January 2012 through the announcement by 
YAB Prime Minister of Malaysia during 2012 budget speech.  
The Private Higher Ed ucational Institutions Act (Act 555) is continuously being revised 
to create the desired environment in promoting the development of services sector in 
Malaysia, which is in line with the liberalization initiatives made in 2012.  
On top of the 2 conditions mentioned before, foreign private higher educational 
institutions wishing to be established in Malay sia must also be in the top 
100 international rankings. This condition is however eff ective only up until 
31 January  2015.  
Way Forward  
P18. Para. 5.1  
In 201 4, the Malaysian economy is expected to improve supported by robust domestic 
demand and positive improvements in external sector as the export products is expected 
to be more competitive.  
Q40：What measures have Malaysia taken to stimulate domestic demand and were they effective? 
What are the future steps in achieving this goal?  WT/TPR/M/2 92/Add.1  
 
- 42 - 
 
  Answer : 
Under the Tenth Malaysia Plan, 2011 -2015 (10MP), several key strategies that have 
been undertaken to stimulate domestic demand include:  
a. Energizing the private sector invest ment  
• While both fiscal and monetary policies continue to support private initiatives, 
improvements in the business environment to boost private investment are 
continuously been given priority, including measures to liberalise the economy.  
• The Governme nt Transformation Programme (GTP) is being implemented to 
streamline bureaucratic processes and reducing the costs of doing business.  
• The Malaysian Investment Development Authority was also empowered to attract 
and retain foreign direct investment (FDI)  in Malaysia.  
The strategies undertaken have shown some results, among others:  
• The economic reform measures such as modernising of business regulations, human 
capital development, increasing domestic competition, removing market distortions 
and improvi ng infrastructure have provided the enabling ecosystem for the 
successful implementation of the NKEAs.  
Since 2010, 196 projects were launched under the NKEAs with total  committed 
investments of RM219 bi llion, which are projected to contribute  RM144 billi on to GNI 
and create 437,816 new jobs by 2020.  
• Malaysia achieved a commendable surge to 6th position among 189 economies in 
the latest World Bank Doing Business 2014. At 6th position, Malaysia has been 
placed in the same league as Singapore (1st), Hong Kong (2nd), New Zealand (3rd), 
United States (4th) and Denmark (5th). Among ASEAN countries, Malaysia is ranked 
2nd after Singapore.  
• Moving forward, Malaysia will continue its effort to move to an economy that is 
driven by productivity, innovation and th at is able to nurture, attract and retain 
talent, companies and capital. Malaysia will also continue to focus on specialisation 
in a few selected economic sectors and geography, where Malaysia has a relative 
competitive advantage.  
• The measures that have  been implemented were effective as reflected in the strong 
GDP growth which expanded 4.7% in 2013 despite a challenging external sector. In 
addition, private investment in 2013 increased strongly by 13.6% while net inflow 
of foreign direct investment (FDI ) expanded further to RM38.8 billion (2012: 
RM31.1 billion).  
PART II:  SECRETARIAT REPORT  
P7. Para.3  
In line with its various capital markets and financial -sector development plans, Malaysia 
has relaxed or abolished several foreign -exchange policies.  
Q41:   Please elaborate on those foreign -exchange policies that have been relaxed or abolished. 
What kind of impact do they have on Malaysia’s Balance of Payment situation?  WT/TPR/M/2 92/Add.1  
 
- 43 - 
 
  Answer : 
As part of efforts to enhance competitiveness of the economy (through enhancing 
business efficiency and reducing cost of doing business) Malaysia continues to provide 
greater flexibilities to facilitate trade, as follows:  
 Since August 2010, residents are allowed to undertake settlement of international 
trade in goods and services with  non-residents in ringgit, in addition to settlement in 
foreign currency (except for the currency of Israel);  
 Since June 2013, non -residents are allowed to undertake anticipatory hedging 
involving ringgit for current account transactions with licensed onsh ore banks; and  
 Since November 2013, non -resident financial institutions that meet the prudential 
requirements are allowed to offer ringgit trade financing in collaboration with  
licensed onshore banks to facilitate international trade of goods and services with 
residents.  
In addition, continuous efforts have been undertaken to further facilitate the 
development of the domestic financial markets in line with the Financial Sector 
Blueprint, which include the following flexibilities:  
 Since January 2012, licens ed onshore banks are allowed to trade one foreign 
currency directly against another foreign currency with any resident;  
 Since June 2013,  
  residents are allowed to undertake anticipatory hedging involving ringgit for 
financial account transactions with lic ensed onshore banks;  
  residents are allowed to invest in foreign currency assets offered onshore; and  
  residents and non -residents are allowed to issue foreign currency securities in 
Malaysia.  
The flexibilities accorded have increased the ability of the financial markets to 
effectively intermediate financial flows, and contributed to increased two -way flows and 
thus stabilisation of financial markets.  
P7. Para.7  
While a full list of remaining FDI caps across all sectors of the economy was not 
available, F DI limits were identified in the context of this Review in: fisheries, energy, 
telecommunications, telecommunications, and air and maritime transport. Foreign 
participation in public -private partnership projects may only be considered in certain 
cases. The  investment environment remains affected to a certain extent by policies 
favourable to the bumiputera community and Malaysians in general.  
Q42: What measures are adopted by policies favourable to the bumiputera community and 
Malaysians in general and what sectors are covered?  
Answer : 
The policy of economic growth in Malaysia is implemented through growth with equity. 
The policy allows the growing economic pie (expanded economic cake) to be shared 
more equitably and based on an inclusive development approac h. This approach is to 
ensure equal opportunity to participate in economic activity and to enjoy a more 
balanced distribution of wealth among various ethnic groups in the country.  WT/TPR/M/2 92/Add.1  
 
- 44 - 
 
  Realizing that there is still socioeconomic gap in the society, the Governme nt has 
undertaken initiatives to allow disadvantage groups in the society to access economic 
opportunity through affirmative action. However, the Government has also significantly 
open the economic sector by introducing policies that allow better involveme nt of 
economic players,  both local and foreign investors. Among the steps taken are:  
a) liberalizing  the Foreign Investment Committee (FIC) Guidelines;  
b) liberalization of  the Bumiputera equity condition  in 27 services sub -sectors;   
c)  liberalization of the  financial and banking sector ;  
d) relaxation of Bumiputera equity requirement for activities under the 
manufacturing sector since 2003;and  
e) relaxation of equity condition in  the specific locations such as in  the Multimedia 
Super Corridor  and growth corridors.  
Q43:   What factors will be taken into consideration in promoting public -private partnership 
projects, or in other words, what the preconditions that could make the public -private projects 
feasible?  
Answer : 
A public private partnership procurement model will o nly be considered if there is a 
need on the part of the Government for the project after taking into account the cost and 
benefit as a whole in terms of:  
(i) socio -economic impacts;  
(ii) value for money and cost savings to the Government;  
(iii) faster deli very of the project and service enhancement; and  
(iv) increased level of accountability, efficiency and effectiveness.  
PPP in Malaysia is very much driven by value for money which is optimised through 
efficient allocation of risks, whole life service appro ach, private sector innovation and 
management skills as well as synergies from inter -linking the design, finance, 
construction and operations.  
2.5 Investment Regime  
P34. Para 2.26  
Manufacturing licenses, which are required for persons engaging in manufactu ring 
activities over a certain size, are issued automatically within seven days unless they 
relate to sensitive industries/activities: security, safety, health, environmental and 
religious considerations; projects proposed to be located in Sabah or Sarawak ; or 
projects requiring approval under the Petroleum Development Act.   
Q44：In this line, please explain if stricter restrictions are excised in the above mentioned areas 
on foreign investment. Are there any further plans to ease the restrictions in those areas?  
Answer : 
Malaysia has undertaken various measures to improve its competitiveness. Among the 
measures include improvements to the government delivery system in the 
manufacturing sector. Effective 1 December 2008, automatic issuance of Manufacturing WT/TPR/M/2 92/Add.1  
 
- 45 - 
 
  License has been granted under the Industrial Coordination Act, 1975 except for 
sensitive industries/activities related to security, safety, health, environment and 
religious considerations, projects proposed to be located in Sabah and Sarawak, and 
projects  requiring approval under the Petroleum Development Act, 1974, where 
evaluation and approval are still required for the issuance of the Manufacturing License. 
The procedures for the sensitive industries/activities require views and feedback from 
relevant a uthorities before the Manufacturing License is considered. It is applicable to 
both local and foreign investors on non -discriminatory basis.  
P35. Para. 2.35  
2.35. Over the review period, the Government has continued to autonomously reduce or 
eliminate for eign investment restrictions in a number of services subsectors, and has 
bound the status quo of market access in the accountancy sector where no FDI 
thresholds were previously in place (see section 4.7).  
Q45: Please provide information on Malaysia’s auto nomous reduction or elimination of foreign 
investment restrictions in recent years and please indicate those subsectors.  
Answer : 
Foreign investment restrictions have been removed for 45 autonomously liberalised 
services sub -sectors whereby foreign investor s could own up to 100 per cent equity 
except for telecommunications services sector (Network Service Provider (NSP) and 
Network Facilities Provider (NFP) licenses). For these two telecommunications licensing 
category, foreign investors are allowed to own u p to 70 per cent equity.  
For further information on the autonomous liberalisation with respect to the foreign 
investments restrictions for the 45 services sub -sectors, please visit  
http://myservices.miti.gov.m y/.  
Trade and Investment Regime  
P36. Para. 2.38  
They further noted that, in general, foreign participation in any privatized entity is 
limited to a maximum of 25% of its share capital.  
Q46:  The stipulation that foreign participation in any privatized e ntity is limited to a maximum of 
25% of its share capital could keep foreign investors as minor shareholders.  Under such 
circumstance, is there any measure taken to safeguard the interests of the foreign investors.  
Answer : 
In Malaysia, the rights of minor ity shareholders are protected under common law and 
statutes. The main statute governing minority shareholders’ rights is the Companies Act 
1965.  
Trade Practice and Practices by Measure  
P46. Para. 3.81  
Export -Import Bank of Malaysia Berhad a developmental FIs wholly owned by Ministry 
of Finance Inc. (section 3.4.2) promotes the development of cross border transactions 
through provision of loan/financing facilities (at commercial rates) and insurance 
coverage to Malaysian businesses.  
Q47: Generally speaking , how long does it take for Export -Import Bank of Malaysia Berhad to 
examine a business project? What kind of requirements are set for business credit term?  WT/TPR/M/2 92/Add.1  
 
- 46 - 
 
  Answer : 
Factors to be considered:  
i. Normally, Project Finance assessment can go up to 2 months and de pending on the 
complexity of the application;  
ii. Requirements set would depend on the risk level to be assumed. As a commercial 
venture, Exim Bank has specific requirement that need to be fulfilled for companies 
to get facilities. The details criteria are set  based on:  
a) Credit risk assessment;  
b) Performance Risk assessment; and  
c) Market Risk assessment  
iii. All these need to be assessed in ensuring credit worthiness and project viability.  
Q48:  What requirements are set for Export -Import Bank of Malaysia Berhad to provi de guarantee 
and what sectors are focused?  
Answer : 
The Bank adopts Bank Negara Malaysia guidelines when assessing any applications prior 
to providing the facilities. No areas or sectors are set, as the Bank will facilitate 
exporters in any viable business proposition.  
Further information of the terms and conditions of the facilities provided by EXIM Bank 
can be found on their website at http://www.exim.com.my/ . 
P62. Para. 3.85.  
In addition to the sales tax, excise dut ies apply to tobacco, beer and liquor, motor 
vehicles, playing cards, and mah -jong tiles. The excise duty on cigarettes was increased 
in October 2010 and September 2013.  
Q49:  Please explain if there could be rising trend on excise duties applied to tobacc o?  
Answer : 
Excise duties on tobacco have increased, and rising trend is expected. This trend is 
similar in most EU countries and other parts of the world.  Raising taxes on  tobacco 
is one of World Health Organisation Framework Convention on Tobacco Control  
strategies used to reduce demand for tobacco.  
Q50:  Please explain if E -cigarettes are subject of excise duty. Currently or in the future how E -
cigarettes products could be defined?  
Answer : 
Under the Malaysian Food Act 1983, “tobacco product” means tobac co, cigarette or cigar 
or any other form of tobacco including any mixture containing tobacco which is designed 
for human consumption but excludes any medicinal product controlled under the 
Poisons Act 1952 [ Act 366 ] or the Control of Drugs and Cosmetics Re gulations 1984 
[P.U. (A) 223/1984 ]; As such, if an electric cigarette is imported with a packet of 
cartridges, the whole set may be classified together to commodity code 8543 70 90 99 
as an electrical product not elsewhere specified and will not be subject ed to excise duty. 
Malaysia has yet to determine the status of E -cigarette products in its current tobacco 
control management.  WT/TPR/M/2 92/Add.1  
 
- 47 - 
 
  Q51:  What could be the current situation or trend of legislation in this regard?  
Answer : 
With regards to enforcement, smoking E -cigarette must follow the existing Act and 
Regulations pertaining to smoking normal cigarette as the nicotine component of E -
cigarette is considered as product of tobacco.  
P62. 3.86.  
A service tax of 6% (up from 5% before 1 January 2011) applies to the va lue of certain 
services sold or provided by prescribed establishments throughout Malaysia  
Q52:  Please explain the purpose and rational for collecting the 6% service tax.  
Answer : 
The rationale for the service tax collection is to broaden the tax base and s ecure the 
sustainability of the tax revenues base.  
Q53: Please indicate its impact on the development of express delivery industry since the date of 
service tax collection.  
Answer : 
The increasing number of licensing applications received reflects that the imposition of 
service tax does not hinder the development of the express delivery industry.  
P69. Para.3.107  
Since the previous TPR of Malaysia, the legal and institutional framework governing 
competition policy has changed significantly in line with ASEAN commitments (section 
2.4.2).   
Q54. Is Malaysia’s Competition Policy in conflict with various free trade agreements Malaysia has 
signed?  
Answer : 
Malaysia currently has eleven free trade agreements of which five are regional. All the 
agreements were negotiat ed within the framework of the Competition Act 2010.  
Q55: What adjustments has Malaysia made to adapt to the relevant agreements signed in the 
ASEAN Context?  
Answer : 
In ensuring ASEAN as a highly competitive economic region as envisaged in the ASEAN 
Econom ic Community (AEC) Blueprint, the introduction of nation -wide Competition 
Policy and Law must be achieved by 2015. In this context, Malaysia has passed its 
Competition Act in 2010.  
Under the AEC Blueprint also, the ASEAN Member States (AMSs) must develop a regional 
guideline on competition policy by 2010. The ASEAN Regional Guidelines on Competition 
Policy (Regional Guidelines) were completed by the ASEAN Experts Group on 
Competition (AEGC) in August 2010, based on country experiences and international 
best practices with the view to creating a fair competition environment.  
The Regional Guidelines set out different policy and institutional options that serve as a 
reference guide for AMSs in their efforts to create a fair competition environment. AMSs WT/TPR/M/2 92/Add.1  
 
- 48 - 
 
  are no t intended to be a full or binding statement on competition policy. The Regional 
Guidelines will help to increase AMSs’ awareness of the importance of competition 
policy, with a view to stimulating the development of best practices and enhancing 
cooperatio n between AMSs.  
P102. Box 4.1  
4. Educational services  
Since 2012, 100% foreign ownership of private universities has been permitted (up 
from 51% previously) and is subject to two conditions: that it applies only to private 
higher educational institutions w ith university status; and that the institution must 
attract at least 30% of international students within five years of commencing 
operations. Up until 2015, foreign private higher educational institutions intending to 
set up private universities in Malay sia must be in the top 100 in international rankings. 
100% foreign ownership of skills training centres has been permitted since 2012. 
International schools have also been permitted to 100% foreign ownership since 2012 
(up from 20%). Since 2012, 100% forei gn ownership has been permitted in vocational 
and technical secondary schools and vocational and technical secondary schools for 
students with special needs. These schools were new categories introduced under the 
autonomous commitment.   
Q56: Does Malaysia allow foreign public universities to set up wholly foreign -owned branch in 
Malaysia?  
Answer : 
Under the private higher education sector liberalisation policy in 2012, foreign public 
universities are allowed to apply to set up wholly foreign owned branch cam pus in 
Malaysia subjected to the existing laws, rules a nd regulations of the country.  
Q57:  If a foreign educational institution would like to set up private university or international 
school (from kinder garden to senior high school), what laws, regulat ions and administrative 
measures are relevant? Please provide detailed information.  
Answer : 
There are guidelines pertaining to the establishment of  international schools - an 
educational institution that caters from preschool or kindergarten  to high school ; as well 
as for the establishment of vocational and technical secondary schools , and vocational 
and technical secondary schools for students with special needs by the MOE. These 
guidelines contain detailed and specific information regarding the establishm ent of the 
above mentioned schools, and are accessible at http://www.moe.gov.my/ . 
P103. Box 4.1  
Since November 2012, 100% foreign equity participation has been allowed for courier 
services. Previously foreign equity c aps for this subsector were unspecified. FDI was 
dealt with on a case by case basis with 100% foreign equity generally being allowed.   
Q58: Please provide information on Malaysia’s courier and express delivery market in terms of 
subsectors open up currentl y for foreign investment, commercial presence of foreign investment, 
and qualification requirements and approval procedures for foreign investment access.  
Answer : 
Same  entry requirements set for both domest ic and international companies. The 
approval/quali fication procedures are clearly stated in the MCMC website: Licensing: 
http://www.skmm.gov.my/Sectors/Postal -Courier/Licensing.aspx  and 
http://www.skmm.gov.my/Sectors/Postal -Courier/Statistics/Albums.aspx . WT/TPR/M/2 92/Add.1  
 
- 49 - 
 
  QUESTIONS FROM COLOM BIA 
Informe del Gobierno de Malasia WT/TPR/G/292  
3 POLÍTICAS SECTORIALES  
3.2 Sector agropecuario  
Los párrafo 3.5, 3.6, y 3. 7 del informe del Gobierno indican que… "Malasia considera al sector 
agropecuario una de las esferas económicas nacionales fundamentales previstas en el Programa de 
Transformación Económica. Este sector está centrado en ofrecer empleo rural, elevar los ing resos 
de la población rural y garantizar la seguridad alimentaria a nivel nacional.  
En el marco de este Programa, el Gobierno prevé la transformación del sector agropecuario para 
2020, pasando de explotaciones a pequeña escala y fragmentadas a agroindustr ias integradas a 
gran escala, de explotaciones centradas en la producción a una industria impulsada por el mercado 
y de productos de escaso valor añadido a productos de gran valor añadido. En 2012, la 
contribución del sector agropecuario al PIB fue del 7,3 %, o de 54.800 millones de ringgit.  
El 28 de septiembre de 2011, el Consejo de Ministros de Malasia aprobó la Política Agroalimentaria 
Nacional de 10 años, que se puso en marcha el 14 de enero de 2012. Se centra en mejorar la 
eficiencia de las industrias a groalimentarias a lo largo de la cadena de valor. En esta Política se 
trazan siete estrategias:  
i. garantizar la seguridad alimentaria nacional;  
ii. aumentar la contribución de la industria agroalimentaria;  
iii. completar la cadena de valor;  
iv. potenciar el capital human o; 
v. fortalecer las actividades de investigación y desarrollo, la innovación y el uso de tecnología;  
vi. crear un entorno favorable para las empresas orientadas al sector privado; y  
vii. fortalecer el sistema de suministro. " 
1. ¿Es de nuestro interés conocer los lineami entos que componen la estrategia orientada a 
fortalecer el sistema de suministro, así como los principales logros y obstáculos durante la 
puesta en marcha de dicha estrategia?  
Answer:  
Since the implementation of the National Agriculture Policy, the agricul ture sector has 
undergone a transformation and has become a more competitive sector making a higher 
contribution to the Gross Domestic Sector (GDP).  
The implementation of NAP aims to enable the agriculture sector to maintain its role as 
one of the engines  of economic growth, to improve productivity, competitiveness, 
efficiency and to implement sustainable agriculture. Despite challenges such as rising 
agriculture input costs due to spiralling oil prices and the global financial crisis, the 
agriculture sect or continues to contribute to economic growth and supply of adequate 
food. WT/TPR/M/2 92/Add.1  
 
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  Informe de la Secretaría WT/TPR/S/292  
RESUMEN  
Entorno económico  
Marco de la política comercial  
El párrafo 8 del informe de la Secretaría señala que… "La política comercial sigue cen trada en velar 
por que Malasia se convierta en una nación autosuficiente e industrializada para 2020. Se hace 
hincapié, entre otros aspectos, en la integración de las empresas malasias en las cadenas de valor 
mundiales y el desarrollo de vínculos comercial es con nuevos mercados. No se han producido 
cambios en las instituciones encargadas de la formulación de la política comercial desde 2010. Han 
entrado en vigor algunas nuevas leyes relacionadas con el comercio: la Ley del Servicio de 
Cuarentena e Inspecció n de Malasia, la Ley de Comercio Estratégico, la Ley de Competencia y la 
Ley de Control de Precios y Lucha contra la Especulación ". 
2. ¿La entrada en vigor de acuerdos comerciales y de nuevas leyes relacionadas con el comercio 
cómo influye en la formulación d e una nueva política comercial para Malasia?  
Answer:  
The formulation of a new trade policy and related trade laws will take on board, among 
other things, the commitments made in all international trade agreements.  
El párrafo 9 del informe de la Secretaría  señala que... "Malasia continúa negociando nuevos 
acuerdos comerciales regionales (ACR) a nivel bilateral y conjuntamente con sus asociados de la 
ASEAN. En el período objeto de examen han entrado en vigor para Malasia siete nuevos ACR. Tres 
de ellos son A CR entre la ASEAN y terceros países (Australia y Nueva Zelandia, la India, y Corea), 
y cuatro son acuerdos bilaterales (con Chile, la India, Nueva Zelandia y Australia). Malasia ha 
firmado y ratificado el Sistema de Comercio Preferencial de la Organización  de la Conferencia 
Islámica (SCP -OCI) y el Acuerdo sobre Aranceles Preferenciales del Grupo de Ocho Países en 
Desarrollo, cuya entrada en vigor para Malasia es inminente. Además, Malasia está negociando 
ACR con Turquía, la Unión Europea y la Asociación Eur opea de Libre Comercio. También participa 
en las negociaciones del Acuerdo de Asociación Transpacífico y en las de la Asociación Económica 
Amplia Regional de la ASEAN ". 
3. ¿De qué manera el Gobierno de Malasia afronta los retos que plantea la entrada en vigor  de 
mega acuerdos comerciales regionales vis a vis los compromisos multilaterales?  
Answer:  
As a country dependent on international trade, Malaysia is committed to a liberal and 
fair global trading environment; anchored by a rules -based multilateral trading  system 
under the WTO. Malaysia 's involvement in regional and bilateral FTAs in our view is 
mutually beneficial, and in line with the WTO objectives.  
1.ENTORNO ECONÓMICO  
4. Aspectos principales de la evolución de las políticas  
1.4.2.3 Política de competenc ia 
El párrafo 1.19 del informe de la Secretaría señala que... "Pese a la aprobación de una nueva 
legislación de gran alcance (Ley de Competencia de 2010) e iniciativas recientes para mejorar el 
entorno competitivo, el Gobierno sigue contemporizando con la posición dominante en el mercado 
de ciertas empresas, entre otros, en los sectores de la energía y las comunicaciones, que quedan 
fuera del alcance del nuevo marco jurídico (sección 3.4.4). Para asegurar la presencia de nuevos 
inversores y mantener un desa rrollo y crecimiento ordenados en el sector manufacturero del país, 
la Ley de Coordinación Industrial de 1975 (secciones 2.5.1 y 3.4.4.1) exige que las empresas 
manufactureras de un determinado tamaño soliciten una licencia de fabricación, que deberá ser WT/TPR/M/2 92/Add.1  
 
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  aprobada por el Ministerio de Comercio Exterior e Industria, lo que podría ayudar a evitar una 
competencia excesiva y poco ventajosa en la misma esfera. " 
En el párrafo 2.5.1 del informe de la Secretaría señala que… "El Organismo Malasio de Desarrollo 
de la s Inversiones (MIDA), dependiente del Ministerio de Comercio Exterior e Industria, es el 
principal organismo del Gobierno para la promoción del sector manufacturero y de los servicios 
(excepto los servicios financieros y los servicios públicos). El Comité Nacional de Inversiones del 
MIDA, creado en 2010, se encarga de evaluar las solicitudes de licencias de fabricación, incentivos 
a la desgravación del impuesto de sociedades y exenciones de los derechos de aduana…. Las 
licencias de fabricación, que son obli gatorias para las personas que realizan actividades 
manufactureras de cierta envergadura, son expedidas automáticamente en un plazo de siete días, 
a menos que se refieran a industrias/actividades sensibles: consideraciones relacionadas con la 
seguridad, la  inocuidad, la salud, el medio ambiente y la religión; proyectos previstos en Sabah o 
Sarawak; o proyectos para los que se necesita una autorización conforme a la Ley de Desarrollo de 
la Industria Petrolera. Con arreglo a la carta del usuario del Comité Na cional de Inversiones, las 
respuestas a las solicitudes de licencias de fabricación en estas esferas sensibles deberían 
otorgarse en un plazo de cuatro semanas. " 
En el párrafo 3.4.4.1 del informe de la Secretaría señala que… "Está previsto hacer extensiva la 
Ley de 2010 a todos los sectores controlados, si bien en abril de 2012 aún no se había anunciado 
ningún calendario concreto. Además, la Ley de Coordinación Industrial de 1975 (secciones 1.4.2.3 
y 2.5.1) -que exige a las empresas manufactureras en las qu e los fondos de los accionistas sean 
iguales o superiores a 2,5 millones de ringgit o que empleen 75 o más personas remuneradas a 
tiempo completo que soliciten una licencia de fabricación que debe ser aprobada por el Ministerio 
de Comercio Exterior e Indus tria - podría, en caso necesario, dar garantías a los nuevos inversores 
de que no habrá inversiones excesivas en la misma esfera ". 
4. ¿Cuáles son los criterios que tiene el Comité Nacional de Inversiones del MIDA para aprobar o 
negar una licencia de fabricaci ón, cuando la solicita una empresa que cumple con los umbrales 
requeridos?  
Answer:  
The Industrial Coordination Act, 1975 (ICA) requires person(s) engaging in any 
manufacturing activity with shareholders' funds of RM2.5 million and above or 
employing 75 or more full -time paid employees to obtain a Manufacturing Licence.  
Effective 1 December 2008, automatic issuance of Manufacturing Licence is granted 
under the Act except for sensitive industries/activities related to security, safety, 
health, environment an d religious considerations, projects proposed to be located in 
Sabah and Sarawak, and projects requiring approval under the Petroleum Development 
Act, 1974, where evaluation and approval are still required for the issuance of the 
Manufacturing Licence.  
5. ¿Se debe entender que las PYME locales y extranjeras, están exentas de la solicitud de 
licencias de fabricación en razón a que no cumplen con los umbrales de capital y número de 
empleados tiempo completo?  
Answer:  
Investments below the threshold specified by t he ICA 1975 are exempted from applying 
for the Manufacturing Licence.  
6. ¿Las empresas extranjeras que cumplan con los umbrales de capital y número de empleados 
deben solicitar la licencia de fabricación si van a instalarse en Malasia? Y los criterios de 
aprobación o negación de dicha licencia son los mismos que para una empresa local?  
Answer:  
The condition is applicable for both local and foreign investors.  WT/TPR/M/2 92/Add.1  
 
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  2. RÉGIMEN COMERCIAL Y DE INVERSIONES  
El párrafo 2.1 del informe de la Secretarías indica que... "Desde  que se realizó el último examen 
de Malasia en 2010, no se han producido cambios en las principales instituciones que intervienen 
en la formulación de las políticas comerciales. No obstante, los objetivos de política comercial y de 
inversión a medio plazo se han aclarado y articulado en diversos documentos de estrategia 
recientes, cuyo objetivo principal es velar por que Malasia se convierta en una nación 
autosuficiente e industrializada para 2020. Estas estrategias, entre otras cosas, subrayan la 
importanc ia de impulsar el crecimiento del sector privado; reducir la participación del Estado en la 
economía; promover las actividades de alto valor añadido; integrar las compañías malasias en las 
cadenas de valor mundiales; y desarrollar vínculos comerciales con nuevos mercados. " 
7. ¿Cuál ha sido el enfoque implementado por el gobierno para hacer eficiente la política 
comercial y lograr cambios sustanciales sin necesidad de hacer modificaciones en las 
instituciones que participan de la formulación de dichas políticas ? 
Answer:  
The formulation of trade policy objectives and strategies are undertaken in a 
coordinated manner involving various stakeholders, including both the public and 
private sectors. Prior to its adoption, these policies and strategies are presented to the 
Cabinet for endorsement. Subsequently, its implementation is undertaken by the 
respective ministries and agencies. Hence, such an approach does not require a change 
to the institutional set up, or where change is required it is minimal and does not dis rupt 
the implementation process.  
3. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS  
3.2 Medidas que afectan directamente a las importaciones  
3.2.1 Procedimientos aduaneros, valoración en aduana y normas de origen  
3.2.1.1 Prescripciones en materia de registr o, documentación y despacho  
El párrafo 3.13 del informe de la Secretaría señala que... "En 2012, Malasia ocupó el 11º puesto 
(el 12º en 2011, el 37º en 2010) entre 185 economías en cuanto a la facilidad del comercio 
transfronterizo; según la Corporación Fi nanciera Internacional (CFI) del Banco Mundial, para la 
importación de un mismo contenedor de mercancías se requerían en promedio 6 documentos, 8 
días (10 en 2010) y 420 dólares EE.UU. (450 en 2010). En 2012, el despacho de la carga (desde la 
llegada de la  expedición hasta su puesta en circulación) requería en promedio 3,63 días (3,2 en 
2007) para la carga marítima y 2,14 días para la carga aérea (0,8 días en 2007); los trámites 
aduaneros (como el registro, la inspección y la percepción de los derechos) req uerían 1,25 horas 
(13 en 2007) para la carga marítima y 1,25 minutos (30 en 2007) para la carga aérea. Para los 
importadores registrados como agentes económicos autorizados, que sustituyeron a los "clientes 
de oro de la Administración de Aduanas" en enero de 2010, el tiempo medio entre la presentación 
de la declaración aduanera y el despacho de las mercancías era de 15 minutos en 2012 (el mismo 
que para los "clientes de oro" en 2007); actualmente hay 48 empresas acreditadas como agentes 
económicos autorizad os. 
8. ¿Malasia ha suscrito Acuerdos de Reconocimiento Mutuo con otros países para su programa de 
agentes económicos autorizados? si es así, ¿Cuáles han sido las medidas consideradas?  
Answer:  
The Malaysian Customs and Japan Customs are in the final stage of n egotiating the 
Authorised Economic Operator (AEO) MRA. The MRA will provide an arrangement or 
agreement to recognize each other 's audits, controls and authorizations as equivalent 
and therefore provide reciprocal benefits to AEOs.  WT/TPR/M/2 92/Add.1  
 
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  This means that AEOs of b oth administrations are recognised as being secure and 
reliable and will, therefore, be categorised as low risk and will be subject to less 
controls when importing into the customs territory.  
El párrafo 3.18 del Informe de la Secretaría señala que... "La cláusula 11 del Reglamento de 
Aduanas (normas sobre valoración) de 1999 faculta al Ministro de Hacienda para establecer el 
valor mínimo de las mercancías. Según las autoridades, esa cláusula nunca se ha aplicado. La 
Orden de Aduanas (valor de los vehículos automóviles importados totalmente montados (nuevos)) 
de 2006 faculta al Ministro de Hacienda para fijar, según proceda, el valor de esos vehículos de 
conformidad con el artículo 12 de la Ley de Aduanas de 1967, a fin de hacer frente a los casos de 
declarac ión de un valor inferior al real. Según las autoridades, durante el período examinado no se 
recurrió a esta opción, ya que el valor determinado en la Orden adopta la forma de un "valor 
publicado en la Gaceta Oficial" que se acepta como valor de transacción  en el caso de los 
importadores comerciales (titulares de permisos aprobados, secciones 3.2.3.2 y 4.6), mientras que 
en el caso de los importadores a título particular se aplican los métodos de valoración de la OMC. 
Los importadores comerciales deben prese ntar la información, incluido el valor de transacción de 
los vehículos automóviles totalmente montados, en la sección de valoración de las oficinas 
centrales de la Administración de Aduanas. Un comité compuesto por funcionarios del Ministerio de 
Hacienda, el Ministerio de Comercio Exterior e Industria y la Administración Real de Aduanas 
examina todos los documentos y precios presentados antes de recomendar al Ministro para su 
aprobación el "valor publicado en la Gaceta Oficial". Según las autoridades, el "s istema de precios 
publicados en la Gaceta Oficial" ayuda a determinar el valor aduanero de los vehículos imponibles 
y no es un obstáculo no arancelario. Las autoridades no han facilitado datos acerca de los casos de 
subfacturación/declaración de un valor i nferior al real desde 2010. " 
9. ¿Podría Malasia indicar si el importador del vehículo declara un valor inferior al publicado en la 
Gaceta Oficial, debe ajustar el valor al allí establecido? ó ¿Puede demostrar que ese fue el 
valor realmente pagado o por pagar?  
Answer:  
The Gazette Value is only meant for commercial importers. The commercial importer has 
to comply with the Gazette Value regardless of the value declared.  
The Gazette Value is provided based on application made by the commercial importers 
and the G azette Value is the transaction value.  
3.2.5. Normas y otros requisitos técnicos  
3.2.5.1.2 Certificación halal  
El párrafo 3.44 del informe de la Secretaría señala que… "Malasia ha elaborado una certificación 
halal, que responde al objetivo del Gobierno de convertir al país en un centro de producción de 
alimentos halal. En 2011, las autoridades introdujeron la primera norma del mundo sobre 
productos farmacéuticos halal. " 
10. ¿Qué productos farmacéuticos están incluidos en la norma sobre "productos farmacéuticos 
halal? ¿Si existe un listado exhaustivo, dónde se puede consultar?  
Answer:  
The requirement for halal pharmaceutical certification is on a voluntary basis as it is 
with any other halal certification schemes in the country. The halal pharmaceutical 
certifica tion scheme is limited to 3 categories; i.e. Over the Counter products (OTC), 
traditional medicines and health supplements.  
The Halal Certification Body in Malaysia is the Department of Islamic Development 
Malaysia, (JAKIM). Currently, the listing of hala l pharmaceuticals can be accessed online 
from the halal directory of Malaysia website :  
http://www.halal.gov.my/v3/index.php/ms/direktori -halal -malaysia . WT/TPR/M/2 92/Add.1  
 
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  11. ¿La certificación par a "productos farmacéuticos halal " aplica sólo para los productos 
farmacéuticos importados en Malasia?  
Answer:  
The halal pharmaceutical certification is applicable for both imported and local products. 
As the halal certification is voluntary, it is the prer ogative of the producer/manufacturer 
whether to apply for the halal certificate and halal logo/ mark.  
12. ¿Cuál es la entidad en Malasia que debe expedir el certificado para poder importar y 
comercializar en ese mercado "productos farmacéuticos halal "? 
Answer:  
Pharmaceuticals are required to be registered with the Drug Control Authority (DCA) 
before it is marketed in Malaysia. The National Pharmaceutical Control Bureau (NPCB), 
Ministry of Health Malaysia, acts as the secretariat to the Authority. As the secreta riat of 
DCA, NPCB regulates the importation and sale of pharmaceuticals including halal 
pharmaceuticals in Malaysia. Jabatan Kemajuan Islam Malaysia (JAKIM) will issue halal 
certification for products that have been registered with DCA.  
13. ¿Cuáles organismos de certificación halal en el extranjero son reconocidos por Malasia para 
"productos farmacéuticos halal?  
Answer:  
JAKIM recognizes a number of international halal certification bodies. Recognition is 
based on their compliance with JAKIM 's respective procedu res.  
The procedures can be accessed at:  
http://www.halal.gov.my/v3/images/stories /pdf/cb%20procedure28012014.pdf . 
The list of the recognized certifying bodies can be accessed at:  
http://www.halal.gov.my/v3/index.php/en/list -of-approved -islamic -bodies . 
14. ¿Malasia tiene estadísticas sobre el monto al que asciende el mercado de productos 
farmacéuticos halal en ese país?  
Answer:  
No. The overall development of the Halal industry in Malaysia is coordinated by the Halal 
Industry Development Corporation (HDC). Stati stics of various halal certified industrial 
initiati ves in Malaysia is available at:  
http://www.hdcglobal.com/publisher/gwm_industry_statistics . 
4 POLÍTICAS COMERCIALES, POR SECTOR ES 
4.2 Agricultura y ganadería  
En el párrafo 4.11 del informe de la Secretaría indica que… "De conformidad con el Programa de 
Transformación Económica 2010 , el principal objetivo de las esferas económicas clave para el país 
en lo que respecta a la agricul tura es también desplazar el centro de atención de este sector hacia 
las agroindustrias. Su estrategia de transformación abarca cuatro cuestiones fundamentales: 
aprovechamiento de las ventajas competitivas; explotación de mercados de alta calidad; 
adecuaci ón de los objetivos de seguridad alimentaria al aumento del INB; y participación en la 
cadena de valor agrícola regional. En el marco del Programa se han identificado varios proyectos 
de "puerta de entrada" como industrias de gran repercusión que pueden im pulsar el crecimiento 
del sector agrícola. Entre ellos figuran 9 proyectos de la esfera económica clave del aceite de 
palma y el caucho y 16 de la esfera económica clave de la agricultura (hierbas, cultivos 
alimentarios, ganadería y pesca). " WT/TPR/M/2 92/Add.1  
 
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  15. ¿Agradecemos al Gobierno de Malasia nos pueda brindar información detallada sobre el 
objetivo de los proyectos de palma y caucho, recursos asignados y resultados alcanzados en 
cada uno de ellos?  
Answer:  
The objective of developing palm oil and rubber industries is to i ncrease the income of 
smallholders as well as to develop and promote the growth of downstream industries.  
One of activities involves a replanting program to replace low -yield trees with high -yield 
seedlings. In addition, Malaysia is continuously trying to  increase productivity such as 
increasing the oil extraction rate of palm oil.  
Other than that, Malaysia is also researching on various new applications of palm -based 
products in the food and health industries. Malaysia is also looking into the 
commercial izing of new rubber products such as environmental friendly rubber, 
Ekoprena.  
More information on Palm Oil and Rubber NKEA can be found at :  
 http://etp.pemandu.gov.my/Pal m_Oil -@-Palm_Oil_ -%E2%97%98 -Rubber.aspx . 
4.2.5 Arroz  
El párrafo 4.20 del informe de la Secretaría señala que… "El arroz sigue sujeto a un tipo 
arancelario relativamente elevado pero aparentemente no aplicable, del 40% (excepto en el caso 
del arroz partido  para la alimentación animal, sujeto a un tipo del 15%), al estar las importaciones 
libres de derechos hasta 2015, así como a licencias de importación/exportación no automáticas y a 
las operaciones de comercio de Estado de BERNAS (secciones 3.2.3.1, 3.2.7 y 3.3.2). En 2013, 
existían seis tipos de subvenciones e incentivos: incentivo a la producción de arroz paddy (563 
millones de ringgit); subvención al precio del arroz (528 millones de ringgit); subvención al precio 
del arroz paddy (480 millones de ringgit ); subvención a los abonos para el arroz paddy (465 
millones de ringgit); incentivo a las semillas de arroz paddy certificadas (85 millones de ringgit); e 
incentivo para el aumento del rendimiento (80 millones de ringgit). Con arreglo al sistema del 
precio  mínimo garantizado, BERNAS se compromete a comprar arroz paddy a los agricultores a un 
precio no inferior al mínimo garantizado, si el precio de mercado es más bajo que éste, 
actualmente 750 ringgit por tonelada (el mismo que en 2009) para el grano largo y el grano 
medio. Con arreglo al programa de subvención de los precios del arroz paddy, el Gobierno paga a 
los agricultores cantidades (actualmente 248,10 ringgit por tonelada (lo mismo que en 2009)) por 
el arroz paddy que venden a cualquier molino comerci al. Esta subvención, principal componente 
del gasto global en concepto de ayuda a la agricultura (cuadro 4.2, secciones 3.4.2.2 y 4.2.4), se 
añade al precio recibido por el arroz paddy. El Gobierno también mantiene controles de los precios 
y de la oferta p ara ciertos tipos de arroz que consume la población con ingresos más bajos: es 
decir, se establecen precios máximos para el arroz de calidad inferior (sección 3.4.4.2). BERNAS 
mantiene asimismo las existencias nacionales de arroz en nombre del Gobierno en 292.000 
toneladas. El derecho exclusivo de BERNAS a importar arroz se ha prorrogado hasta 2021 y, como 
comprador en régimen de monopsonio, BERNAS suele tener poder de mercado para negociar 
precios más bajos con sus proveedores. Según las autoridades, para importar arroz, BERNAS 
utiliza un sistema de compra transparente con licitaciones públicas. El precio al por menor del 
arroz no está regulado por BERNAS sino por la Sección de Control del Arroz Paddy y Otros Tipos de 
Arroz del Ministerio de Agricultura e I ndustria Agroalimentaria. " 
16. Nos gustaría saber, ¿cómo funciona el mecanismo de licitaciones públicas para importar arroz 
y la normativa que lo regula?, y, obtener información detallada de la forma como la Sección de 
Control de Arroz Paddy y Otros Tipo del A rroz del Ministerio de Agricultura e Industria 
Agroalimentaria regula los precios al por menor del arroz?  
Answer:  
Malaysia does not implement any public tenders to import rice. Retail prices of rice is 
regulated under the Essential (Control of Supply of Ri ce) Regulations 1974, Rice (Grade WT/TPR/M/2 92/Add.1  
 
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  and Price Control) Order (Amendment) 2008 [P.U.(A) 173, P.U.(A) 174, P.U.(A) 421 and 
P.U.(A) 422].  
The mechanism and regulations governing rice, can be simplified as follows:  
1. Government will compare the forecast of the  local paddy/rice production, rice stock 
level against rice consumption requirement;  
2. Determine the level of import required;  
3. Communicate the import requirement to BERNAS;  
4. BERNAS will monitor season and price offered by various exporting countri es;  
5. BERNAS will call for quotation and sample from reputable suppliers and authorized 
exporters;  
6. BERNAS will evaluate various factors such as price, supply availability, delivery 
period, payment terms, etc. before awarding and signing  the contract;   
7. BERNAS will make the shipping arrangement from Port of loading until Port of 
discharge following the custom procedure and MOA approval; and  
8. Rice is delivered to warehouses all over Malaysia for stockpile and trading purposes.  
4.3 Pesca  
El párrafo 4 .23 del informe de la Secretaría indica que... ""Las políticas están orientadas a 
mantener el rendimiento máximo sostenible. Entre las medidas encaminadas a controlar la pesca 
figuran la vigilancia constante de la situación de los recursos, la limitación d irecta de la pesca y 
una limitación directa de la expedición de licencias de pesca nuevas o adicionales para faenar en 
aguas costeras, a fin de garantizar que no haya sobreexplotación. Al parecer, sólo se expiden 
licencias de pesca para embarcaciones pesqu eras locales. Con arreglo a la Ley de Pesca de 1985, 
sólo se expiden licencias de pesca para embarcaciones pesqueras locales; hasta la fecha, no ha 
habido ninguna inversión extranjera en las actividades pesqueras de altura y de bajura en Malasia. 
En virtud  de esa misma Ley, la pesca en aguas malasias por embarcaciones pesqueras extranjeras 
está sujeta a acuerdos internacionales de pesca entre los gobiernos de Malasia y el país de que se 
trate. El Departamento de Pesca puede expedir permisos de pesca para em barcaciones extranjeras 
con arreglo a las condiciones de los "acuerdos de acceso" firmados entre Malasia y los respectivos 
gobiernos extranjeros. Hasta el momento, Malasia no ha concluido ningún acuerdo internacional de 
pesca. " 
17. ¿Nos gustaría  saber si el Go bierno de Malasia piensa en un futuro cercano  cambiar esta 
política? De ser la respuesta negativa a la pregunta, explicar las razones para no hacerlo.  
Answer:  
Currently Malaysia does not have any plans to change the policy and we want to 
preserve our limit ed fishing resources.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM COSTA  RICA  
PARTE I: PREGUNTAS EN RELACIÓN CON EL INFORME DE LA SECRETARÍA  
Página 16 (Párrafo 1.4)  
Un reciente análisis de la ventaja comparativa manifiesta muestra que la competitividad de Malasia 
está desplazándose de  los productos eléctricos y electrónicos a los productos elaborados y el gas 
natural. La participación de Malasia en las cadenas de valor mundiales es muy elevada en 
comparación con otras de las principales economías exportadoras, y el valor añadido nacion al 
incorporado en las exportaciones ha aumentado considerablemente (secciones 2.3 y 4.6).  
Pregunta : 
1. ¿Cuáles son las políticas internas que ha implementado Malasia para aumentar la participación 
del país en las cadenas globales de valor?  
Answer:  
Among the policies that Malaysia has implemented to increase the country 's 
participation in the global value chains (GVCs) are:  
i. Trade policy:  
 45 services subsectors were liberalised during this period under review.  
Liberalisation along with upgrading the quantity a nd quality of services are 
expected to enhance the competitiveness of manufacturing companies and 
services suppliers; and  
 Malaysia continues to enhance market access through FTAs and trade 
promotions.  
ii. Investment policy:  
 Recognising that the whole process  of producing goods, from raw materials to 
finished products, is increasingly carried out wherever the necessary skills and 
materials are available at competitive cost and quality, the Government focuses 
on high -quality FDI and DDI which could have strong backward and forward 
linkages in specific sections of GVCs that are deemed high value -adds;  
 Promoting high value -added and high technology activities such as 
biotechnology, renewable energy, pharmaceuticals and medical devices 
contributes to the export mar ket of merchandise;  
 Stimulating investment in innovation and intellectual capital, such as design, 
R&D and new business models, helps firms move up the value chain and tap 
into the GVCs. In this regard, the country has launched a National Innovation 
Strat egy to create wealth through knowledge, technology and innovation; and  
 The SME Masterplan 2012 -2020, through its initiatives that deal with innovation 
and productivity accelerates SME growth, hence gaining international exposure 
and tapping into GVCs.  
iii. Development policy:  
 To become integrated in international production networks, Malaysia keeps 
improving measures at the border as well as 'behind the border ' including in 
areas such as innovation, skills and infrastructure; and  WT/TPR/M/2 92/Add.1  
 
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   To enhance the business environ ment, productivity and competitiveness, 
initiatives such as PEMUDAH, the public -private partnership that identifies 
bottlenecks, proposes resolutions and seeks timely and transparent ways of 
enhancing public sector service delivery, and private sector effi ciency, are set 
up. This helps create and sustain a business -friendly environment, making 
Malaysia a globally benchmarked preferred place to do business. As a result, 
Malaysia is ranked 6th in the Ease of Doing Business 2014 Report by the World 
Bank and 5th for Trading Across Borders.  
Página 26 (párrafo 1.26)  
Gracias a las medidas adoptadas por el Gobierno para promover las inversiones extranjeras 
directas (IED) en el sector de los servicios (secciones 2.3, 2.4, 2.5 y 4.7), entre 2009 y 2012 las 
entradas d e IED alcanzaron un máximo de 12.200 millones de dólares EE.UU. en 2011 y se 
redujeron a 10.100 millones de dólares EE.UU. en 2012 debido a la incertidumbre de las 
perspectivas económicas mundiales y la pérdida del atractivo de Malasia como base de las 
industrias de alta intensidad de mano de obra.50 Por consecuencia, la participación de Malasia en 
las entradas totales de IED en Asia aumentó del 0,5% al 2,5% (2012).51 Entre 2008 y 2012, su 
volumen de IED aumentó un 58,8% principalmente en las actividades ma nufactureras y de 
servicios (gráfico 1.3). La UE y Singapur siguen siendo las principales fuentes de IED, seguidos por 
el Japón y los Estados Unidos. En 2013, Malasia se situó en el 16º lugar (19º en 2012) entre las 
principales economías que podrían acoger  corporaciones transnacionales. Se espera que los 
nuevos planes de flexibilización de las restricciones a la propiedad extranjera en 2012 -2016 y los 
progresos en las negociaciones del Acuerdo de Asociación Transpacífico (sección 2.4.2.1) 
contribuyan, entre  otras cosas, al aumento de las entradas de IED y ayuden, así, al país a alcanzar 
su objetivo declarado de adquirir la condición de economía avanzada para 2020. Se esperaba que 
en 2013 se mantuviera el nivel de IED gracias al aumento de las entradas en rel ación con el año 
anterior; en el primer semestre de 2013 las IED se habían destinado en su mayor parte a los 
sectores de las manufacturas (el 44% de las entradas netas totales) y del petróleo y el gas (30%), 
mientras que el sector de los servicios financie ros (18%) también siguió recibiendo entradas 
considerables de IED.  
Pregunta:  
2. ¿Cuáles medidas de flexibilización de restricciones está considerando Malasia para aumentar 
los flujos de IED?  
Answer:  
FDIs have assumed an important role in Malaysia 's industrial  and economic development 
over the last four decades. FDIs have a positive impact on the economy in terms of 
contribution to GDP growth, trade and balance of payments, capital formation, 
employment, productivity and efficiency. There are spill over effects  such as spin -offs, 
transfer of technology, establishment of new domestic companies, expansion of 
supporting industries, collaboration programmes with local companies and institutions 
of higher learning (both private and public), development of services su b-sectors as well 
as benefits to utility providers.  
In view of the importance of FDIs, the Government will continue with its efforts to 
promote the inflow of FDIs into the manufacturing and the services sectors. There are 
currently no equity restrictions i n the manufacturing sector, except in certain strategic 
sectors of national interest. Malaysia no longer promotes FDI into labour -intensive 
industries. Instead, the country is concentrating on the development of high value -
added, technology -intensive, capi tal-intensive and knowledge -based industries which 
require the inflow of foreign technology and expertise. The Government is also 
promoting new growth areas which require the inflow of FDI, which include aerospace; 
advanced electronics; advanced materials;  fine chemicals; renewable energy; optics and 
photonics; display technology (TFT, LCD, Plasma); petrochemical; pharmaceutical; 
machinery and equipment; and medical devices.  WT/TPR/M/2 92/Add.1  
 
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  FDIs will continue to be important in complementing domestic investments, so as to 
enable Malaysia achieve the status of developed nation by 2020.  
Página 55 (párrafo 3.39)  
La Ley de Salvaguardias de 2006 fue modificada a mediados de 2012 en cumplimiento de 
compromisos contraídos por Malasia en el marco de ALC bilaterales o regionales, y  entró en vigor 
el 1º de septiembre de 2013. El Reglamento de Salvaguardias de 2007 no ha sufrido cambios 
desde el anterior examen de las políticas comerciales de Malasia. Malasia promulgó el Reglamento 
de Salvaguardias de 2013 (Acuerdo sobre el Comercio d e Mercancías del Acuerdo Marco sobre 
Cooperación Económica Global entre la Asociación de Naciones del Asia Sudoriental y China 
(medidas de salvaguardia)), que entró en vigor el 2 de septiembre de 2013. Malasia inició su 
primera investigación sobre salvagua rdias, en relación con las importaciones de productos 
laminados en caliente, enrollados, el 1º de mayo de 2011; la investigación concluyó el 22 de 
agosto de 2011 sin imposición de medidas.  
Preguntas : 
3. ¿En qué consisten las modificaciones realizadas a la Ley  de Salvaguardias de 2006, la cual fue 
modificada a mediados de 2012 y que entró en vigor el 1º de septiembre de 2013?  
Answer : 
The Safeguards Act 2006 was amended to allow Bilateral Safeguards to be invoked 
based on the provisions in bilateral or regional Free Trade Agreements as provided 
under Section 40A of the Safeguards Act (Amendment) 2012.  
Preguntas : 
4. Se indica que el Reglamento de Salvaguardias de 2007 no ha sufrido cambios desde el anterior 
examen de las políticas comerciales de Malasia. No obstante,  más adelante se indica que 
Malasia promulgó el Reglamento de Salvaguardias de 2013, el cual entró en vigor el 2 de 
setiembre de 2013. ¿Cuál es la diferencia entre ambos reglamentos? ¿Actualmente ambos se 
encuentran vigentes?  
Answer:  
To date, there are no amendments made to the Safeguards Regulations 2007. The 
Regulation which came into force on 2 September 2013 is a separate subsidiary 
legislation enacted for the purpose of Section 40A of the Safeguards Act (Amendment) 
2012 i.e. the Safeguards (Agreement o n Trade in Goods of the Framework Agreement on 
Comprehensive Economic Cooperation between the Southeast Asian Nations and China 
[Safeguard Measure]) Regulations 2013.  
Página 55 (párrafo 3.39)  
La Ley de Salvaguardias de 2006 fue modificada a mediados de 201 2 en cumplimiento de 
compromisos contraídos por Malasia en el marco de ALC bilaterales o regionales, y entró en vigor 
el 1º de septiembre de 2013. El Reglamento de Salvaguardias de 2007 no ha sufrido cambios 
desde el anterior examen de las políticas comerc iales de Malasia. Malasia promulgó el Reglamento 
de Salvaguardias de 2013 (Acuerdo sobre el Comercio de Mercancías del Acuerdo Marco sobre 
Cooperación Económica Global entre la Asociación de Naciones del Asia Sudoriental y China 
(medidas de salvaguardia)),  que entró en vigor el 2 de septiembre de 2013. Malasia inició su 
primera investigación sobre salvaguardias, en relación con las importaciones de productos 
laminados en caliente, enrollados, el 1º de mayo de 2011; la investigación concluyó el 22 de 
agosto de 2011 sin imposición de medidas.  
Preguntas : 
5. ¿En qué consisten las modificaciones realizadas a la Ley de Salvaguardias de 2006, la cual fue 
modificada a mediados de 2012 y que entró en vigor el 1º de septiembre de 2013?  WT/TPR/M/2 92/Add.1  
 
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  Answer:  
Currently,  there  is no plan to introduce  any amendment  to the Competition  Act 2010  or 
any other  bill that seeks  to govern  merger  control  provisions.  
Preguntas:  
6. Se indica que la Ley de 2010 no aplica, entre otros, a los servicios que tengan carácter de 
monopolio generador de ingreso s. ¿Podrían aclarar qué se entiende por "monopolio generador 
de ingresos "? 
Answer :  
The Competition Act 2010 (CA 2010) does not apply to an enterprise entrusted with the 
operation of a service that is of general economic interest or having the character of  a 
revenue -producing monopoly.  
The CA 2010 does not define the phrase 'service of general economic interest ' or SGEI. 
Generally, SGEI are services, where the state is of the view, that an enterprise should 
provide in all circumstances, regardless whether t here is an incentive for it to do so.  
There are certain circumstances where an enterprise is granted an exclusive right to 
provide the SGEI, thus becoming the monopoly provider of the service. Exclusion from 
the CA 2010 must be allowed as it is necessary for the performance of the SGEI.  
Página 115 (párrafo 4.57)  
Durante el período objeto de examen, los productores de automóviles malasios siguieron 
protegidos de la competencia extranjera con medidas arancelarias y no arancelarias, y se 
beneficiaron de medid as de ayuda interna que permitían que en el mercado predominaran los 
automóviles fabricados en el país .  
Preguntas : 
7. ¿Qué tipo de medidas no arancelarias se les aplican a los automóviles importados?  
Answer:  
Imported cars are subject to obtaining an Approved Permit (AP) which is issued under 
Customs (Prohibition of Imports Order) 2012.  
Preguntas : 
8. En términos generales, ¿cuál es el diferencial de precio entre un automóvil producido a nivel 
local y el importado?  
Answer:  
The prices of vehicles are determined by t he manufacturers/assemblers based on 
various factors. The Government has no control over the determining of prices for 
vehicles.  
Preguntas : 
9. ¿Existen impuestos internos tales como el de selectivo al consumo o bienes de lujo para los 
automóviles? Si existier an, ¿cuál es la tasa impositiva?  WT/TPR/M/2 92/Add.1  
 
- 61 - 
 
  Answer:  
The Malaysia' s automotive tax structure consists of import duty, excise duty and sales 
tax. There are no selective consumption goods or luxury car taxes.  
Página 118 (párrafo 4.62)  
En 2012, el Gobierno inició la elim inación parcial o total de dichas restricciones en 17 subsectores 
de servicios, comprendidos en 6 sectores (servicios profesionales; servicios de comunicaciones;  
servicios de distribución; servicios de enseñanza; servicios relacionados con el medio ambient e; y 
servicios sociales y de salud), y formalizó el statu quo en materia de acceso a los mercados de los 
servicios de contabilidad, en los que ya se permitía una participación de capital extranjero del 
100% (recuadro 4.1).  
Preguntas:  
10. ¿En el caso de elimina ción parcial de restricciones en los subsectores cubiertos, tiene Malasia 
planes de realizar posteriores liberalizaciones?  
11. En caso afirmativo, ¿podría Malasia explicar más detalladamente esos planes y los plazos 
previstos?  
Answer:  
Malaysia 's liberalisatio n of the services sector will continue to be undertaken in a 
progressive and balanced manner in line with economic and social development policies 
and strategies.  
PARTE II: PREGUNTAS EN RELACIÓN CON EL INFORME DEL GOBIERNO  
Página 4 (Párrafo 1.15)  
Para alc anzar los objetivos del programa Visión 2020, el 30 de marzo de 2010 el Gobierno puso en 
marcha el Nuevo Modelo Económico que comprende cuatro pilares fundamentales: el Programa de 
transformación Económica, el Programa de Transformación Gubernamental, el c oncepto 
"1Malaysia, People First, Performance Now" y el 10º Plan de Malasia 2011 -2015. El objetivo de los 
cuatro pilares de la transformación nacional es dar un impulso que haga de Malasia una nación de 
ingresos elevados que sea integradora y sostenible.  
Pregunta : 
12. ¿Cuál es la expectativa de crecimiento económico del gobierno de Malasia una vez que estos 
programas estén implementados plenamente?  
Answer :  
Malaysia is expected to achieve an average annual growth of arou nd 5 – 5.5 per cent 
from 2014 –2020.   WT/TPR/M/2 92/Add.1  
 
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  QUESTION S FROM  HONG KONG , CHINA  
Page 104 (Para. 4.64)  
We noted that the Malaysian Government has embarked on a study to formulate a Services 
Sector Blueprint which will serve as an input into the 11th Malaysia Plan (2015 to 2020). The 
Services Sector Blueprin t will focus on developing more knowledge -intensive and higher -value -
added sectors through reforms to targeted services sectors and the acceleration of 
internationalisation of services providers. An action plan is also being prepared.  
Please share with us on the details and the latest development of the study, the blueprint and 
the action plan. Is promotion of foreign investment included in the study, the blueprint and the 
action plan? Which services sectors are "targeted " in the blueprint?   
Answer:  
The Services Sector Blueprint  provides policy direction and strategies to accelerate  the 
growth of the services sector.  It focusses on the growth quality as well as the shift 
towards more knowledge -intensive and higher value added services sector. In 
addition, at tention is also given on enhancing productivity and export growth of the 
sector. Recommendations from the Blueprint will support Malaysia 's aspiration to 
become a high -income nation by 2020.   
Para 4.70  
Has the Malaysian authorities referred to any internat ional practices or standards in formulating 
the factors? Noting that the participation of Malaysians is one of the factors to determine the 
best interest of Malaysia, is there any new policy that encourages foreign investments since the 
implementation of t he FSA and IFSA?  
Answer:  
With the enactment of the Financial Services Act 2013 and Islamic Financial Services 
Act 2013, Malaysia no longer has specific quotas on new licenses and hard foreign 
equity limits in banks and insurance companies. All applications  for new licenses and 
acquisition of interest in shares in financial institutions are now assessed having 
regard to prudential  factors and whether the application will be in the best interest of 
Malaysia (BIOM).  
The BIOM considerations are similar to forei gn investment practices that we have 
observed in other member countries. Laws governing banks in other member countries 
also allow the authority to consider the best interests of the financial system in 
assessing an application to incorporate a new bank.  
Malaysia welcomes new investors that can add value to the financial sector through 
their impact on the level and nature of activity in Malaysia or in contributing towards 
Malaysia 's international trade and investment linkages. The Financial Sector Blueprint  
2011 -2020 further highlights areas where Malaysia envisions the contribution of new 
players with specialised expertise such as risk -capital financing, large and long -term 
financing, and medical and health insurance. In addition, there are currently severa l 
ongoing negotiations for the acquisition of majority/significant stake in licensed 
financial institutions by foreign investors.  
Page 112 (Para. 4.94)  
The Secretariat Report mentioned that the Malaysian Government maintains a strong presence in 
the teleco mmunications sector. Telekom Malaysia, the former government division for 
telecommunication services, dominates the fixed -line sector with a market share of 95%. TIME 
dotcom Berhad (TIME), which is 100% owned by the government, provides wholesale bandwidth  
and operates the Cross Peninsular Cable System.  WT/TPR/M/2 92/Add.1  
 
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  Is there any plan for  the Malaysian Government  to liberalize the telecommunication services by 
reducing its shareholding in government -linked companies?   
Answers:  
The decision  to increase or decrease the sha reholding in GLC is left to the GLC.   
Page 112 (Para. 4.96)  
In order to operate in Malaysia, telecommunications companies must obtain one of the following 
three licences: (a) Network Facilities Provider Licence (NFP); (b) Network Service Provider 
Licence ( NSP); or (c) Applications Service Provider Licence (ASP). With each of these licence 
categories, two types of licences, namely "individual licences " and "class licences ", are granted 
subject to the need for regulatory control. If applicants can meet all th e licensing conditions, 
provide a sound business plan and be in line with national policy objectives and interests, 
licences are generally approved.  
How long does it take for an application in general? Is there any quota for each type of licence? 
Is there any mechanism for an unsuccessful applicant to appeal or ratify?  
Answers:  
For individual licences, where the application and documentation furnished is 
complete, the regulator makes a recommendation to the Minister within 60 days. If the 
Minister neither g rants nor refuses to grant an individual licence within thirty days 
from the receipt of the recommendation from MCMC, the Minister is deemed, at the end 
of the period, to have refused to grant the individual licences unless the applicant 
receives a written  notice approving the individual licence after the period. This is 
articulated in s.27 -s.32 of the Communications and Multimedia Act . 
There is no  quota for each type of licence. Unsuccessful Applicants are welcomed to 
reapply with the same terms and conditi ons. 
Page  117, Para. 4.120  
All of Malaysia 's main commercial port terminals are owned and regulated by federal/state 
statutory corporations. Port operations have been extensively contracted out to the private 
sector. Maximum foreign ownership in port opera tors is 49%.  
What is the percentage of ports operated by the private sector? On foreign equity participation, 
we note from Table A4.4 that less than half of the federally -owned ports have foreign equity 
participation, and none in state -owned ports. Are the re any restrictions leading to the absence of 
foreign equity participation in state -owned ports? Is there any plan to contract out the port 
operations which are still run by the authorities?   
Answer:  
All 8 Federal port operations run by private companies.  
Currently there is no plan to contract out the port operations that are still run by State 
authorities.   WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM ECUAD OR  
Informe de la Secretaría: documento WT/TPR/S/292  
Página 10, párrafo 14 del resumen: "Una parte considerable de las líneas aran celarias de Malasia 
sigue estando sujeta a licencias de importación que en su mayoría no son automáticas y continúan 
utilizándose como un instrumento de política comercial e industrial, entre otros objetivos, para 
regular el flujo de las importaciones y fo mentar determinados sectores estratégicos ". Podría 
explicarnos Malasia ¿cómo esta medida es consistente con el GATT de 1994 qué disposiciones 
sustantivas de la normativa multilateral justifican la aplicación de estas licencias no automáticas?  
Answer : 
Malay sia has progressively reduced import licensing requirement to facilitate trade and 
industry. Malaysia will continue to study and conduct consultations with the industries 
on future elimination of import licensing requirements taking into consideration nati onal 
socio -economic and security.  
Páginas 11 y 12, párrafo 21, resumen, en relación a lo siguiente:  
"Malasia sigue otorgando un volumen creciente de ayuda a productos específicos (por ejemplo, en 
forma de sostenimiento de los precios del arroz paddy) y ayu da general (por ejemplo, mediante 
subvenciones a los abonos y préstamos en condiciones favorables), centrada principalmente en 
actividades relacionadas con el arroz ". Una medida de sostenimiento de los precios está 
considerada como una subvención de compar timiento ámbar que distorsiona la producción y el 
comercio. En su última notificación sobre medidas de ayuda interna, de 10 de agosto de 2009, 
correspondiente a los años civiles de 1999 a 2007, Malasia no notificó medidas ubicadas en el 
compartimiento ámba r. Según su Lista de Concesiones anexa a la OMC, Malasia no tendría 
compromisos en esta materia.  
Sobre la base de lo expuesto, podría explicarnos Malasia bajo qué disposiciones de la normativa 
multilateral justificaría su "ayuda a productos específicos (po r ejemplo en forma de sostenimiento 
de los precios del arroz paddy "? 
Answer : 
As with all other Asian countries, rice is staple for Malaysia and important for our food 
security. Rice is also grown by small farmers with an average farm size of only one 
hecta re. They are also among the poorest in the country. Programs in the rice industry 
are thus aimed at addressing these socio -economic and national security issues. In 
2008, the food and fuel crisis had resulted in a number of rice exporting countries which 
Malaysia sources its rice from, to unilaterally restrict their exports of rice. This left 
Malaysia in a precarious position resulting in spiralling domestic rice prices and potential 
social discontent.  
Malaysia imported more than one million tons of rice a nnually valued at about RM2 
billion to meet its domestic needs. Rice can be easily exported to Malaysia and we 
welcome interested exporters to diversify our rice -source base. As such, fundamentally, 
these programs do not as much distort international trade  and is undertaken mainly to 
address issues of poor farmers, rural development and food security, the essential 
requisites for a developing economy like Malaysia to move upwards in economic 
development.  
Página 32. párrafo 2.15  
¿Las notificaciones pendient es que tiene Malasia con la OMC tienen una fecha límite o un plazo 
máximo a cumplir o ha solicitado una prórroga?  WT/TPR/M/2 92/Add.1  
 
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  Answer : 
Malaysia is committed to fulfill its obligations under all WTO Agreements and will continue to take 
measures to meet notification obli gations.  
Página 34. párrafo 2.21  
¿Podría informarnos Malasia las razones por la cuáles --- ha presentado su lista con la oferta final 
para aplicar el Acuerdo sobre Aranceles Preferenciales del Grupo de Ocho Países en Desarrollo?  
Answer : 
Malaysia has signe d and ratified the Developing Eight Preferential Arrangement (D8 -PTA). 
However, the arrangement has yet to be enforced due to insufficient number of ratification by 
other members.  
Página 41, párrafo 3.3 del Capítulo 3  
"Políticas y prácticas comerciales, por medidas. En relación a la utilización del sistema de precios 
publicado en la Gaceta Oficial para determinar el valor en aduana de los vehículos nuevos. Podría 
informarnos Malasia cuál es la función del sistema de precios publicados en la Gaceta Oficial  en la 
determinación en aduana del valor de los vehículos importados, cómo este sistema se ajusta a las 
disposiciones del Acuerdo sobre Valoración en Aduana de la OMC.  
Answer : 
Customs Gazetted Value is derived on the basis of the hierarchy order of the WTO  
Valuation Rules and the objective is to provide guidelines to customs as well as provides 
transparency and consistency to the importers.  
Página 41, párrafo 3.4 del Capítulo 3  
"Políticas y prácticas comerciales, por medidas. Referente a que "también sigue  vigente el régimen 
de licencias de importación mediante "permisos aprobados", que se aplica a la importación y 
distribución de automóviles, camiones y motocicletas fabricados o montados en el extranjero ". 
Partiendo de que este régimen de licencias de impo rtación "permisos aprobados " cubriría el tema 
de la distribución de los vehículos importados, podría indicarnos Malasia si para los vehículos 
fabricados en el país se aplica un requisito similar o permiso para la distribución de los mismos.  
Answer : 
The Gov ernment will undertake an in -depth and comprehensive study on the impacts of AP 
termination.  
Página 41, párrafo 3.5 del Capítulo 3 "Políticas y prácticas comerciales por medidas. En 
lo referente a:  
a) "las exportaciones de bienes esenciales sujetos a control de precios (es decir, la harina de 
trigo, el diesel, la gasolina RON95, el gas licuado de petróleo, el azúcar y el aceite de 
cocina), cuatro de las cuales reciben subvenciones, están prohibidas a menos que se 
disponga de una autorización ". Podría indicarno s ¿cómo se asegura que las exportaciones 
de estos bienes subvencionados, cuando sean autorizadas, se ajusten a los compromisos 
de Malasia en materia de subvenciones a las exportaciones?  
b) "Pueden otorgarse ayudas a las exportaciones de determinadas frutas y frutos frescos y 
secos, flores frescas y secas, plantas y peces ornamentales, y manufacturas, en forma de 
exenciones del impuesto sobre la renta imponible, comprendidas entre el 10% y el 50% 
del valor del incremento de las exportaciones, dependiendo, entre  otros factores, de la 
actividad, el valor añadido y/o la estructura del capital ". ¿Podría explicarnos Malasia cómo 
esta medida se ajusta a sus compromisos en materia de subvenciones a las exportaciones 
que, al parecer según se entiende con este párrafo, e starían determinadas a un WT/TPR/M/2 92/Add.1  
 
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  incremento de las exportaciones de estos productos para beneficiarse de una exoneración 
del impuesto sobre la renta imponible?  
Answer : 
a) Restriction of export on these products is mainly for price stability, food security and 
safety  reasons.  
b) The incentives are  part of the initiatives to encourage Malaysian companies to be 
more active in international trade  and adding greater value to the products. The 
objective is to encourage local companies particularly SMEs to move up the value 
chain.  
Página 45, párrafo 3.18 del Capítulo 3 "Políticas y prácticas comerciales por medidas. En 
lo referente a:  
"Según las autoridades, durante el período examinado no se recurrió a esta opción, ya que el valor 
determinado en la Orden adopta la forma de un  "valor publicado en la Gaceta Oficial" que se 
acepta como valor de transacción en el caso de los importadores comerciales (titulares de 
permisos aprobados, secciones 3.2.3.2 y 4.6), mientras que en el caso de los importadores a título 
particular se aplica n los métodos de valoración de la OMC. Los importadores comerciales deben 
presentar la información, incluido el valor de transacción de los vehículos automóviles totalmente 
montados, en la sección de valoración de las oficinas centrales de la Administració n de Aduanas. 
Un comité compuesto por funcionarios del Ministerio de Hacienda, el Ministerio de Comercio 
Exterior e Industria y la Administración Real de Aduanas examina todos los documentos y precios 
presentados antes de recomendar al Ministro para su apr obación el "valor publicado en la Gaceta 
Oficial". " 
Podría indicar Malasia:  
a)  La razón de utilizar sólo para los importadores comerciales el "valor publicado en la Gaceta 
Oficial" (aceptándolo como valor de transacción) y para los importadores a título part icular 
los métodos de valoración de la OMC, en cuanto a la fijación del valor de un vehículo?  
b)  Bajo qué disposiciones del Acuerdo sobre Valoración de Aduana se justifica la utilización 
del valor publicado en la Gaceta Oficial como valor de transacción, cua ndo un precio de 
transacción es, conforme la normativa pertinente, el valor pagado o por pagar por las 
mercancías cuando se venden para su exportación?  
c)  ¿Qué criterios utiliza el comité de funcionarios del Ministerio de Hacienda, el Ministerio de 
Comercio Exterior e Industria y la Administración Real de Aduanas, en el análisis de 
documentos, para recomendar al Ministro la aprobación del "valor publicado en la Gaceta 
Oficial"? ¿Esto se hace por cada importación de vehículos?  
Answer : 
All the articles of the W TO Agreement on Customs Valuation were considered in the 
Customs (Rules of Valuation) Regulation 1999. The value fixed under Section 12 of the 
Customs Act 1967 is based on the proposal by the Panel. The Panel will review all the 
relevant importation docume nts and data or information which is available in Malaysia. 
Customs value will be derived on the basis of a hierarchy order of valuation rules as 
follows:  
a) Transaction value or Transaction value plus adjustment under regulation 4 and 5;  
b) The transaction valu e of identical goods under regulation 6;  
c) The transaction value of similar goods under regulation 7;  
d) The deductive value of the imported goods under regulation 8;  WT/TPR/M/2 92/Add.1  
 
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  e) The computed value of the imported goods under regulation 9 (not applicable in the 
cases of im ported CBU cars); and  
f) Flexible valuation allowed.  
The valuation rules are consistent with WTO as it provides transparency and consistency 
to the importers.  
Página 53, párrafo 3.32 del Capítulo 3  
"Políticas y prácticas comerciales por medidas. Respecto a q ue las importaciones que, al mes de 
marzo de 2013, estaban sujetas a licencias clasificadas en función del destino nacional de las 
mercancías. Podría explicarnos Malasia los motivos por los cuales se realizó este tipo de 
clasificación de licencias, y que v inculación tiene esta medida con su "objetivo de política comercial 
e industrial, de regular el flujo de las importaciones y fomentar determinados sectores 
estratégicos " (párrafo 14, página 10 resumen).  
Answer : 
Malaysia has progressively reduced import lic ensing requirement to facilitate trade and 
industry. Malaysia will continue to study and conduct consultations with the industries 
on future elimination of import licensing requirements taking into consideration national 
socio -economic and security.  
Página  62. párrafo 3.61  
¿Cuál es el nivel de desarrollo económico que necesita alcanzar Malasia para adherirse al Acuerdo 
sobre Contratación Pública de la OMC (ACP)?  
Answer : 
Malaysia will have to assess the readiness of its domestic industries to tap possible be nefits and its 
government agencies commitments to the obligations stipulated under the WTO GPA obligations. 
This exercise is crucial before a decision can be made for Malaysia to consider accessing to the 
GPA. 
Página 63. párrafo 3.64  
¿Qué ocurre con los co ntratos que son menores a 50,000 ringgit?  
Answer : 
Ministries and agencies are allowed to purchase supplies and services up to RM 50,000 
directly from any known suppliers of goods or services who can offer goods or services 
at reasonable price and quality. The RM50,000 is the threshold level.  
Página 66. párrafo 3.73  
¿Por qué están prohibidos de exportación estos productos?  
Answer:  
Prohibition of export on these products is mainly for price stability, food security and 
safety reasons.  
Página 68, párrafo 3.78  del Capítulo 3 "Políticas y prácticas comerciales por medidas.  
En relación a: "Con arreglo a la Política Nacional para el Sector del Automóvil (sección 4.6), 
durante el período 2010 -2014 las empresas de este sector tienen derecho a obtener exenciones 
fiscales sobre su renta imponible equivalentes al 30% o al 50% del valor del incremento de sus WT/TPR/M/2 92/Add.1  
 
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  exportaciones, siempre que las mercancías exportadas tengan por lo menos un 30% o un 50% de 
valor añadido, respectivamente ". 
Podría informar Malasia:  
a)  ¿Cómo esta ex ención fiscal se ajusta a sus compromisos en materia de subvenciones, si al 
parecer esta exención se condicionaría a un porcentaje de incremento de sus 
exportaciones?  
b)  En cuanto al valor añadido, ¿la Política Nacional para el sector del Automóvil especific a el 
contenido nacional de dicho valor añadido?  
c)  Al ser las exenciones de la renta imponible, para las empresas del sector automotriz, 
equivalentes al 30% o 50% del valor del incremento de sus exportaciones, es posible o ha 
sucedido que los valores por con cepto de exención fiscal sean superiores al impuesto real 
que debe pagar esa empresa. ¿Cómo se procede en esos casos?  
Answer : 
The tax exemption on the value of increase exports of Vehicles and Parts/ Components which was 
introduced under NAP 2009 was howev er not implemented. The incentive is not continued under 
the NAP 2014.  
Página 71, párrafo 3.85 del Capítulo 3 "Políticas y prácticas comerciales por medidas  
En relación a: "Los propietarios particulares de taxis (desde 2012) y las empresas de alquiler de 
automóviles (desde 2002) están exentos de impuestos especiales de consumo para la compra de 
automóviles de fabricación nacional, mientras que los operadores turísticos se benefician de una 
reducción del 50% en la compra de automóviles con tracción en las cua tro ruedas montados en el 
país. Las autoridades indicaron que esta medida estaba destinada en parte a reducir el costo del 
alquiler de automóviles a turistas y estimular la actividad turística (sección 4.7.6) ". 
El impuesto especial de consumo es un impuest o indirecto que se constituye en una carga o 
impuesto interno pagado en el precio final por los consumidores, sea el caso de un bien importado 
o de producción nacional. Partiendo de este criterio, podría explicarnos Malasia cómo la exención 
de impuestos es peciales de consumo a los propietarios particulares de taxis (desde 2012) y las 
empresas de alquiler de automóviles para la compra de automóviles de fabricación nacional se 
ajusta a sus compromisos en materia de Trato Nacional, si los vehículos importados similares, por 
la medida de exonerar del pago del impuesto especial de consumo, estarían sujetos a un impuesto 
superior de los que se aplican a los vehículos de fabricación nacional.  
Answer : 
The excise duty rate is based on engine capacity and applicable f or both domestically produced 
and imported vehicles. However, for all domestically manufactured/assembled vehicles, reduction 
in excise duty is given to assist them to adjust and maintain their competitiveness in light of the 
liberalization exercises under taken by Malaysia.  
Nonetheless, under NAP 2014, in line with promotion of green technology, Malaysia is looking into 
rationalizing the automotive tax system in order to facilitate a more environment -friendly 
automotive value chain, while ensuring sustainab ility and competitiveness of the automotive 
industry.  
Página 73 párrafo 3.91.  
¿Cuáles son los parámetros que el Departamento de Ingresos de Malasia analiza para aceptar o 
rechazar las solicitudes de incentivos fiscales tales como la doble deducción, la "p rima de 
reinversión" o la desgravación por amortización?  WT/TPR/M/2 92/Add.1  
 
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  Answer : 
In general, the eligibility of incentives such as Pioneer Status and Investment Tax 
Allowance is based on certain criteria, including the level of value -added, technology 
used and industrial linkages. For further information, please visit : 
http://www.mida.gov.my/ .  
Página 74. Punto 3.4.2  
¿El programa de subvenciones e incentivos que aplica el país, está controlado por algún sistema 
que permita medir el gasto destinado a brindar este tipo de beneficios?  
Answer : 
The National Committee on Investment (NCI) has been established at the Malaysian 
Investment Development Authority (MIDA) to evaluate and decide on a pplications for 
investment incentives for project s in the manufacturing and services sectors (excluding 
utilities and financial services).  
Página 80, párrafo 3.107, pie de página 147 del Capítulo 3 "Políticas y prácticas 
comerciales por medidas.  
En relación a la Ley de Competencia de Malasia: "Una proh ibición afecta a los acuerdos contrarios 
a la competencia entre empresas que desarrollen su actividad en el mismo sector a través de la 
fijación de precios, el reparto del mercado, la limitación o el control del acceso al mercado y la 
manipulación de licit aciones; y la otra abarca el abuso de posición dominante por una empresa en 
cualquier mercado de mercancías o servicios " [
 .] La Ley de 2010 abarca todas las 
actividades comerciales (incluidas las de las empresas vinculadas a la administración (sección 
3.4.3)), a excepción de una serie de prácticas, acuerdos o actividades contrarios a la competencia 
(por ejemplo en el secto r de la energía y las comunicaciones), tanto dentro como fuera de Malasia, 
que afecten a la competencia en cualquier mercado dentro del país. " 
Según el párrafo 4.15 de la página 98 respecto de la empresa comercial del Estado Padiberas 
Nasional Berhad (BERN AS): 
"El arroz es el único producto que sigue sujeto a los derechos de importación exclusivos de la 
empresa comercial del Estado Padiberas Nasional Berhad (BERNAS), que prácticamente limita las 
importaciones de arroz al 30% del consumo interno de ese produ cto, en función de la oferta y la 
demanda del país (secciones 3.2.7 y 4.2.5) ". En virtud de lo expuesto, parecería que, al tener 
poder de mercado, las actividades de la empresa BERNAS estarían limitando las condiciones 
normales de mercado. ¿Podría indicarn os Malasia cómo se aplica su legislación en materia de 
competencia y protección a los consumidores para esta práctica? ¿Cómo dicha práctica se ajustaría 
también a los compromisos de Malasia en materia de empresas comerciales del Estado?  
Página 81. Punto 3. 4.4.1 De acuerdo a la Ley de Competencia del 2010, ¿se ha logrado en la 
actualidad hacer extensiva para todos los sectores controlados?  
Answer : 
BERNAS is the only State Trading Enterprise (STE) as stipulated under Article 17 of GATT 
1994. No other entities  are identified as STE.  
Malaysia does not implement any public tenders to import rice. Retail prices of rice is 
regulated under the Essential (Control of Supply of Rice) Regulations 1974, Rice (Grade 
and Price Control) Order (Amendment) 2008 [P.U.(A) 173, P.U.(A) 174, P.U.(A) 421 and 
P.U.(A) 422].  
The mechanism and regulations governing rice, can be simplified as follows:  
1. Government will compare the forecast of the local paddy/rice production, rice stock 
level against rice consumption requirement;  WT/TPR/M/2 92/Add.1  
 
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  2. Determine the level of import required;  
3. Communicate the import requirement to BERNAS;  
4. BERNAS will monitor season and price offered by various exporting countries;  
5. BERNAS will call for quotation and sample from reputable suppliers and authorized 
exporters;  
6. BERNAS will evaluate various factors such as price, supply availability, delivery 
period, payment terms, etc. before awarding and signing  the contract;  
7. BERNAS will make the shipping arrangement from Port of loading until Port of 
discharg e following the custom procedure and MOA approval; and  
8. Rice is delivered to warehouses all over Malaysia for stockpile and trading purposes.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM EGYPT   
Page 48, Para 3.37  
According to Para 3.37 in Page 48 of the Secretariat Report, " Malaysi a maintains imports 
prohibition on 13 major product categories " . 
- Would Malaysia please provide a full list of these products, and the basics on which this 
measure was taken?  
Answer : 
The imposition of import prohibition is in relation to measures pertainin g to public 
health and safety, environment and security reasons. The full list of these products is 
available at www.customs.gov.my . 
Page 58, Para 3.75  
In page 58 para 3.75 of the Secretariat Report Regarding the n ew Export Duty Structure applied 
on Crude Palm Oil starting from 1st January 2013.  
a) Could Malaysia please provide further information on this new export duty structure?  
b) Does Malaysia have plans in the short term to review or abolish this export duty?  
Answe r: 
a) The new rate of export duty for Crude Palm Oil (CPO) is between 4.5% to 8.5%. 
Export duty will be imposed if the price of CPO has reached RM2,250.00 and above. 
Further information can be obtained from : 
http://bepi.mpob.gov.my/index.php/statistics/export -duties/656 -export -duties -
2014.html . 
b) No. WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM THE E UROPEAN UNION  
With reference to the FTA negotiations procedures, it seems that there is no  requirement for 
parliamentary ratification.  
Question 1 : 
Could Malaysia please confirm that FTA provisions are directly applicable and do not necessitate 
any parliamentary ratification?  
Answer:  
The FTA ratification process currently does not require Parl iament approval.   
2.4.2.1 RTAs  
Page 30, paragraph 2.18  
Reference is done to the ATIGA (the ASEAN Trade in Goods Agreement), enhanced into a more 
comprehensive legal instrument that entered into force in May 2010.  
Questions 2 and 3:  
 What concrete, effectiv e steps have been taken by Malaysia to ensure that the objective of 
removing NTBs in ASEAN be met, as foreseen by ATIGA Art 42?  
 What is Malaysia's record of implementation of ATIGA Art 11 (notification of NTBs) and Art 13 
(ASEAN Trade Repository)?  
Answer : 
Article 42 of the ATIGA relates to the elimination of non -tariff barriers (NTBs) other than 
quantitative restrictions, in which Members shall review the non -tariff measures 
(NTMs).  
As part of enhancing transparency, identified NTBs/NTMs are available on the ASEAN 
Secretariat 's website. Six (6) cases were identified as pilot case studies targeted for 
elimination.  
All efforts are made for Malaysia to fulfil its notification obligations under all fora that it 
is committed to.  
Under Article 13 of the ATIGA there is a requirement for Member States to set up the 
ASEAN Trade Repository (ATR) at the ASEAN Secretariat website. For Malaysia, the 
National Trade Repository (NTR) can be accessed through the Malaysia National Single 
Window (NSW) Portal at www.mytradel ink.gov.my under the Ministry of Finance.  
Currently it is linked to the Customs website and all Custom related procedures are 
available on the NTR. Efforts are being undertaken to link other Ministries ' trade -related 
laws onto the NTR.  
Page 35, paragraph 2 .32 
In 2013, the Government issued a National Policy on the Development and Implementation of 
Regulations to promote an effective, efficient, and accountable regulatory process. The policy 
applies to all federal government ministries, departments, statutor y bodies, and regulatory 
commissions, which are now required to follow certain steps in developing regulations relating to 
trade, investment, and business.29 Regulators are required to make sure that government 
intervention is justified, stakeholders are c onsulted, an impact analysis is conducted, adverse 
impacts on the capacity of the economy to generate wealth and employment are minimized, and WT/TPR/M/2 92/Add.1  
 
- 73 - 
 
  regulations are not unnecessarily burdensome. The National Development Planning Committee 
(NDPC) is responsible f or overseeing the implementation of this policy, and is assisted by the MPC 
and the National Institute of Public Administration. According to the authorities, three pilot projects 
are in train with MITI, the Federal Agricultural Marketing Authority, and th e SPAN (the water 
commission) with MPC assisting them to undertake public consultations and impact analysis. 
Regulators must also ensure that all laws and regulations are reviewed every five years.  
Question 4:  
To what extent will this framework be applied  to both trade and taxation arrangements and if so, 
within what timeframe does the Malaysian Government intend to implement these?  
Answer:  
All Regulatory Coordinators at every ministry and agency will act as focal point to 
oversee the implementation of the  National Policy. There is no specific timeframe set, 
but the performance will be monitored.   
Question 5:  
What assurances can the Government provide that stakeholders from all sectors and industries will 
be allowed to participate in the formulation of reg ulatory policy under National Policy for 
Development and Implementation of Regulations to ensure that good regulatory practice is carried 
out and implemented?  
Answer:  
There is a requirement that all ministries and agencies seek views from the public, 
stake holders and affected parties for any new legislation or amendments to existing 
ones.  
Question 6:  
Could Malaysia clarify the state of play of the application and the implementation of the Circular 
issued on 26 April 2012?  
Answer:  
The circular provides gen eral guidelines on on -line public consultation and to ensure the 
implementation of the circular. A guideline on Public Consultation which provides 
guiding principles and the requirements for carrying out public consultation exercise is 
being developed this  year.  
Question 7:  
Is the Circular being implemented by the Malaysian Ministries and Agencies in full or is it being 
implemented in a pilot phase?  
Answer:  
The circular is a directive for all ministries and agencies to undertake full 
implementation.  
Ques tion 8:   
Is the Chief Secretary to the Government monitoring the implementation of his circular?  WT/TPR/M/2 92/Add.1  
 
- 74 - 
 
  Answer:  
There is a regular platform for all ministries/agencies to report to the Chief Secretary to 
the Government on the work undertaken related to the circu lar. 
Question 9:   
If so, can Malaysia share a status report on the implementation of this Circular, Ministry by 
Ministry and sector by sector?  
Answer:  
The progress is published through improvements done by the ministries/agencies.  
Page 35, Paragraph 2.35  
According to the report, the Government has continued to autonomously reduce or eliminate 
foreign investment restrictions in a number of services subsectors, and has bound the status quo 
of market access in the accountancy sector where no FDI thresholds we re previously in place. The 
EU notes that, in manufacturing industry, for example in the automotive sector, a 100% foreign 
equity is not yet allowed. Then, on a more general level, the EU is concerned about the lack of 
transparency and readily available pu blic information on FDIs.  
Question 10:   
Could Malaysia clarify if and where a complete and thorough compilation of information related to 
equity caps and other barriers, sector by sector is available?  
Answer:  
There is no equity restriction in the manufactu ring sector except for sensitive sectors of 
national security, public interest, and preservation of culture and heritage.  
Under the autonomous liberalisation initiative that was announced in 2012, foreigners 
are allowed to hold 100% equity in this sector.  
As a major initiative to ease of doing business in Malaysia and making Malaysia more 
attractive as an investment destination, the Prime Minister announced a comprehensive 
deregulation of investment guidelines administered by the Foreign Investment 
Committe e (FIC) on 30 June 2009. The scope and functions of the FIC have been 
substantially rationalised. The review of FIC guidelines encompasses:  
i) acquisition of equity stakes, mergers and takeovers;  
ii) treatment of fund raising by listed companies; and  
iii) acquisition of properties.  
Notwithstanding this deregulation, the national interest in terms of strategic sectors will 
continue to be safeguarded through sector regulators. Companies in such sectors will 
continue to be subject to equity conditions imposed by their respective sector regulators 
such as the Energy Commission, National Water Services Commission and Malaysian 
Communications and Multimedia Commission.  
On the availability of information on FDIs, all information on the specific sector can be 
obtain ed from the ministries/agencies concerned. Some of the information is already 
available online through the ministries / agencies website. Investors may also contact 
the Malaysian Investment Development Authority (MIDA) to seek advice and assistance 
on inve stment opportunities in Malaysia.  WT/TPR/M/2 92/Add.1  
 
- 75 - 
 
  Page 35, paragraph 2.40  
Question 11:   
What is the Malaysian Government 's position on the inclusion of investor -state dispute settlement 
in future bilateral and multilateral trade agreements?   
Answer:  
To date, Malaysia has signed 74 Investment Guarantee Agreements (IGAs) and 10 
Investment Agreements in FTAs, in which, most contain the investor -state dispute 
settlement (ISDS) provision. The ISDS is to provide investors with the opportunity to 
seek recourse in the event of an alleged breach in the Agreement.  
Notwithstanding the concerns and recent developments in International Investment 
Agreements (IIAs) on the risks posed to a Government by including the ISDS provision, 
Malaysia would still consider including the ISDS provisi on in future bilateral or 
multilateral IIAs by ensuring the necessary safeguards to protect government 
sovereignty and policy space are available.  
Page 37 & 43, Para 3.2 & 3.24  
Reference is to the tariffs applied on alcoholic beverages and, in particular, to the policy review of 
the alcoholic beverages sector as was announced nearly two years ago.  
Questions 12 and 13:   
 Could Malaysia inform the Members on the state of play of the ongoing policy review of the 
alcoholic beverages sector announced nearly two y ears ago, clarifying when Malaysia expect to 
unveil this review?  
 Can Malaysia share at this stage the main tenets of the review?   
Answer:  
The policy review of alcoholic beverages is still on -going and the main tenets of the 
review are as follows:  
i)  Address ing the complexity of the tax structure;  
ii) Addressing social ills and religious factors; and  
iii) Addressing health issues.  
3.2.1 Customs Procedures, customs valuation and rules of origin  
The EU would like to commend the Malaysian Government's concern about smugg ling and the 
measures undertaken by the Royal Malaysian Customs Authority including enhanced risk 
assessment, increased enforcement activities and operations, capacity building of enforcement 
officers and intelligence sharing.   
Question 14:  
How effective have these measures been to reduce the levels of smuggling/duty evasion in these 
sectors most impacted?   
Answer:  
The measures have helped reduce the levels of smuggling based on the number of cases 
recorded.  WT/TPR/M/2 92/Add.1  
 
- 76 - 
 
  Question 15:  
What further measures is the Malay sian Government seeking to implement to address this issue?  
Answer:  
Malaysia continues to encourage cooperation between international and domestic 
enforcement agencies and to enhance capacity building amongst frontline customs 
officers.  
Question 16:  
Given  Malaysia's commitment to the revised Kyoto Convention and also the SAFE guidelines and 
the growth in transit through Malaysian ports, can Malaysia outline what steps it is taking to 
ensure that there are adequate controls in place to ensure the correct ha ndling and manifesting of 
high risk goods in transit, including dutiable items, in Malaysian ports?  
Answer:  
The new customs information system will cover risk assessment on movement of goods 
in transit at Malaysian ports.  
Question 17:  
As part of the ASEAN  Economic Community Blueprint implementation (specifically the areas of 
promulgating customs integration and a coherent approach towards external economic relations), 
what consideration has been given to aligning initiatives towards minimising tax evasion and 
smuggling?  
Answer:  
RMCD like all ASEAN customs administration has adopted streamlined policies and 
procedures to minimise tax evasion and reduce smuggling.  
3.2.2.1 Applied MFN tariffs  
Page 41, Table 3.1 Malaysia's tariff structure, 2009 and 2013  
Bindin g tariff in the context of the WTO offers trade predictability and transparency for both 
importers and exporters.  
Question 18:  
Does Malaysia have any plan to bind all or part of the 20% of its unbound tariff lines?  
Answer:  
Malaysia will further review the  unbound lines and increase the level of binding in the 
Doha Round.  
Page 41, paragraph 3.22 and subsequent  
The EU notes that the tariff structure has changed slightly since the last Review of Malaysia. 
However, the complexity of the tariff structure remai ns relatively unchanged since 2009 and it 
could be further rationalized.  
Question 19:  
Does Malaysia have any plans for reducing the high tariffs applied in the tile and ceramics 
industry; in particular since now Malaysia is highly competitive in this secto r? WT/TPR/M/2 92/Add.1  
 
- 77 - 
 
  Answer:  
Tiles and ceramics is a sensitive industry to Malaysia. With regard to tariff reduction, 
Malaysia will continue to study and conduct consultation with the relevant industry 
players.  
Page 41, paragraph 3.22 and subsequent  
The EU notes that the t ariff structure has changed slightly since the last Review of Malaysia. 
However, the complexity of the tariff structure remains relatively unchanged since 2009 and it 
could be further rationalized.  
Question 20:  
Is Malaysia envisaging any measure in order t o reduce the peak tariff rates applied to the fruits 
and vegetables that are not locally produced as well as for some textile products and garments?  
Answer:  
Import duties for some textile products and garment were either reduced or eliminated 
during the 20 11 Budget.  The tariff rates applied to the fruits and vegetables that are not 
locally produced are relatively low.  
Page 44, paragraph 3.26  
Reference is done to the tariff rate quotas (TRQ) and to the HS transposition exercise.  
Questions 21 to 24:  
 What step s is Malaysia taking to complete the HS transposition exercise in order to allow a 
correct data collection for the TRQ fill?  
 When will the exercise be finished?  
 How does the transposition exercise prevent the collection of data on TRQ fill?  
 How does Mal aysia ensure the correct management the TRQs in the meantime?  
Answer:  
 Coordination among stakeholder ministries such as MITI, MOF, MOA and Customs 
together with industry 's consultations are currently being undertaken to identify 
conflicting product lines.  
 The transposition exercise involves re -classification of some TRQ products into new 
tariff lines. The management of TRQs is based on the current HS Code of the specific 
year.  
3.2.3.1 - Licensing  
Page 46, paragraph 3.32  
The EU notes that Malaysia is exten sively using non -automatic import licensing.  
Question 25:  
Could Malaysia clarify the rationale and the objective of its extensive use of non -automatic import 
licensing, clarifying also whether Malaysia is considering using less trade restrictive measures?  WT/TPR/M/2 92/Add.1  
 
- 78 - 
 
  Answer:  
Malaysia has progressively reduced import licensing requirements to facilitate trade and 
industry. Malaysia will continue to study and conduct consultations with the industries 
taking into consideration national socio -economic, security and religio us interests.  
3.2.3.2 Quotas  
Page 48, paragraph 3.36  
The EU shares the Secretariat report 's view that the Approved Permits system (APs) is allegedly 
administered in a non -transparent manner and operates as a de facto import quota by restricting 
the total number of imported vehicles in a given year with the aim of producing domestic industry.  
Question 26:  
Could Malaysia explain how it sees the compatibility of the APs system with WTO rules, in 
particular with Article XI.1 of the GATT?  
Answer:  
Issuance of AP  is for monitoring and data collection purposes. It is in line with the 
Import Licensing Agreement.  
3.2.3.3 Prohibitions  
Page 48, paragraph 3.37  
According to the report, as from March 2013, imports of 13 major product categories were 
prohibited, including  certain animal feed, tyres (new, retreaded), poisonous chemicals and 
minerals, substances under the Montreal Protocol, and logs and wood in the rough from Indonesia. 
The notification submitted by Malaysia in the Import Licensing Committee does not contain  specific 
details on the rationale behind this choice.  
Question 27:  
Could Malaysia explain in detail what is the rationale behind the choice to prohibit imports of 13 
major product categories, explaining notably why are imports of tyres prohibited?  
Answer:  
The imposition of import licensing is in relation to measures pertaining to public health 
and safety, environment and security reasons.  
Page 48, paragraph 3.37  
According to our information, Malaysia prohibits also import for fresh cut flowers and of pork meat 
and animal feed.  
Questions 28 and 29:  
- Could Malaysia clarify what legislation governs the imports of pork meat, of animal feed and 
fresh cut flowers?  
- Could Malaysia explain what are the reasons justifying the ban of import of fresh cut flowers, 
under  WTO rules?  WT/TPR/M/2 92/Add.1  
 
- 79 - 
 
  Answer:  
Importation of pork meat is governed by the Animal Act 1953 (Revised 2006) and 
importation of animal feed is governed by the Feed Act 2009.  
Malaysia has not introduced any ban on the importation of fresh cut flowers from EU or 
any other  country. The introduction of a new import procedure in 2013 whereby 
importer needs to specifically state the specie name of the fresh cut flower intended to 
be imported was in line with the updated Guidelines on Importation of Fresh Cut Flowers 
into Malay sia. Importation of fresh cut flowers into Malaysia has not been affected so far 
with the introduction of the new guideline.  The guideline can be viewed at 
www.doa.gov.my/myimport . 
3.2.5 Standards and other t echnical requirements  
3.2.5.1.1 Malaysian Standards Page 49, paragraph 3.43  
With reference to table 3.3, in the agricultural sector, in 2012, 45 out of 191 standards (23.5%) 
were identical to International Standards. This percentage (23.5%) is below the av erage of 
57.51%.  
Question 30:  
Could Malaysia explain whether they are envisaging any specific plan to increase alignment in the 
agriculture sector? (Standards Malaysia).  
Answer:  
Malaysia uses international standards  and guidelines where appropriate in deve loping 
standards for the agriculture sector as required by our stakeholders.  
The EU is aware that Malaysia is in the process of implementing domestic Medical Devices 
Regulations based on the ASEAN Medical Device Directive. The two -year transition period fo reseen 
is insufficient to set up the entire regulatory system for the registration of medical devices and the 
actual registration of a very large number all of products by the manufacturers. Based on the 
experience from other countries in the Asia -Pacific region, the timeframe foreseen by Malaysia is 
clearly very optimistic short.  
Question 31:  
Does Malaysia intend to extend the transition period in such a way that it will allow ample time for 
both the implementation of regulatory system and the actual regi stration of products?  
Answer:  
The above has been prescribed in Act 737 and there will be no extension of the 
transition period.  
Question 32:  
Will Malaysia accept a simplified evaluation registration approach, especially for products in the 
"low risk class"  as recommended by internationally acknowledged authorities?  
Answer:  
The Medical Device Authority of Malaysia exempts registration of low -risk products 
according to a list of identified products which excludes devices with a measuring 
function, and active devices. Notification to the Medical Device Authority is required.  WT/TPR/M/2 92/Add.1  
 
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  Question 33:  
Will Malaysia accept a simplified evaluation by the Medical Device Authority when a product has 
received regulatory approval in another country?  
Answer:  
The Medical Device Auth ority of Malaysia accepts regulatory approvals for devices from 
5 major countries (Australia, Canada, European Union, Japan and United States) of the 
Global Harmonization Task Force (GHTF) which will only require verification of their 
conformity by a local  Conformity Assessment Body before submission for product 
registration.  
3.2.5.1.2 Halal Certification  
Page 50, paragraphs 3.44 and 3.45  
According to the report, Malaysia has been successful in developing halal certification, reflecting 
the Government's ai m to make the country a hub for halal food products.  
Questions 34 to 39:  
- Has Malaysia undertaken a study to assess the actual and/or potential impact on trade flows of 
Halal requirements?  
- Should it be the case, would it be possible to know the results of  such study?  
- Does Malaysia share the view and objective that all requirements having an actual or potential 
impact on trade must meet the criteria of transparency and least trade restrictiveness?  
- In particular, what measures are taken to ensure that JAKI M complies with the criteria of 
transparency and least trade restrictiveness in developing and enforcing its own standards?  
- Could Malaysia make available to Members a final and official list of products that must comply 
with Halal requirements?  
- Could Mal aysia clarify what should be done in order to have other Halal certification institutions 
recognised by JAKIM?  
Answer:  
- There has been no study to assess the actual and/or potential impact on trade flows 
of Halal  requirements.  
- Malaysia practices transparenc y in accordance with Malaysian market requirements.  
- The Malaysia Protocol for Halal  Meat and Poultry Productions is the main reference 
document in exporting halal  meat to Malaysia. The protocol has been notified to WTO 
TBT in June 2011.  
- The regulation can  be accessed through the following link:  
http://www.halal.gov.my/v3/index.php/ms/garis -panduan/malaysia -protocol -for-
halal -meat-and-poultry -productions -2011   
- The recognition of halal  certifying bodies is on application basis. The procedure can 
be accessed through the following links:  
http://www.halal.gov.my/v3/index.php/en/guidelines/international -islamic -bodies  
or 
http://www.halal.gov.my/v3/images/stories/pdf/cb%20procedure28012014.pdf  WT/TPR/M/2 92/Add.1  
 
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  3.2.5.1 .5 Transparency Page 51, paragraph 3.49  
According to the report, between 2009 and 2012, Malaysia has made 17 notifications under the 
WTO TBT Agreement. Given this number, the EU wonders whether Malaysia has, indeed, notified 
all its draft technical regulat ions (including mandatory standards) and conformity assessment 
procedures with a significant impact on trade, in accordance with its obligations under the TBT 
Agreement.  
Questions 40 and 41:  
- Could Malaysia confirm that, in fact, during the review period, i t has adopted only 17 technical 
regulations or conformity assessment procedures which fall under the notification obligations in 
Articles 2.9, 2.10, 5.6 or 5.7 of the TBT Agreement?  
- If this is not the case, what measures has Malaysia taken, or is planning  to take in order to 
improve its compliance with TBT transparency obligations?  
Answer:  
Malaysia continues to improve its notification obligation through awareness programs 
among all regulators.  
.2.5.1.5 Transparency Page 51, paragraph 3.49  
The EU understan ds that Malaysia has recently amended its 1983 Food Regulations, inter alia by 
introducing new marking and labelling requirements for ceramic tableware, which entered into 
force on 1 January 2014.The EU is not aware that these amendments have been notified  under the 
TBT Agreement.  
Questions 42 and 43  
- Could Malaysia explain why these amendments have so far not been notified to the WTO?  
- Could Malaysia confirm that these new requirements will be notified in compliance with the 
provisions of the TBT Agreement ( including allowing 60 days for comments from other 
Members and taking those comments into account), and that the application of these 
requirements will be suspended pending such notification ? 
Answers:  
Malaysia will notify WTO of the new requirement. Malaysi a will continue to improve its 
notification obligation under the TBT Agreement.  
Page 54, Para 3.2.6  
Reference is made to the legislation on Government Procurement. The EU understands that, in a 
bid to cut corruption, the Government has agreed to operationa lize the decision to cut back on 
direct negotiations in favour of a tender system for all its procurement activities and that there will 
be no direct negotiations, unless under certain circumstances.  
Question 44:  
Could Malaysia further elaborate on this d evelopment and clarify what steps will be taken to 
operationalise this decision?  
Answer:  
Open tendering is mandatory for procurement of supplies, services and works above 
RM500,000. Direct negotiation is an exception to the Government Procurement WT/TPR/M/2 92/Add.1  
 
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  Regulatio ns subject to Ministry of Finance approval, based on criteria, i.e. security, 
uniformity, urgency and sole -sourcing.  
Many initiatives have been put in place to improve the government procurement system 
and enhance transparency in government procurement pr ocesses. Amongst the 
initiatives are procurement of supplies and services to be done online via ePerolehan 
system and information of successful bidders to be published in the MyPROCUREMENT 
portal.  
Page 54, Para 3.2.6  
The EU is also concerned about transpar ency and bidding procedures. According to the current 
legislation international tenders may only be called when local contractors do not have the 
expertise and capacities and a joint venture is not possible.  
Question 45:  
Does Malaysia consider changing pr esent conditions and apply to foreign investors and traders the 
same procedures as to Malaysian companies?  
Answer:  
Liberalisation of government procurement policy will be considered once the 
Government is satisfied that the local suppliers and contractors are able to compete on 
an even playing field with international players.  
Question 46:  
What does Malaysia expect the impact of the new Bumiputera Economic Empowerment Agenda 
(not mentioned in the WTO Secretariat 's report) public procurement policy to be?  
Answer:  
As government procurement policies are formulated in tandem with the national 
development policy, the policies will continue to support the national development 
agenda.  
Question 47:  
Does Malaysia envisage to pass any regulation to open the participat ion of foreign companies in 
Public Private Procurement (PPP) projects so as to ensure more value for money and minimize the 
risk of corruption?  
Answer:  
Public Private Procurement (PPP) is not part of the government procurement regime in 
Malaysia and has it s own regulations and procedures.  
Question 48:  
Is there any regulation bringing any transparency to offsetting programs for strategic industries 
including defence programs?  
Answer:  
In line with the existing Government Procurement Policy and Regulations, of fset 
becomes a mandatory requirement for Government agencies undertaking strategic and 
high value procurement. Implementation of the offset programme will have to comply 
with processes as stipulated in the Malaysian Offset Management Framework. This WT/TPR/M/2 92/Add.1  
 
- 83 - 
 
  framew ork is clearly described in the policy and the offset providers are expected to 
adhere to the requirements.  
Question 49:  
Since 18 July 2012 Malaysia is an observer of the WTO Government Procurement Agreement 
(GPA); is Malaysia considering to join the WTO G PA? 
Answer:  
By becoming an observer, Malaysia hopes to gain exposure, understanding and insight 
through the discussion and deliberation of the Committee meeting particularly in 
understanding GPA regimes aligned to the WTO agreement.  
Malaysia will assess i ts readiness to join the WTO GPA in consultation with stakeholders 
on the cost benefit of doing so besides the obligations that need to be fulfilled as a 
party.  
Question 50:  
What plans are there to ensure better competition in procurement by Government Lin ked 
Companies (GLC) and State Owned Enterprises (SOEs) such as relaxing rules on local agents?  
Answer:  
Government Linked Companies (GLCs) and State Owned Enterprises (SOEs) are not 
governed by the government procurement rules and regulations. All financial  matters for 
both GLCs and SOEs are under the purview of their respective Board of Directors.  
2.7- State trading, Page 57  
Question 51:  
Could Malaysia communicate at which level it maintains rice stockpile and at which price level it 
purchases rice from far mers?  
Answer:  
At present, The Government of Malaysia maintains 292 thousand metric tonnes of rice as 
the national rice stockpile. Paddy is sold by farmers to private millers and BERNAS mills 
at market prices. The Government is not involved in the purchase of rice.  
3.3.3 Export duties and taxes  
Page 58, paragraph 3.75  
The report provides a summary of Malaysia's export duty regime, which affects 482 tariff lines 
including raw materials such as crude petroleum and palm oil, metals, rubber, wood etc. According  
to the report, the main objective of these taxes is to promote the use of locally produced 
commodities in domestic downstream industries as well as to conserve the environment; however, 
such taxes tend to increase the domestic supply of the products conce rned artificially, thus 
assisting domestic downstream processing.  
Question 52:  
For each of the products subject to export duties, could Malaysia please explain what the specific 
conservation objectives justifying these duties are and what, if any, corresp onding restrictions are 
placed on domestic production and consumption?  WT/TPR/M/2 92/Add.1  
 
- 84 - 
 
  Answer:  
Export taxes are imposed only on raw materials such as crude palm oil and logs. This is 
to ensure a sufficient supply of raw materials and to prevent depletion of certain logs 
species in line with sustainable forest management.  
3.4.1.1 Indirect taxes  
Page 62, paragraph 3.85  
According to the report, the existing indirect tax arrangements on spirits mask the differentials 
between spirits mainly imported and certain chiefly local p roducts.  
Question 53:  
Will the Government of Malaysia afford 'national treatment ' to imported spirits in terms of internal 
taxation by reducing the rate to no higher ( de minimis  differences accepted) than that applied to 
any directly competitive or substit utable local product, in line with WTO requirements?  
Answer:  
Excise taxes were imposed on both local and imported products. The rates imposed are 
usually higher than the applied rates and are not aimed at protecting local industries but 
more for social con sideration since excessive alcohol consumption has negative effects 
on consumers and the society.  
3.4.4 Competition and consumer protection policy  
3.4.2 Financial assistance  
Page 64, paragraph 3.93  
According to the report, the Malaysian economy remains one  of the most highly subsidized in the 
region and the world.  
Questions 54 and 55:  
 Please provide an overview of the subsidy/support/grant/incentive schemes that Malaysia has 
for its industrial production and services sectors (including the legal basis, form , amount or 
budget and where possible the recipient of the subsidy granted by the government or any 
public body).  
 Please provide an overview over the public authorities (and procedures for) that have the 
authority to allocate budget to provide financial su pport to industrial production and services 
sectors as well as which are the authorities that administer such support schemes.  
 
Answer:  
The Government controls prices of essential items to ensure sufficient supply at 
reasonable prices and particularly acce ssibility by the low -income groups. Programmes 
are also available to provide access to education, quality healthcare and public 
transport. Incentives are also given to achieve food self -sufficiency for security reasons 
and to improve development of rural a reas.  
For information on incentives available for manufacturing and services sector, please 
visit http://www.mida.gov.my . WT/TPR/M/2 92/Add.1  
 
- 85 - 
 
  Page 69 Para 3.107  
Questions 56 and 57:  
- Does Malaysia have any plans in the foreseeable futur e to introduce merger control?  
- Could Malaysia give any indication regarding the timetable for a possible extension of the 2010 
Competition Act to cover all controlled sectors?  
Answer:  
Currently, there is no plan to introduce any amendment to the Competitio n Act 2010 or 
any other bill that seeks to govern merger control provisions.  
In ensuring effective enforcement of competition law and policy while maintaining 
consistency in its application, a Special Committee on competition was established in 
2012. Any i ssue related to the sectors exempted from the Competition Act 2010 is 
addressed in this Special Committee.  
Reference is done to the significant changes brought to the legal and institutional framework 
governing competition policy Industrial Co -ordination A ct 1975 and to the fact that manufacturing 
companies of a certain size have to apply for a manufacturing licence, for approval by the Ministry 
of International Trade and Industry (MITI).  
Question 58:  
Could Malaysia clarify the scope of application of the Industrial Coordination Act 1975, the sector 
affected, the relevant criteria, the process and procedures of licensing and the relationship with 
investment approval decisions by MIDA?  
Answer:  
The Industrial Coordination Act, 1975 requires person(s) engaging  in any manufacturing 
activity with shareholders' funds of RM2.5 million and above or employing 75 or more 
full-time paid employees to obtain a Manufacturing Licence. Effective 1 December 2008, 
automatic issuance of Manufacturing Licence was granted under the Act except for 
sensitive industries/activities related to security, safety, health, environment and 
religious considerations, projects proposed to be located in Sabah and Sarawak, and 
projects requiring approval under the Petroleum Development Act, 197 4, where 
evaluation and approval are still required for the issuance of the Manufacturing Licence.  
3.4.6 Intellectual Property Rights  
Page 74, paragraph 3.117  
The paragraph describes Malaysia's commitment to improved IP protection.  
Question 59:  
Has Malaysi a considered providing a single 10  year period of data exclusivity for agrochemicals, 
instead of the current period of 5 + 5  years?  
Answer:  
Data exclusivity for pesticides registration (authorization) will continue to be retained 
for a period of 5+5 years.  WT/TPR/M/2 92/Add.1  
 
- 86 - 
 
  Question 60:  
Could Malaysia clarify how proprietary test data (e.g. clinical trial data) submitted to the Division 
of Pharmaceutical Services is treated for a medicine that has been registered within 18 months 
from the date of first registration in the co untry of origin, and has been granted data exclusivity in 
that country?  
Answer:  
The Directive on Data Exclusivity states:  
- An application for Data Exclusivity shall only be considered if the application in 
Malaysia for a New drug product containing a New Ch emical Entity is made within 
eighteen months from the date the product is first registered or granted marketing 
authorisation; and granted Data Exclusivity / Test Data Protection in the country of 
origin.  
- The period of exclusivity shall be no more than fi ve years calculated from the date 
the product is first registered or granted marketing authorization and granted Data 
Exclusivity/ Test Data Protection in the country of origin.  
[The Directive can be downloaded at :  
http://portal.bpfk.gov.my/index.cfm?&menuid=105&parentid=82 ] 
Question 61:  
Similarly, in the scenario of question 59, could another applicant (e.g. generic or biosimilar 
manufacturer) pursue an abbreviated approval in M alaysia by relying on the originator applicant 's 
clinical trial test data in the country of origin? If so, please explain how this process protects the 
data against "unfair commercial use " within the meaning of TRIPS Article 39.3.  
Answer:  
No. 
Question 62:  
Similarly, in the scenario of question 59, could a third party (generic or biosimilar 
manufacturer, researcher, consumer, et al) obtain access to proprietary test data upon 
request to the Division of Pharmaceutical Services?  
Answer:  
No. 
Para 3.125  
Accordin g to the report, "the scope of protection does not differ between GIs for wines and spirits, 
and those registered for other products". This statement does not seem to be in line with the Laws 
of Malaysia Act 602 (GI Act) section 5 d), which covers exclusiv ely wines.  
Questions 63 and 64:  
- Could Malaysia please clarify and confirm whether the level of protection has been enhanced 
for other products than wines and spirits?  
- If so, could Malaysia please communicate the new relevant legislative provision?  WT/TPR/M/2 92/Add.1  
 
- 87 - 
 
  Answer : 
The provision is provided under the existing Geographical Indications Act 2000. The high 
level protection does not cover products other than wines and spirits.  
Para 3.125  
Question 65:  
Could Malaysia clarify whether Geographical Indications are covered by  ex officio power at 
Customs? If not, what would justify such exclusion?  
Answer:  
Provisions on ex -officio power for customs are provided under the Trade Mark Act 1976 
and the Copyright Act 1987.  
Para 3.129  
The paragraph describes basic principles for copyr ight protection.  
Questions 66 and 67:  
- Malaysia has become a party to WIPO Performances and Phonograms Treaty (WPPT), in effect 
from 27 December 2012. Can Malaysia confirm that its Copyright Law has been amended to 
provide for remuneration right for both pe rformers & producers (in line with Article 15 of 
WPPT)?  
- Currently the period of protection for literary, musical or artistic works is the life of the author 
plus 50 years. Has Malaysia considered extending this to life of the author  plus 70 years?  
Answer:  
The Malaysian Copyright Law provides remuneration rights to the performers in line 
with Article 15 of WPPT. For producers of phonograms, the Act provides exclusive rights, 
which exceeds the requirements of the WPPT.  
Currently Malaysia has no plan to amend the Copyright law.  
Page 87, paragraph 4.19  
Rice has always been accorded special border treatment and domestic support.  
Question 68:  
Are there any plans for relaxing import rules and enabling all countries to export rice to Malaysia?  
Answer:  
Rice is a str ategic crop for Malaysia as it is part of the national food security agenda to 
safeguard the interests of small poor farmers. Malaysia does not restrict imports of rice 
from any country. However, a multi -sourcing approach is adopted to ensure diversity of 
supply in order to minimise risk of supply in times of shortage.  
4.2.4 Domestic support  
Page 86, paragraph 4.18  
According to the report, under the 2014 Budget, the Government is allocating domestic support 
also to the palm oil sector.  WT/TPR/M/2 92/Add.1  
 
- 88 - 
 
  Question 69:  
Could Malaysia please explain what are the specific measures for the palm oil sector?  
Answer:  
Allocation for the oil palm replanting program is aimed at assisting small holders to 
replace low yielding oil palm trees that are over 25 years old, with high yield tr ees that 
are more productive.  
Question 70:  
Is Malaysia moving to ratify relevant UN conventions such as the FAO Port  State 
Measures Agreement, the Compliance Agreement and the UNFSA towards meeting its 
international obligations to cooperate on fisheries ma nagement?  
Answer:  
Malaysia has not made any decision thus far to ratify the said international instruments. 
Nevertheless, Malaysia has implemented and will continue to strive implementing some 
of the relevant principles and measures either individually or collectively according to its 
capability.  
Question 71:  
How does Malaysia ensure effective control and monitoring systems for its fishing fleet?  
Answer:  
Malaysia ensures effective control and monitoring systems through existing domestic 
legislation such as the Fisheries Act 1985, the Merchant Shipping Ordinance 1952 and 
the Malaysian Quarantine and Inspection Services Act 2011.  
Question 72:  
Is Malaysia Party or Cooperating Non -Party to any Regional Fisheries Management Organizations?  
Answer:  
Malaysia is a Pa rty to the Indian Ocean Tuna Commission (IOTC).  
Question 73:  
If yes, how does Malaysia ensure that it transposes into its national law the recommendations of 
RFMOs that it is contracting party /cooperating non -contracting -party?  
Answer:  
Malaysian Fisheries  Act 1985 only applies in Malaysian Fisheries Waters. As the law is 
not applicable to the high seas i.e. the Indian Ocean, efforts are being undertaken to 
make the necessary amendments.  
According to paragraph 4.23, since 2012, Malaysia has rejected four ap plications by IUU foreign 
fishing vessels to land their catches in Malaysian ports, consistent with its commitment under the 
2007 Regional Plan of Action (RPOA) to Promote Responsible Fishing Practices Including to 
Combating Illegal, Unreported and Unregul ated Fishing in the Region (IUU).  WT/TPR/M/2 92/Add.1  
 
- 89 - 
 
  Question 74:  
Could Malaysia clarify how does Malaysia ensure that it follows and implements measures to fulfil 
the RPOA Plan of Action?  
Answer:  
Malaysia works in cooperation with other RPOA member countries through the RPO A 
secretariat.  
According to paragraph 4.24, Malaysia maintains a National Plan of Action (NPOA) for IUU and is in 
the process of reviewing the NPOA Sharks and NPOA Fishing Capacity.  
Question 75:  
Could Malaysia clarify how Malaysia ensures that it follows a nd implements measures to fulfil the 
FAO International Plan of Action to fight IUU?  
Answer:  
We have developed and established the Malaysia National Plan of Action to prevent, 
deter and eliminate IUU Fishing and this NPOA is supported by ten (10) legislatio ns to 
ensure the fulfilment of the requirements of the FAO IPOA IUU.  
Pages 99 -102, paragraphs 4.57 -4.60 
In the previous NAP 2009, a commitment was taken to remove the APs (open APs by 2015 and 
Franchise APs by 2020). In January 2014, the Malaysian governme nt published a new version of 
the so -called 'National Automotive Policy', and announced its intention to commission a study on 
the impact of the removal of APs on stakeholders, in particular certain categories which are the 
main beneficiaries of the curren t system.  
Questions 76 and 77:  
- Could Malaysia confirm that this commitment still stands and that consequently the AP system 
will be fully eliminated by 2015 for open APs, and by 2020 for franchise APs, as previously 
announced?   
- With reference to local con tent, the EU understands that the current excise duties regime 
foresees lower duties for locally produced/assembled cars, depending on the local content.  
 What is Malaysia's assessment of the WTO compatibility of this regime?  
Answer:  
The Government will un dertake an in -depth and comprehensive study on the impacts of 
AP termination.  
Box 41 (page 103, Secretariat Report)  
Question 78:  
Could Malaysia confirms that all measures referred to in box 41, at page 103 of the Secretariat 
report, are already in force a nd implemented?  
Answer:  
All measures announced are already in force and were implemented effective from the 
dates of announcement except for legal services, engineering services, architectural WT/TPR/M/2 92/Add.1  
 
- 90 - 
 
  services and quantity surveying services. The amendment process  to the relevant Acts is 
at the final stage.  
Question 79:  
Could Malaysia provide the Parties with an overview of implementation timeframes sector -by-
sector and indicate the relevant legal basis?  
Answer:  
Please visit http://myservices.miti.gov.my  to get further details on the liberalised 
services sectors.  
Question 80:  
Could Malaysia clarify by which legal or regulatory means the liberalisation measures have been 
implemented, sector by sector? By gazetted new laws ? By Ministerial decrees? By Circulars?  
Answer:  
Liberalisation measures are implemented through amendments to the relevant Acts, 
guidelines and regulations.  
Question 81:  
Could Malaysia provide an exhaustive list of the liberalisation measures, for all rele vant sectors?  
Answer:  
Please visit http://myservices.miti.gov.my  for further details.  
Question 82:  
Could Malaysia give an overview of the effective results obtained following these liberalization 
rounds and cl arify whether new rounds of liberalization are in the pipeline?  
Answer:  
Generally, progressive liberalisation initiatives were seen to have a positive impact on 
the performance (for Value Added and Employment) of the services sector in Malaysia.  
Services  sector performance is on the upward trend, in terms of contribution to GDP:  
Year  GDP 
(in RM million)  Services contribution to GDP (%)  
2010  359.8  53.2 
2011  385.1  54.1 
2012  410.0  54.6 
Source: Department of Statistics Malaysia (DOSM) . 
While the manufactu ring sector remains the major recipient of the net investment 
inflows, the services sector is witnessing increased investments, particularly from 
foreign investors.  
To ensure that the liberalisation exercise is meaningful and fully benefits both foreign 
and domestic providers, efforts are being intensified to address operational and 
implementation issues through a coherent and streamlined institutional and regulatory 
environment as well as deepening the scope of sectoral liberalisation.  WT/TPR/M/2 92/Add.1  
 
- 91 - 
 
  Question 83:  
Could Malaysia clarify which are the licenses ' requirements that the foreign operators in the 
various sectors affected by the liberalisation measures have to comply with?  
Answer:  
Please visit http://myservices.miti.g ov.my  and www.mida.gov.my  for further details on 
the licenses ' requirements for the liberalised services sectors.  
Question 84:  
Could Malaysia provide an assessment of the actual impact, both as registered to date an d as 
forecast, in terms of trade and investment flows of the recently announced measures?  
Answer:  
In order to achieve a high income economy by 2020, a 6% annual GDP growth has been 
targeted. The services sector is forecasted to be one of the major contrib utors to this 
growth – targeted to increase from the 53.2% GDP contribution in 2010 to 61% by 2015 
(under RMK10), and to 65% by 2020 (under the IMP3).  
Three years after the first autonomous services liberalisation was announced in 2009, 
data reflects that investment has increased.   
Year  Total i nvestment  
(in RM billion)  FDI 
(in RM billion)  DDI 
(in RM billion)  
2010  36.7 3.9 32.6 
2011  70.4 17.9 52.5 
2012  117.5  12.1 105.4  
Source: Malaysian Investment Development Authority (MIDA) . 
Question 85:  
Could Malaysia  indicate whether, in addition to the measures described in the report, new 
liberalisation measures are envisaged? In particular:  
i. Could Malaysia clarify whether their authorities consider further opening of its services market, 
namely in the sectors of ICT , business support and environmental services?  
ii. When could we expect the effective opening of architectural and engineering professional 
services in Malaysia?  
iii. When is the current legislation 1967 Acts going to be amended? Will architectural and 
engineering  professionals be able to be registered with their European high quality diplomas 
and qualifications?  
Answer:  
The ICT sector has been fully opened. Further liberalisation of the services sector will be 
considered from time to time depending on the readines s, capacity and overall 
contribution of particular sectors to Malaysia 's economic interest and social well -being.  
Architectural and engineering professional services sectors will be liberalised once the 
amendments to the relevant Acts are completed.  
The P roposed Amendment of the Registration of Engineers Act 1967 is expected to be 
tabled in Parliament this year. Only those possessing qualifications equivalent to a 
Degree in Engineering and recognised by the Washington Accord can be registered as a 
Professi onal Engineer in Malaysia.  WT/TPR/M/2 92/Add.1  
 
- 92 - 
 
  Para 4.70  
According to the report, policy on investment in the financial sector (encompassing the banking, 
insurance, and takaful sectors) is based on prudential and the best interest of Malaysia criteria. 
The report mentions as  well the factors to be considered in determining whether an application is 
in the best interest of Malaysia under the FSA and IFSA.  
Questions 86 to 88:  
- Is the "best interest of Malaysia" criteria further spelt out in the Malaysian legislation or only 
circumscribed in the four broad criteria mentioned in the text? How will a decision be taken if 
two criteria come to different results - eg criteria b) and d)?  
- Off shore banking in Labuan: In what respect does the Financial Service Act applied in the 
LIBFC de viate from the Financial Regulation applied in the rest of Malaysia? Does Malaysia 
consider to aligning further both regimes?   
- As part of Malaysia 's modernisation and streamlining of its financial services legislation, what 
plans does the Government of Mal aysia have to reduce equity caps and joint venture 
requirements which act as market access barriers to the operations of foreign service 
suppliers?  
Answer:  
1. The best interest of Malaysia criteria is one of the considerations legislated under 
the Financial S ervices Act 2013 and the Islamic Financial Services Act 2013 that the 
Central Bank of Malaysia will take into account in assessing an application for a new 
license or equity acquisition in existing financial institutions. An assessment of all four 
consider ations will be taken together to form a view of whether or not the application 
will, on balance, be in the best interest of Malaysia . 
2. The Labuan IBFC is regulated and supervised by the Labuan Financial Services 
Authority, with permitted financial activitie s carried out only in foreign currencies and 
predominantly with non -residents. A series of enhancements to the relevant legislation 
have strengthened the conditions for a strong regulatory and supervisory system in 
Labuan IBFC. At the same time, measures a re in progress to review and update 
prudential regulations to be in line with standards applied in the rest of Malaysia. 
Additionally, subsidiaries of Malaysian banks operating in Labuan IBFC are subject to the 
Central Bank's group -wide prudential standard s and consolidated supervision.  
These enhancements are in line with the recommendations under Malaysia 's Financial 
Sector Blueprint 2011 – 2020 that aim to enhance the position of the Labuan IBFC as a 
cost-effective and attractive regional operational hub  to serve Malaysia, as well as the 
regional and international businesses at large through the creation of a more conducive 
and facilitative business environment.  
3. With the enactment of the Financial Services Act 2013 and Islamic Financial 
Services Act 2013 , Malaysia no longer has specific quotas on new licenses and hard 
foreign equity limits in financial institutions. All applications for new licenses and 
acquisition of interest in shares in financial institutions are now assessed having regard 
to prudentia l factors and whether the application will be in the best interest of Malaysia. 
This is to promote participation of new investors who are able to add value to the 
Malaysian financial sector and economy as a whole. At the moment, there are several 
ongoing n egotiations for the acquisition of a majority/significant stake in licensed 
financial institutions by foreign investors.  WT/TPR/M/2 92/Add.1  
 
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  4.7.3 Telecommunications  
Page 112, paragraphs 4.96  
The report mentions that the Malaysian Government maintains a strong presence in th e 
telecommunications sector.  
Question 89:  
How does the Malaysian Government ensure a functional and legal separation between its 
activities as a shareholder and the activities of the Regulator?  
Answer:  
The regulator is an independent body that does not hav e any management and financial 
interest in any telecommunication business entity. All telecommunications companies 
need to adhere to directives issued by the Regulator, irrespective of it being a 
Government Linked Company (GLC).  
Questions 90 to 93:  
Further more, with reference to the three types of licenses described in the Secretariat report:  
 Can these be obtained upon simple notification or is the provision of the three types of 
telecommunication services subject to prior authorisation?  
 If the latter is the case, can the procedure be described in more detail, in particular in terms of 
transparency, timing and costs?  
 What is the Malaysian policy towards access and interconnection?  
 What is the rationale for having number portability for mobile networks, b ut not for fixed 
networks?  
Answer:  
1. The three types of licenses are further categorised as 'individual licences ' and 'class 
licences '. The 'class licences ' are issued by simple registration.  
2. The Application Procedures are made available on the website of th e Regulator 
(http://www.skmm.gov.my ). In brief, an applicant who wishes to provide facilities 
and/or services which require an individual licence will have to submit a duly 
completed application form together with an  application fee of RM10,000. An 
applicant who wishes to provide facilities and/or services which is subject to class 
licence will have to submit a duly completed application form together with a 
registration fee of RM2,500.  
3. Malaysia allows access and inte rconnection at the base landing station but for any 
operation within the territory of Malaysia, a licence is required.  
4. The rationale for number portability for mobile networks and not for fixed lines is 
because there are a number of mobile networks operato rs in healthy competition for 
customers, but in the case of fixed networks one particular company holds 95 -97% 
of the fixed line market, so there is no necessity  to port to different operators.  
The report mentions the establishment of the Malaysia Healthca re Travel Council (MHTC) to 
promote the Malaysian healthcare industry globally. Furthermore, the report mentions the 
measures undertaken to support the healthcare travel industry.  WT/TPR/M/2 92/Add.1  
 
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  Question 94:  
Could Malaysia provide more information on the Malaysia Health care Travel Council and the 
requirements for membership?  
Answer:  
As captured under item 4.1333 - on page 119 of the Report by the World Trade Policy 
Review Body dated 27 January 2014, the Malaysia Healthcare Travel Council was 
established by the Ministry o f Health Malaysia in June 2009, to promote the Malaysian 
healthcare industry globally.  The Prime Minister of Malaysia launched the Malaysia 
Healthcare Travel Council on 21 December 2013.  There are two categories of 
membership:  
Category A  – Private Hospita ls and private ambulatory care centres in operation   
1. Has a valid licence issued by the Ministry of Health Malaysia, in compliance with the 
Private Healthcare Facilities and Services Act 1998 and Private Healthcare Facilities 
and Services Regulations 2006.  
2. Has valid accreditation standards award given by either a National or International 
Accreditation Bodies.  
3. Submission of Health Tourism Data as required by the Health Informatics Centre, 
Ministry of Health Malaysia.  
4. Has established a facility website.  
Category B  - Private Hospitals and private ambulatory care centres under construction  
1. In possession of approvals from the Local Authority/Council to build the facility.  
2. In possession of at least the approval to establish or maintain a private healthcare 
facili ty, issued by the Ministry of Health Malaysia, under the Private Healthcare 
Facilities and Services Act 1998 and Private Healthcare Facilities and Services 
(Private Hospitals and Other Private Healthcare Facilities) Regulations 2006.  
   
3. Has allocated in th e architect plan a dedicated centre within the healthcare facility 
under construction to cater for the care of international patients.  
4. Submit details of the targeted foreign market(s) and a brief outline on the initi atives 
made to achieve this.  
5. Submit to MHTC a copy of the hospital licence once the healthcare facility has 
completed its construction and is licensed by the Ministry of Health Malay sia to 
operate the facility.  
6. Once the hospital is in operation, the criteria for Category A shall apply.  
Question  95: 
Can foreign medical providers join the Malaysia Healthcare Travel Council?  
Answer:  
The Malaysian hospitals licensed by the Ministry of Health with foreign equity are 
allowed to join MHTC in the medical tourism promotion.  WT/TPR/M/2 92/Add.1  
 
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  Question 96:  
Could Malaysia in form whether foreign providers can also benefit from other supports measures 
such as tax exemptions and lifting of foreign equity limits?  
Answer:  
Foreign companies who have joint venture with Malaysian hospitals licensed by the 
Ministry of Health will be g ranted Investment Tax Allowance (ITA).  
Paragraph 4.136  
Question 97:  
Could Malaysia give an indication about when the entry into force of the Legal Profession Act is 
envisaged and when will it start being applicable?  
Answer:  
It is envisaged that the amendm ents to the Legal Profession Act through the Legal 
Profession (Amendment) Act 2012 will enter into force in 2014 and will be applicable 
immediately to foreign lawyers intending to practice in Malaysia.  
Question 98:  
Could Malaysia clarify whether it will be  possible for foreign law firms to hire locally qualified 
lawyers?  
Answer:  
Once the amendments have entered into force, foreign law firms established in Malaysia 
via international partnerships (IP) or qualified foreign law firms (QFLF) are entitled to 
hire locally qualified lawyers to practice in the foreign law firms, subject to conditions 
provided in the law.  
Question 99:  
Could Malaysia clarify which is the discretion at the disposal of the Bar Council in assessing 
applications for licences by foreign fir ms?  
Answer:  
When assessing the applications for licences by foreign firms, the Bar Council, as the 
regulatory authority governing the legal services sector in Malaysia, will have the 
discretion to impose certain conditions to the foreign law firms or fore ign lawyers as 
they see fit. These conditions will be reflected in the Legal Profession (Licensing of 
International Partnerships and Qualified Foreign Law Firms and Registration of Foreign 
Lawyers) Rules 2013 and the Guidance Note for Applicants, which are  currently being 
finalised by the Attorney General's Chambers and the Bar Council.  
Question 100:  
Could Malaysia clarify what are the criteria used by the Council?  
Answer:  
The criteria to be used by the Bar Council in assessing the application largely dep ends 
on the permitted practice areas, including whether the admission of foreign lawyers 
would contribute to the development of the permitted practice areas. These criteria will 
be reflected in the Legal Profession (Licensing of International Partnerships and 
Qualified Foreign Law Firms and Registration of Foreign Lawyers) Rules 2013.  WT/TPR/M/2 92/Add.1  
 
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  Question 101:  
Are these criteria known in advance and made public to potential applicants?  
Answer:  
Yes. Currently, the Bar Council has published on their official website the general 
information and criteria relating to application by foreign law firms for licences to 
practice in Malaysia. Internally, the Bar Council has been inviting foreign law firms to 
make application in escrow, pending the finalisation of the Legal Profess ion (Licensing 
of International Partnerships and Qualified Foreign Law Firms and Registration of 
Foreign Lawyers) Rules 2013   
Question 102:  
Is the decision of the Bar Council amenable to judicial review or any other form of appeal?  
Answer:  
No. 
Other issues : 
Withholding tax on payments to foreign companies (not mentioned in the WTO Secretariat report) 
is sometimes a problem, particularly for services providers. It affects payments of many services 
transactions.  
Question 103:  
Is Malaysia envisaging any measur es that could change the current situation?  
Answer:  
Withholding tax is a tax that is charged on income derived by a foreign service provider 
from the country of the service receiver. This tax is practised by most countries, even in 
the European Union, and the implementation is similar in these countries.  
In practice, a domestic person receiving service from a foreign service provider must set 
aside a sum from the payment to the foreign service provider as withholding tax and 
then remit that sum to the tax authority. This tax is charged according to the 
withholding tax rate set in domestic income tax law or if available, according to the 
double taxation avoidance (DTA) agreement between the country of the service receiver 
and the country of the service provi der. For example, in Malaysia, the withholding tax 
rate for fees paid for technical services is 10% of gross payment according to the 
Income Tax Act 1967 but may vary according to DTA agreement with different countries. 
The Income Tax Act 1967 and the DTA agreements in the Inland Revenue Board of 
Malaysia website can be referred to or the various tax agent services in Malaysia can 
assist.  
Since the withholding of tax is done at the service receiver level, there should be no 
problem experienced by the servic e provider as they will just receive their net income 
after tax. At the moment, there is no plan to change the current practice.   
2) Licensing procedures in services (General)  
Question 104:  
Does Malaysia not share the view that this level of discretionali ty in licensing procedures may 
deter potential investors, therefore defeating the very purpose of the liberalisation efforts?  WT/TPR/M/2 92/Add.1  
 
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  Answer:  
The Malaysian Government recognises the importance of providing transparency, clarity 
and certainty for investors. At the same time, a balance has to be struck in safeguarding 
the interest of the nation.The terms and conditions for a license are applicable to all 
applicants, irrespective of whether it is a local or foreign company.  
Under the Telecommunication Act for example,  although the Minister is granted the 
authority to modify, vary or revoke the conditions to an individual licence, the Minister 
would consider, amongst others,  the following matters before taking such action:  
(a)  the cost to be incurred by the licensee in com plying with the modified or new 
conditions;  
(b)  the impact of such changes to the market;  
(c)  the impact of such changes, if any, including the possibility of disruption of a 
service on the customer.  
If any licensee is of the view that they are adversely affecte d by the decision or 
determination of the Minister, recourse is available. They can submit an appeal to the 
Regulator, if the outcome is not satisfactory to them, they may bring this up to a 
judiciary body. There is the final recourse of bringing the matte r to an open court.  The 
law is crafted in a manner to protect the interest of all Parties. From our records, there 
is not a single case that has been brought to the open court so far.  
Page 5, Para 1.22  
The 12 National NKEAs are represent sectors where gro wth will be focused and these sectors were 
identified based on their potential GNI contribution and their multiplier effects across the economy. 
The 12 NKEAs are:  
i. Greater Kuala Lumpur/Klang Valley;  
ii. Oil, gas energy  
iii. Palm oil and rubber;  
iv. Wholesale & retail;  
v. Financial services;  
vi. Tourism;  
vii. Electronics & electrical;  
viii. Business services;  
ix. Communication content & infrastructure;  
x. Education;  
xi. Agriculture; and  
xii. Healthcare.  
Question 105:  
Among the 12 NKEAs (National Key Economic Areas), palm oil is one of the products where g rowth 
will be focused. Could Malaysia please elaborate on the objectives and means used to reach this 
goal as well as the sustainability considerations?  
Answer:  
The main objectives of the NKEA on Palm Oil are to improve upstream productivity and 
enhance th e downstream activities to achieve higher value -added as well as to ensure 
the sustainability of the industry.  Initiatives towards achieving these goals include Entry 
Point Projects to accelerate replanting and new planting with high yielding oil palm 
clones, develop oleo derivatives fmvoing  of palm oil and expand food and health based 
downstream activities as well as develops biogas facilities at palm oil mills.   
The National Commodities Policy, 2011 -2020 also stressed developing a sustainable and 
environm entally friendly oil palm industry through intensifying R&D&C in achieving WT/TPR/M/2 92/Add.1  
 
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  zero-waste practices and implementation of Life -Cycle Assessment at each stage of the 
industry. In addition, to ensuring sustainable practices among plantations and 
smallholders, th e Malaysian Government provides incentives to encourage compliance to 
the Roundtable Sustainable Palm Oil (RSPO).  To further strengthen sustainable 
practices, Malaysia is in the final stages of developing its own Malaysian Sustainable 
Palm Oil Standards.  
2.3 Multilateral Trade  
Page 9, paragraph 2.26  
Paragraph 2.26 states that Malaysia "… continues to participate actively at the WTO to ensure that 
trade regulations and measures do not hamper trade are not unduly burdensome … " 
Question 106:  
Will the Governme nt of Malaysia reform the current strip stamp regime for alcoholic beverages, 
which requires lost or damaged stamps to be recorded, returned and replaced, as this causes 
technical problems and expense and delays related to the purchase of the stamps and th eir 
placement on bottles?  
Answer:  
Malaysia has no plans to reform the current strip stamp for alcoholic beverages.  
Page 13, paragraph 3.6  
According to the report, under the Economic Transformation Programme, the Government plans to 
transform the agricultur al sector from fragmented and small scale farms to integrated and large 
scale agricultural business.  
Question 107:  
What are the measures envisaged to reach this objective and how is the impact on soils and 
environment taken into account (sustainability)?  
Answer:  
Malaysia's main strategy under the ETP in agriculture is to increase productivity and 
efficiency of the current production system. This is to be realised through sustainable 
use of resources including land and water through practices such as precis ion farming 
and mechanisation.  
FOLLOW -UP QUESTIONS  
SECRETARIAT'S REPORT   
3 TRADE POLICIES AND PRACTICES BY MEASURE  
3.2 Measures Directly Affecting Imports – and - 3.2.2.1 Applied MFN tariffs  
Page 37, paragraph 3.2 – and – page 43, paragraph 3.24  
EU questio n 12: Could  Malaysia inform the Members on the state of play of the ongoing policy 
review of the alcoholic beverages sector announced nearly two years ago, clarifying when Malaysia 
expect to unveil this review?  WT/TPR/M/2 92/Add.1  
 
- 99 - 
 
  Answer :  
The policy review of alcoholic bever ages is still on -going and the main tenets of the 
review are as follows:  
i) Addressing the complexity of the tax structure;  
ii) Addressing social ills and religious factors; and  
iii) Addressing health issues.  
EU follow -up to Q12:  The EU understands that th e policy review of tariffs and taxes for alcoholic 
beverages has now been working for at least two years. Could Malaysia please inform when this 
policy review will be finalised?  
Answer :  
Due to the complexity of the issue the policy review of alcoholic be verages is still on -
going.  
3.2.2.3 Tariff rate quotas  
Page 44, paragraph 3.26  
EU questions 21 to 24 : 
- What steps is Malaysia taking to complete the HS transposition exercise in order to allow a 
correct data collection for the TRQ fill?  
- When will the exe rcise be finished?  
- How does the transposition exercise prevent the collection of data on TRQ fill?  
- How does Malaysia ensure the correct management the TRQs in the meantime?  
Answer:  
Coordination among stakeholder ministries such as MITI, MOF, MOA and C ustoms 
together with industry's consultations are currently being undertaken to identify 
conflicting product lines.  
The transposition exercise involves re -classification of some TRQ products into new  
tariff lines. The management of TRQs is based on the cur rent HS Code of the specific 
year.  
EU follow -up to Q22:  As this question has not been answered, could Malaysia please indicate 
when the HS transposition exercise will be finalised?  
Answer :  
All efforts are being made to complete the exercise as soon as po ssible.  
EU follow -up to Q23: As this question has not been answered, could Malaysia please explain how 
the transposition exercise prevents the collection of data on TRQ fill?   
Answer : 
The transposition exercise does not prevent the collection of data on T RQ fill. However, 
transposition exercise is crucial to provide the correct HS Code for TRQ notification. WT/TPR/M/2 92/Add.1  
 
- 100 - 
 
  Malaysia will notify the level of utilisation of TRQ products once the transposition 
exercise with the WTO Secretariat is finalized.  
3.2.3.1 - Licensing  
Page 46, paragraph 3.32  
EU question 25 : 
Could Malaysia clarify the rationale and the objective of its extensive use of non -automatic import 
licensing, clarifying also whether Malaysia is considering using less trade restrictive measures?  
Answer :  
Malaysia  has progressively reduced import licensing requirements to facilitate trade and 
industry. Malaysia will continue to study and conduct consultations with the industries 
taking into consideration national socio -economic, security and religious interests.  
EU follow -up to Q25: While the EU welcomes Malaysia's commitment to progressively reduce 
import licensing requirements, the basic question posed has not been answered. Could Malaysia 
please explain in detail the rationale for the very extensive use of non -automatic licenses?  
Answer :  
The use of non -automatic license is for monitoring purposes.  
3.2.3.2 Quotas  
Page 48, paragraph 3.36  
EU question 26 : Could Malaysia explain how it sees the compatibility of the APs system with WTO 
rules, in particular with Articl e XI.1 of the GATT?   
Answer : 
Issuance of AP is for monitoring and data collection purposes. It is in line with the Import Licensing 
Agreement.  
Explanatory note:  According to the Secretariat report (paragraph 3.36) "The AP system is 
allegedly administered i n a non -transparent manner and operates as a de facto import quota by 
restricting the total number of imported vehicles in a given year. Under open APs, the quantity 
allocated is based on the open AP audit performance in the previous year. For franchise AP s, 
allocation is based on the performance of imports and annual imports proposed by APs holders. 
According to the authorities, since 2007 quotas administered via APs have exceeded the 10% of 
total industry production from the previous year, due to the lack  of restrictions on imports from 
ASEAN countries." Furthermore, in an answer to a question from another WTO Member, Malaysia 
has answered that "APs have been issues for ASEAN countries with no quantitative restrictions".  
Both of these information sources c learly indicate that APs are not only used "for monitoring and 
data collection purposes", but also to restrict imports through quantitative restrictions.  
EU Follow -up question to Q26: In light of this information, which also has Malaysian authorities 
as a source, could Malaysia explain how it sees the compatibility of the quantitative restrictions 
imposed by the APs system with WTO rules, in particular with Article XI.1 of the GATT?  
Answer :  
Malaysian Approved Permit (AP) is in line with the Import Licensi ng Agreement and 
Article XI.1 of the GATT.  WT/TPR/M/2 92/Add.1  
 
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  3.2.3.3 Prohibitions  
Page 48, paragraph 3.37  
EU question 27:  Could Malaysia explain in detail what is the rationale behind the choice to prohibit 
imports of 13 major product categories, explaining notably why are  imports of tyres prohibited?  
Answer : 
The imposition of import licensing is in relation to measures pertaining to public health and safety, 
environment and security reasons.  
EU Follow -up question to Q27: This question has only been partially answered. Coul d Malaysia 
please describe in detail the specific public health and safety, environment and security reasons for 
prohibiting the import of tyres?  
Answer : 
 Malaysia does not prohibit imports of new tyres.  
 Beginning 1 January 2010, Malaysia has enforced mand atory standards on new 
tyres as gazetted under the Fourth Schedule, Part II, Customs Order (Prohibition of 
Imports) 2009 that requires either one or any combination of the following standards:  
(i) E-Mark (United Nations Economic Commission for Europe);  
(ii) DOT (Fe deral Motor Vehicle Safety Standard -FMVSS USA); or  
(iii)  MS Standard (Malaysia).  
 The introduction of standards is aimed at prohibiting the influx of sub -standard 
tyre from being sold in the Malaysian market and to ensure the safety of road users in 
the country i s protected.  
EU question 29:  Could Malaysia explain what are the reasons justifying the ban of import of fresh 
cut flowers, under WTO rules?  
Answer : 
For fresh cut flowers, the importation requirements are governed by the Malaysian 
Quarantine and Inspection  Service Act (MAQIS) 2011 and Plant Quarantine Regulations 
1976.  
Importation of pork meat is governed by the Animal Act 1953 (Revised 2006) and 
importation of animal feed is governed by the Feed Act 2009.  
Malaysia has not introduced any ban on the importat ion of fresh cut flowers from EU or 
any other country. The introduction of a new import procedure in 2013 whereby 
importer needs to specifically state the specie name of the fresh cut flower intended to 
be imported was in line with the updated Guidelines o n Importation of Fresh Cut Flowers 
into Malaysia. Importation of fresh cut flowers into Malaysia has not been affected so far 
with the introduction of the new guideline. The guideline can be viewed at 
www.doa.g ov.my/myimport . 
EU Follow -up question to Q29: Could Malaysia please comments on whether the revised 
guideline for the importation of fresh cut flowers is in line with the relevant ISPM standard? If it is 
not, what legitimate policy objective does it pursu e? And is this the least trade restrictive measure 
available?  WT/TPR/M/2 92/Add.1  
 
- 102 - 
 
  Answer : 
The revised guideline is necessary to help Malaysia in identifying plant pest and disease 
associated with imported cut flowers. Interception of pest on a specific species of cut 
flowers  would ensure that future initiation of pest risk analysis (PRA) (If necessary) due 
to interception of certain pest is carried out on a specific species of cut flower and not 
applied to a family or genus of cut flower. Subsequently, the revised import requ irement 
and the introduction of any phytosanitary measures following the outcome of the PRA 
shall only apply to a specific species of cut flowers from a specific point of origin only. 
The measures shall adhere to the principle of SPS Agreement on Appropria te Level of 
Protection (ALOP).  
This will also ensure that introduction of a new import requirement or new 
phytosanitary measures (if necessary) on cut flowers are based on a specific species 
and sound pest risk analysis justification. Malaysia considered t his as the least trade 
restrictive measure to be implemented against an arbitrary and blanket import 
restriction of cut flowers into this country.  
3.2.5 Standards and other technical requirements  
3.2.5.1.1 Malaysian standards  
Page 49, paragraph 3.43  
EU qu estion 30 : Could Malaysia explain whether they are envisaging any specific plan to increase 
alignment in the agriculture sector?  
Answer : 
Malaysia uses international standards and guidelines where appropriate in developing 
standards for the agriculture sec tor as required by our stakeholders.  
EU Follow -up question to Q30: Malaysia indicates in its answer that international standards and 
guidelines are used where appropriate in developing standards for the agriculture sector as 
required by its stakeholders. C an Malaysia please explain how the requirements in both the WTO 
TBT and SPS agreements related to the use international standards are taken into account when 
seeking a better implementation of international standards?  
Answer : 
Malaysia is following Annex 3,  the Code of Good Practice for the Preparation, Adoption 
and Application of Standards. The national standardization system uses a consensus 
process to develop new standards, allowing all stakeholders to provide inputs into the 
development process.  
During d evelopment of standards itself, the public, including other countries' interests 
are considered in the adoption of new or revised standards through the "public 
comment" procedures on any draft standards and it is publicly available on the website.  
The prov ision in the SPS Agreement are studied and incorporated into the protocol and  
programmes at National Level which will be adopted and implemented at the state level 
as well.  
3.2.5.1.2 Halal certification  
Page 50, paragraphs 3.44 and 3.45  
EU question 36 : Doe s Malaysia share the view and objective that all requirements having an actual 
or potential impact on trade must meet the criteria of transparency and least trade restrictiveness?  WT/TPR/M/2 92/Add.1  
 
- 103 - 
 
  Answer : 
Malaysia practices transparency in accordance with Malaysian market  requirements.  
EU Follow -up question to Q36: Malaysia indicates in its answer that it applies transparency in 
accordance with Malaysian market requirements. Could Malaysia please explain in detail what the 
market requirements are for transparency, how they  are established, by whom and according to 
what criteria? Could Malaysia also explain to what degree the market requirements are in line with 
the principles of transparency and least trade restrictiveness as enshrined in the WTO TBT and SPS 
agreements?  
Answers for Questions 36  
Please refer to answer for Question 37.  
3.2.5.1.2 Halal Certification  
Page 50, paragraphs 3.44 and 3.45  
EU question 37:  In particular, what measures are taken to ensure that JAKIM complies with the 
criteria of transparency and least trade restrictiveness in developing and enforcing its own 
standards?  
No Answer.  
EU Follow -up question to Q37: As no answer  was provided to this question, we would reiterate 
our question asking Malaysia to clarify what measures are taken to ensure that JAK IM complies 
with the criteria of transparency and least trade restrictiveness in developing and enforcing its own 
standards.  
Answers for Questions 36 and 37  
During the development of standards, the public, including other countries' interests are 
considere d in the adoption of new or revised standards through the "public comment" 
procedures on any draft standards and it is publicly available on the website.  
The requirements as stipulated in the import protocol are in line with OIE guidelines and 
SPS Agreemen ts. The draft of the import protocol will be released/forwarded to the 
relevant or concerned competent authority for comments.  
Malaysia has complied with Annex 3, the Code of Good Practice for the Preparation, 
Adoption and Application of Standards of WTO T BT Agreement. The national 
standardization system uses a consensus process to develop new standards, allowing all 
stakeholders to provide inputs into the development process.  
3.2.6 Government procurement  
Page 54  
EU question 45:  Does Malaysia consider chang ing present conditions and apply to foreign investors 
and traders the same procedures as to Malaysian companies?  
Answer : 
Liberalisation of government procurement policy will be considered once the 
Government is satisfied that the local suppliers and contr actors are able to compete on 
an even playing field with international players.  
EU Follow -up question to Q45: Could Malaysia please explain what is meant by ''even playing 
field'' and what are the conditions for the ''even playing field'' to materialise?  WT/TPR/M/2 92/Add.1  
 
- 104 - 
 
  Answer : 
As Malaysia is a developing country, most of Malaysia's suppliers and contractors are 
still in the midst of establishing themselves before they can tap opportunities in the 
international market. Thus, the Government is of the view that Malaysia's i ndustry 
players are yet to be at par with international players due to unequal level of playing 
field that exits in terms of experience, technology expertise, financial capacity and legal 
support.  
Government procurement is used as a tool for nation buildin g in achieving a balanced 
socio -economy within the country, before even considering to liberalise government 
procurement. When the goal is materialised, only then the industries would be mature 
enough to enter global market and to be at an even playing fie ld with the international 
players.  
3.3.3 Export duties and taxes  
Page 58, paragraph 3.75  
EU question 52 : For each of the products subject to export duties, could Malaysia please explain 
what the specific conservation objectives justifying these duties are and what, if any, 
corresponding restrictions are placed on domestic production and consumption?  
Answer : 
Export taxes are imposed only on raw materials such as crude palm oil and logs. This is 
to ensure a sufficient supply of raw materials and to prevent de pletion of certain logs 
species in line with sustainable forest management.  
EU Follow -up question to Q52: Malaysia's answer seems to imply that export duties or other 
export restrictions are only imposed on crude palm oil and timber products. Can Malaysia please 
confirm that export duties or other export restrictions are no longer imposed on the other around 
480 tariffs lines mentioned by the Secretariat report? If export duties/restrictions are still imposed 
on all those products, then the question from th e EU remains unanswered. For each of the 
products subject to export duties, could Malaysia please explain what the specific conservation 
objectives justifying these duties are and what, if any, corresponding restrictions are placed on 
domestic production a nd consumption?  
Answer : 
Export taxes are imposed on raw materials and minerals which in total are 480 tariffs 
lines, for example crude palm oil and logs. This is for the purpose of conservation and 
environment.  
3.4.1.1 Indirect taxes  
Page 62, paragraph 3. 85 
EU question 53 : Will the Government of Malaysia afford 'national treatment' to imported spirits in 
terms of internal taxation by reducing the rate to no higher ( de minimis differences accepted) than 
that applied to any directly competitive or substituta ble local product, in line with WTO 
requirements?  
Answer : 
Excise taxes were imposed on both local and imported products. The rates imposed are 
usually higher than the applied rates and are not aimed at protecting local industries but 
more for social consid eration since excessive alcohol consumption has negative effects 
on consumers and the society.  WT/TPR/M/2 92/Add.1  
 
- 105 - 
 
  EU Follow -up question to Q53:  Could Malaysia state that the same excise taxes on spirits are 
applied to import and local products? Could Malaysia submit some pra ctical examples?  
Answer : 
The same excise taxes on spirits are applied to import and local products as gazetted in 
the Excise Order 2004 and 2012 in which excise duty shall be levied on and paid by the 
manufacturer or importer in respect of goods manufactu red in Malaysia or imported into 
Malaysia as listed in the Schedule.  
Example:  Chapter 22  
Heading description  Unit of quantity  Rate  of duty  
2203.00 Beer made form malt  Litre  RM 7.40 and 15%  
Para 3.129  
EU question 66 : Malaysia has become a party to WIPO Pe rformances and Phonograms Treaty 
(WPPT), in effect from 27 December 2012. Can Malaysia confirm that its Copyright Law has been 
amended to  provide for remuneration right for both performers & producers (in line with Article 15 
of WPPT)?  
Answer : 
The Malaysia n Copyright Law provides remuneration rights to the performers in line 
with Article 15 of WPPT. For producers of phonograms, the Act provides exclusive rights, 
which exceeds the requirements of the WPPT.  
EU Follow -up question to Q66: Could Malaysia please set out in detail what exactly are the 
exclusive rights provided in Malaysia for producers of phonograms?  
Answer :  
The detail of exclusive rights provided in Malaysia is stipulated under Section 13(i) of 
the Copyright Act 1987.  
4.6.1 Automotive industry  
Pages 99 -102, paragraphs 4.57 -4.60  
EU question 76 : Could Malaysia confirm that this commitment still stands and that consequently 
the AP system will be fully eliminated by  2015 for open APs, and by 2020 for franchise APs, as 
previously announced?   
EU ques tion 77 : What is Malaysia's assessment of the WTO compatibility of this regime?  
EU Follow -up question to Q76 and Q77: The EU questions remain unanswered. The NAP 2014 
does not seem to put into question the commitment made in NAP 2009 to remove Open APs by  
2015 and Franchise APs by 2020, only that a study to assess the impact would be carried out.  
Could Malaysia therefore please confirm that the commitment to remove the APs by the indicated 
dates still stands?    
With reference to local content, the EU unde rstands that the current excise duties regime foresees 
lower excise duties for locally produced/assembled cars, depending on the local content.  
What is Malaysia's assessment of the WTO compatibility of this regime?   WT/TPR/M/2 92/Add.1  
 
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  Answer : 
Q76. Timelines for termination of AP system as outlined in the NAP 2009 remains.  
Q77. Malaysia will continue the current excise duty regime as stipulated under the 
Excise Act 1976.  
4.7 Services  
4.7.1 Introduction  
Page 102 onward  
EU question 82:  Could Malaysia give an overview of the eff ective results obtained following these 
liberalization rounds and clarify whether new rounds of liberalization are in the pipeline?  
Answer : 
Generally, progressive liberalisation initiatives were seen to have a positive impact on 
the performance (for Value Added and Employment) of the services sector in Malaysia.  
Services sector performance is on the upward trend, in terms of contribution to GDP:  
Year  GDP (in RM million)  Services contribution to GDP (%)  
2010  359.8  53.2 
2011  385.1  54.1 
2012  410.0  54.6 
Source: Department of Statistics Malaysia (DOSM) . 
While the manufacturing sector remains the major recipient of the net investment 
inflows, the services sector is witnessing increased investments, particularly from 
foreign investors.  
To ensure that the libera lisation exercise is meaningful and fully benefits both foreign 
and domestic providers, efforts are being intensified to address operational and 
implementation issues through a coherent and streamlined institutional and regulatory 
environment as well as de epening the scope of sectoral liberalisation.  
EU question 83 : Could Malaysia clarify which are the licenses' requirements that the foreign 
operators in the various sectors affected by the liberalisation measures have to comply with?  
Answer : 
Please visit http://myservices.miti.gov.my  and www.mida.gov.my  for further details on 
the licenses' requirements for the liberalised services sectors.  
EU Follow -up question to Q82 and Q 83: Could Malaysia please comment on the fact that, in 
the services area, only 9% of total investment is foreign direct investment (FDI), while in the 
manufacturing sector, the vast majority of investment is FDI? In this respect, can Malaysia please 
commen t on how this reflects on the degree of openness of the services sector for FDI and impact 
of licensing procedures?  
Answer : 
While the manufacturing sector remains the major recipient of the net investment 
inflows, the services sector is witnessing increas ed investments, particularly from 
foreign investors.  
A number of important services sub -sectors have been opened up to foreign 
participation, either through binding commitments multilaterally, bilaterally or WT/TPR/M/2 92/Add.1  
 
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  unilaterally through autonomous liberalisation.  Following the liberalisation exercise, a 
comprehensive review of the institutional and regulatory mechanism has been 
undertaken to dismantle and remove burdensome processes and regulatory barriers that 
impede the liberalisation initiative.  
Investments, bo th foreign and domestic, are expected to further grow due to the 
liberalisation initiatives through binding commitments and unilateral initiatives 
undertaken by the Government in 2009 and 2012.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM INDONESIA  
2.4.1 WTO  (Page 29 Para. 2.15) 
"Malaysia has maintained a reasonably consistent flow of notifications to the WTO (Table A2.1). As 
at end October 2013, notifications were outstanding with respect to: agriculture (tariff quotas); 
import licensing procedures; quantitative restrictions; and cust oms valuation. It has not yet 
notified its MFN tariffs for 2013, nor has it submitted import data for 2012. It has not notified "any 
new, or any changes to existing laws, regulations or administrative guidelines which significantly 
affect trade in services ", which it is obliged to notify under Article III:3 of the GATS.  
Could Malaysia  please provide information about its intention to submit notifications on any new, 
or any changes to existing laws, regulations or administrative guidelines which significantl y affect 
trade in services ?  
Answer : 
Malaysia is committed to fulfil its obligations under all WTO Agreements, including the 
General Agreement on Trade in Services (GATS) and has taken measures to ensure our 
notification obligations are met.  
Page 34 Para. 2.26 
"The Malaysian Investment Development Authority (MIDA), under MITI is the Government's 
principal agency for the promotion of manufacturing and services (excluding financial services and 
utilities). MIDA's National Committee on Investments (NCI), estab lished in 2010, is charged with 
evaluating applications for manufacturing licences, income tax incentives, and customs duty 
exemptions. The NCI is able to approve applications for incentives immediately. Manufacturing 
licences, which are required for perso ns engaging in manufacturing activities over a certain size, 
are issued automatically within seven days unless they relate to sensitive industries/activities: 
security, safety, health, environmental and religious considerations; projects proposed to be 
located in Sabah or Sarawak; or projects requiring approval under the Petroleum Development 
Act.22 Under the NCI's client chart, responses to manufacturing licence applications in these 
sensitive areas should be provided within four weeks. A public private -sector task force, called 
PEMUDAH, is responsible for identifying measures to improve the business environment in 
Malaysia.  
What is the definition of "certain size " of manufacturing activities which are eligible for the 
issuance of automatic manufacturing li cense within seven days ? 
Answer : 
The ICA requires manufacturing companies with shareholders ' funds of RM2.5 million 
and above or engaging 75 or more full -time paid employees to apply for a manufacturing 
licence.  
Page 38 Para. 3.9  
Could Malaysia elaborate more about the price and supply control mechanism?  
Could Malaysia provide detailed information regarding the categories of essential goods and 
services over which price and supply controls were reinforced?  
Answer : 
Under the Control and Supplies Act 1961, t he gover nment controls the supply of 
22 essential items in order to ensure the supply of these items is sufficient.  
The 22 items are wheat flour, kerosene, sugar, fertilizer, cooking oil, petrol diesel, mild 
steel round bars, cement and clinker, LPG, brea d, chicken, rubber wood ( Kedah, Perlis, WT/TPR/M/2 92/Add.1  
 
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  Pulau Pinang and Perak), milk, salt, preserved fish, insecticides, rubber vinegar, rice, 
paddy (Sabah only), fuel oil and facemasks.  
Page 41 Para. 3.21 
"The tariff schedule is reviewed annually, mainly as part of th e national Budget process. In 
addition regular reviews of the tariff structure and tariff rates are held through dialogues between 
the authorities and the business community. The Special Advisory Committee on Tariffs (SACT), 
under MIDA, receives and consid ers applications for tariff review, which may then be announced in 
the annual Budget. " 
Malaysia 's annual review on the tariff schedule may create uncertainty for Indonesia 's exporters 
who enter Malaysia 's market. Could Malaysia p rovide explanation on the r ationale behind this 
mechanism?   
Answer : 
The review is undertaken as part of the Government 's initiative to lower its applied MFN 
tariff progressively. However, exporters from Indonesia can enjoy the benefits under 
the ASEAN Trade in Goods Agreement (ATIGA ). 
Page 38 Para. 3.9  
The requirement for import licensing for flour to be reissued every shipping activity could create 
burdensome to Indonesia exporters. Would Malaysia please review the validity period of this 
import licensing?  
Answer : 
Under the Control  and Supplies Act 1961, the government controls the supply of flour in 
order to ensure sufficient supply.  
Page 48 Para. 3.36  
"The potentially restrictive import licensing system of "approved permits" (AP) governing the 
importation and distribution of fore ign-built or assembled cars, trucks, and motorcycles, which 
forms part of the National Automotive Policy (NAP), is to be terminated in 2015 for open APs, and 
2020 for franchise APs (section 4.6). The AP system is allegedly administered in a non -transparent  
manner and operates as a de facto import quota by restricting the total number of imported 
vehicles in a given year. Under open APs, the quantity allocated is based on the open AP audit 
performance in the previous year. For franchise APs, allocation is ba sed on the performance of 
imports and annual imports proposed by APs holders. According to the authorities, since 2007 
quotas administered via APs have exceeded the 10% of total industry production from theprevious 
year, due to the lack of restrictions on imports from ASEAN countries. " 
Indonesia has some concerns on Malaysia 's policy to apply restrictive import licensing system of 
"Approval Permits " (Aps). On what grounds the said policy is applied?  
Answer : 
Restrictive imports for ASEAN have been liberalis ed beginning 1 January 2010 and APs 
have been issued for ASEAN countries with no quantitative restrictions.  
Page 48 Para. 3.37  
"During the period under review, Malaysia prohibited imports of a number of products from certain 
countries on religious, securi ty, health, and environmental hea lth and safety grounds 
(section  3.2.5). In March 2013, imports of 13 major product categories were prohibited, including 
certain animal feed, tyres (new, retreaded), poisonous chemicals and minerals, substances under 
the Mo ntreal Protocol, and logs and wood in the rough from Indonesia. " WT/TPR/M/2 92/Add.1  
 
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  Malaysia prohibited import of some products under Montreal Protocol. Indonesia is one of the 
exporters of Methyl Substances which are prohibited under Montreal Protocol. Regarding this issue,  
is it possible to substitute Methyl substances with other ozone -friendly substances such as 
phosphine?  
Answer : 
Under the Montreal Protocol and as gazetted under Malaysia 's Customs (Prohibition of 
Imports) Order 2012, only chloroflurocarbon (CFC), Halon an d Carbon tetrachoride 
substances are totally banned while 40 items of hydrochlorofluorocarbon (HCFC) and 
methyl bromide were controlled via Import Permits. Currently, Malaysia is implementing 
HCFC Phase out Management Plan (HPMP) and will prohibit the impo rt of HCFC based air 
conditioning equipment of 2.5 hp and below for use in Malaysia by 2015. Prohibition on 
import of all HCFC based products (except for essential use) will be implemented 
starting by 2020.  
As for Methyl substance, only methyl bromide used  for Non Quarantine Preshipment 
(Non QPS) is controlled under the Montreal Protocol. Methyl bromide used in Non QPS 
are used for pest control in soil application, structural and buildings and ship fumigation. 
Methyl bromide used for Qu arantine Preshipment (QPS) is allowed and an example of its 
application is for treatment of logs and wood. The import permit for agricultural 
products such as logs and wood are granted by the Agricultural Department of Malaysia. 
Certain import conditions are imposed to the per mit such as type of treatment used for 
logs and woods; be it the use of Methyl bromide, or any other ozone friendly substance 
such as phosphine or using heat treatment in case methyl bromide is not used by the 
exporting country. This also applies to other agricultural products.  
Page 48 Para. 3.38 
Malaysia has imposed anti dumping measure on newsprint roll during the period of 2003 – 2008 
and extended the measure until 2013 (sunset review). On 29 January 2014, MITI issued a sunset 
review initiation notificat ion on import of newsprint in rolls. Indoneisia believes that the Malaysian 
industry of newsprint in roll had been recovered during the imposition of anti dumping measure. 
Therefore, Indonesia urges Malaysia not to extend and should terminate the impositio n of anti 
dumping measures on import of newsprint in roll from Indonesia.  
Answer : 
Malaysia has initiated the Sunset Review investigation according to WTO rules and 
regulations. The final deliberation will be done after a fair and objective investigation 
has been carried out.  
3.2.5.1 Standards, testing, and certification (Page 49 Para. 3.41)  
"During the review period, the institutional setting in this area remained virtually unchanged. The 
Department of Standards Malaysia (Standards Malaysia, DSM) under the  Ministry of Science, 
Technology and Innovation functions as Malaysia's national standardization and accreditation body. 
SIRIM Berhad, a wholly state -owned company, is the national standards development agency 
under the provisions of the Standards of Malay sia Act; it is the national organization of 
standardization and quality and serves as the Government's catalyst for industrial research and 
development. Nevertheless, following the amendment of the Standards of Malaysia Act 1996 (Act 
549) (in force since 1 5 April 2012), Standards Malaysia is empowered to appoint multiple 
standards development agencies (SDAS), besides SIRIM Berhad, in order to expedite the 
development of Malaysian Standards (MS). The Malaysian Standards and Accreditation Council is 
the advis ory body established under the Act to advise the Minister of Science, Technology and 
Innovation on matters relating to standards and accreditation. Malaysia participates in the 
activities of the International Organization for Standardization (ISO) and the International Electro 
technical Commission (IEC). " 
Could Malaysia elaborate the mechanism in determining the second standard institution?  WT/TPR/M/2 92/Add.1  
 
- 111 - 
 
  Could Malaysia provide more detailed information regarding the coordination and the division of 
authority between the institutions?  
Answer : 
The Standards Development Agency (SDA) must have the relevant expertise and 
competencies in order to be appointed by the Department of Standards Malaysia as SDA. 
For example: Malaysia Timber Industry Board (MTIB) has been appointed as  SDA for the 
scope of timber and timber products. Department of Standards Malaysia is functioning 
as a National Standards Body in Malaysia, while the SDAs (ie: MTIB, Sirim Berhad) are 
appointed by the Department of Standards Malaysia to develop standards i n specific 
sectors.  
3.2.5.1 Standards, testing, and certification  
3.2.5.1.2 Halal certification  
Given the fact that Malaysia has no Mutual Recognition Arrangement (MRA) with foreign 
standards -setting bodies on standardization and inspection for halal certi fication, is there any 
possibility to explore MRA Halal cooperation between Malaysia and other Moslem countries?  
What is the procedure for applying halal certificate in Malaysia?  
Answer : 
Generally Malaysia has no objection to explore the possibility of hav ing an MRA on halal 
cooperation with any interested Muslim countries. However, the MRA must be based on 
an equivalence basis including the locus standi, similarity of the standards and the 
nature of operation of the body.  
Procedure for applying for halal c ertification in Malaysia can be accessed at:  
http://www.halal.gov.my/v3/index.php/en/about -halal -certification/general -
requirements   
https://www.msonline.gov.my/catalog.php?score=checked&istc_id=66   
http://www.halal.gov.my/v3/index.ph p/en/halal -certification -process -work -flow  
Page 89 Para. 4.26  
"Fish and fish products are subject to tariffs ranging from zero to 20% (Table A3.1). Ornamental 
fish receive a corporate tax allowance of 10% of the increase in their export value (section 3. 3.5). 
All of Malaysia's SPS notifications during 2010 -13 (July) concerned fish (2 live fish, 4 ornamental 
fish) (section 3.2.5.2.5). Malaysia provides domestic support for its fisheries sector. Until 31 May 
2011, trawlers above 70 GRT were able to buy dies el at RM 1.25 (US$0.41), compared with the 
already subsidized RM 1.80 payable after that date (section 4.5.1); it seems that the subsidy 
remains in place for other fishing vessels. " 
Please describe what kind of domestic support in fisheries sector that has  been granted to fishing 
vessels? What kind of vessels which are eligible to receive domestic support? Does it cover and 
include fishing establishments? How does the mechanism of this domestic support work?  
Other than for trawlers fishing vessels, what ki nd of other subsidies programs does the 
government apply? Are there any other domestic supports applied for fisheries sector?  
Answer : 
The current subsidy and incentive provided by Malaysian Government to the fishing 
vessels are Fuel Subsidy and the Fish La ndings Incentive. Other than for fishing vessels, 
there are no other subsidies and domestic support for the fisheries sector.  WT/TPR/M/2 92/Add.1  
 
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  Para. 4.71  
"A new Malaysia Deposit Insurance Corporation Act was enacted in 2011, replacing legislation from 
2005. The previous la w provided for compulsory deposit insurance for all deposit -taking banks 
through the Malaysia Deposit Insurance Corporation (PIDM). The new law provides for a wider 
financial safety net that includes a takaful and insurance benefit protection system and pr ovides 
the Minister of Finance with powers to extend protection coverage beyond the scope of normal 
protection for deposits as well as takaful and insurance benefits, for the purpose of safeguarding 
the stability of the financial system. At the time of Mal aysia's previous Review, and as part of the 
pre-emptive measures taken in response to the global financial crisis, the PIDM provided for 
temporary additional depositor protection over and above the explicit limit of RM 60,000 per 
depositor per member insti tution to a full guarantee for eligible bank deposits until December 
2010. With the lapse of the temporary full guarantee and improved market conditions, deposit 
insurance coverage was set at RM 250,000 per depositor per member institution, effective 1 
January 2011. The IMF has noted that while the deposit insurance framework largely conforms to 
best international practice, reserves are only sufficient for pay -outs to smaller banks. It has 
recommended that a back -up funding agreement with the Ministry of Fi nance should be put in 
place. However, the authorities noted that the maximum RM 250,000 limit provides for 99% of 
depositors to be protected in full. " 
In our opinion, t his provision created difficulties for the small insurance companies to fulfill the 
limit. What is the rationale behind the decision to increase depositor protection from RM 60,000 to 
RM 250,000? Indonesia suggests that it is more preferable to use percentage of total capital/total 
insurance premiums than specific amount base for depositor p rotection system.  
Answer : 
The Malaysia Insurance Deposit Corporation (PIDM) is a Government body established 
to administer and provide deposit insurance, and insurance/takaful benefits protection 
systems in Malaysia.  
Member institutions (banks, insurers a nd takaful operators) of PIDM are subject to a 
differential premium or levy system for its deposit insurance or insurance/takaful 
benefits protection schemes respectively. This is aimed at promoting greater fairness 
and providing incentives for sound risk management among member institutions. More 
information can be obtained at the PIDM website.  
The increase in the maximum limit for deposit insurance coverage for depositors to 
RM250,000 per depositor per member institution effective 1 January 2011 further 
strengthens the consumer protection framework for financial consumers in Malaysia.  
As for insurance/takaful benefits, the maximum coverage limits vary for the dif ferent 
types of protected beneﬁts. The maximum level of protection is predetermined to 
provide greater certainty, assurance and full protection to the vast majority of policy 
owners.  
3 TRADE POLICIES AND PRACTICES BY MEASURE  
3.2 Measures Directly Affecting  Imports  
3.2.3 Import licensing, restrictions, and prohibitions  
3.2.3.1 Licensing  
Page 46 Para. 3.32 
"No major changes have been made to Malaysia's import licensing regime, which affects about a 
quarter of Malaysia's tariff lines. Since 2010, 55 tariff lin es (e.g. sugar, saccharin, ractopamine, 
multicolour copy machines, automatic cassette/cartridge loa ders) have been removed, and 
28 tariff lines (e.g. agricultural products, timber products, tyres, aluminium products, CITES items) 
added to those subject to import licensing requirements. As of March 2013, imports subject to WT/TPR/M/2 92/Add.1  
 
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  licences were classified depending on the local destination of the merchandise: goods destined to 
the entire territory (8 major product categories including motor vehicles, ships derricks and 
cranes, certain substances, certain medicaments, medicine -making machines); goods destined to 
the territory except for specified free zones (20 product categories including sugar, rice milling 
machines, unmanufactured tobacco, chemicals, optical disc m astering/replicating machines, used 
tyres/brakes/batteries, tractors, motorcycles, chassis for motor vehicles, motorcyclist's helmets, 
and all goods from Israel); and goods destined to the territory except for specified free zones and 
certain states (Labua n, Langkawi, and Tioman) (14 product categories including wheat/meslin 
flours, and iron/steel/aluminium products). Furthermore, imports of 60 product categories 
(including live/edible animals/fish/birds, plants, pork products, milk, pasta, ice cream, anima l 
feeding, fertilizers of animal origin, paddy rice, coffee, cabbage, natural honey, numerous food 
products, logs/wood in the rough from all countries except Indonesia, wood, plywood, raw hides 
and skins, leather, arms and ammunition, explosives, pesticide s) were subject to permit or 
approval and inspection (often depending on the Malaysian State of destination) by different 
government or non -governmental agencies. According to the authorities this approval/permit 
requirement is to ensure the fulfilment of international commitments, as well as for national 
security, public health and safety, and monitoring purposes. " 
Question:  
1. Regarding the issue related to import licensing, it is stated that logs/wood in the rough from all 
countries were subject to permit or approval and inspection except those from Indonesia. We 
would like to ask why logs/wood in the rough from Indonesia receive different treatment?  As 
you are probably aware, the Indonesian Government has launched the Timber Legality 
Assurance System (stat ed in the Ministry of Trade Regulation No. 64/2012), which stipulates 
that it is mandatory to ensure that wood products from Indonesia originate from legal source 
and environmentally sustainable.  In order to eradicate illegal logging and illegal trading, w e 
request Malaysia to acknowledge this Timber Legality Assurance System as the requirement for 
logs/wood imported from Indonesia.   
Answer:  
Malaysia does not import log from Indonesia to eradicate illegal logging and illegal 
trading.  
3 TRADE POLICIES AND P RACTICES BY MEASURE  
3.2.5 Standards and other technical requirements  
3.2.5.1 Standards, testing, and certification  
Page 49 Para. 3.41 
"During the review period, the institutional setting in this area remained virtually unchanged. The 
Department of Standard s Malaysia (Standards Malaysia, DSM) under the Ministry of Science, 
Technology and Innovation functions as Malaysia's national standardization and accreditation body. 
SIRIM Berhad, a wholly state -owned company, is the national standards development agency 
under the provisions of the Standards of Malaysia Act; it is the national organization of 
standardization and quality and serves as the Government's catalyst for industrial research and 
development. Nevertheless, following the amendment of the Standards of  Malaysia Act 1996 (Act 
549) (in force since 15 April 2012), Standards Malaysia is empowered to appoint multiple 
standards development agencies (SDAS), besides SIRIM Berhad, in order to expedite the 
development of Malaysian Standards (MS). The Malaysian St andards and Accreditation Council is 
the advisory body established under the Act to advise the Minister of Science, Technology and 
Innovation on matters relating to standards and accreditation. Malaysia participates in the 
activities of the International O rganization for Standardization (ISO) and the International Electro 
technical Commission (IEC). " WT/TPR/M/2 92/Add.1  
 
- 114 - 
 
  Question:  
2. Could Malaysia disclose information on the criteria or requirement for appointing an institution 
to become Standards Development Agencies?  
Answer:  
All the information on Standards Development Agencies is publicly available on the 
website http://www.jsm.gov.my/web/guest/publications . 
3. Could Malaysia  provide us  with the list of Standards Devel opment Agencies?  
Answer:  
As of now, the Standards Development Agencies as follows;  
a) SIRIM Berhad;  
b) Malaysian Timber Industry Board; and  
c)  Malaysian Institute of Chemistry.  
3 TRADE POLICIES AND PRACTICES BY MEASURE  
3.2.5 Standards and other technical requireme nts 
3.2.5.1 Standards, testing, and certification  
3.2.5.1.1 Malaysian standards  
Page 49 Para. 3.42 
"Malaysian standards (MS) are voluntary unless referred to in legislation (including specific 
technical regulations). At end 2012 the major product categorie s of the 6,381 MS (5,444 in 2008) 
in place were chemicals and materials (707), information technology, communications and 
multimedia (687), power generation, transmission and distribution of energy (569), food and food 
products (463), and electrical and el ectronics equipment and accessories (426). At end December 
2012, 416 or 6.5% (3.2% at end 2008) of all MS were compulsory. A number of foreign standards 
and international standards are referred to in Malaysia's technical regulations. MSs are 
implemented in  product certification, quality management systems, and environmental 
management systems certification; they are reviewed every five years or whenever required to 
keep current with the latest technological developments. " 
Question:  
4. This Paragraph informed that 416 MSs were compulsory included materials related to building 
and civil engineering. Could Malaysia provide us with information on the technical regulation 
and transparency concerning certification provision including the duration of the certificatio n 
process?  
Answer:  
Standards are voluntary in nature. However, these standards become mandatory when it 
is referred in regulations and regulated by different/respective ministries/agencies. 
Hence, the requirements are determined by the regulators. Specifi c information can be 
accessed through the relevant agencies website.  WT/TPR/M/2 92/Add.1  
 
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  4 TRADE POLICIES BY SECTOR  
4.7 Services  
4.7.1 Introduction  
Page 102 Box. 4.1  
Referring to Box 4.1 Services liberalization, 2010 -13 page 102 of Secretariat Report, Architectural 
services w ill be autonomously liberalized once the Architects Act 1967 has been amended.  
Question:  
5. Could Malaysia clarify the exact time when Architects Act 1967 will be amended? This question 
also applies to Engineering Services and Quantity Surveying Services ? 
Answer:  
The Proposed Amendment of the Registration of Engineers and Architects and Quantity 
Surveyors Act 1967 has been submitted to the Attorney General's Chambers and 
expected to be tabled in Parliament by middle of 2014. Architectural, Engineering and 
Quantity Surveying Services will be liberalised once the Amended Act is passed and 
effective.  
4 TRADE POLICIES BY SECTOR  
4.7 Services  
4.7.2 Financial Services  
4.7.2.2 Onshore banking  
Page 108 Para. 4.77  
"All banking institutions must be locally incorporated in Malaysia. The requirement also applies to 
Islamic Banks, with the exception of International Islamic banks (which may be established either 
as a locally incorporated company or a branch). Locally incorporated foreign -owned commercial 
banks are allowed t o own up to eight branches and ten microfinance branches. The authorities 
highlighted that as articulated in the Financial Sector Blueprint, greater flexibility will be accorded 
to onshore financial institutions to establish new delivery channels, while pr omoting greater 
financial inclusion and wider adoption of electronic payments. " 
Question:  
6. What is the consideration in determining threshold for locally incorporated foreign -owned 
commercial banks are allowed to own up to only eight branches and ten micro finance branches?  
7. Further, although the limitation is subject to International Provision, the limitation may be 
indicated not in line with the spirit of liberalization in financial market. For that reason, please 
kindly explain why the opening of new branc h by locally incorporated foreign -owned 
commercial bank is limited to certain numbers?  
8. Are there any specific reasons why International Islamic Banks is exempted from the 
requirement that all banking institution must be locally incorporated in Malaysia?  
Answers for Question 6, 7 and 8 : 
Malaysia has adopted a sequenced approach to financial liberalisation to ensure 
maximum benefits accrue to the financial sector and the economy at large, while 
ensuring that financial stability is preserved at all times.  WT/TPR/M/2 92/Add.1  
 
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  The operational flexibility accorded to locally -incorporated foreign banks (LIFBs) to 
establish 8 new branches and 10 microfinance branches is aimed to provide greater 
opportunities for locally -incorporated foreign banks to perform a more effective 
intermediat ion role in the domestic economy, as well as a meaningful role in financial 
inclusion, especially in enhancing their outreach to underserved areas.  
Moving forward, greater flexibilities will be accorded to LIFBs to expand their 
distribution networks natio nwide under the Financial Sector Blueprint 2011 – 2020 to 
enable them to enhance their presence and contribute more meaningfully to the growth 
and development of the financial sector and economy as a whole.  
Malaysia accords this form of flexibility for the  institutional set up of international 
Islamic banks (IIB) to attract international institutions to conduct Islamic banking 
business in foreign currencies, excluding ringgit. This is in line with the Malaysia's 
aspiration to establish a vibrant and diversi fied international Islamic financial 
marketplace with active cross -border Islamic financial transactions. This flexibility is 
only granted to IIBs and not other banks, given the business scope of IIBs, which only 
encompasses foreign currency banking activi ties and excludes ringgit deposits and 
financing.  
4 TRADE POLICIES BY SECTOR  
4.7 Services  
4.7.2 Financial Services  
4.7.2.4 Labuan (offshore) banking and insurance  
Page 111 Para. 4.88  
"Companies established in the LIBFC may opt to pay either a corporate tax  rate of 3% or RM 
20,000. They are also exempt from withholding tax, stamp duties, and indirect taxes. Non -
Malaysian employees working in a managerial capacity in a Labuan entity are granted a 50% tax 
exemption on gross employment income. " 
Question:  
9. What is the consideration behind the regulation which allows companies established in the 
LIBFC to choose either paying tax of RM 20,000 or a corporate tax rate of 3%?  
Answer:  
The options provided are to promote a cost -effective business environment in LIBFC.  
4 TRADE POLICIES BY SECTOR  
4.7 Services  
4.7.4 Air Transport  
4.7.4.2 Airports and ground handling services  
Page 114 Para. 4.105  
"The government has made significant infrastructural investments, mainly to facilitate low -cost air 
transportation. These investme nts include a new low cost carrier terminal (LCCT) at KLIA to handle 
more capacity and the construction of another LCCT site in the Kuala Lumpur area. Additionally, 
the Government announced its intention to upgrade air traffic control systems at KLIA and S ubang 
airports and to upgrade the facilities in several others. Various incentives are offered to encourage 
new airlines to provide services to Malaysia, and to encourage existing airlines to expand the WT/TPR/M/2 92/Add.1  
 
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  services offered and provide services to new routes. These include incentive payments relating to 
passenger volumes and free landing and office rental for a fixed period. " 
Question:  
10. Please explain further the types of incentives provided to the new airlines and to airlines who 
intend to develop their routes/ lines?  
Answer:  
For types of incentives provided to new airlines and to airlines who intend to develop 
their routes/lines , kindly refer to http://www.malaysiaairports.com.my/ . 
11. Do the incentives equally app ly for foreign airlines that plan to provide services to Malaysia? 
If yes, what are the requirements and how to apply?  
Answer:  
The incentives are applicable for all airlines including foreign airlines. The airlines are 
generally required to operate at leas t one year and should be operating at the time 
when incentives are calculated and paid.  The incentive is paid as credit notes after each 
calend ar year.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM JAPAN  
3.3 Measures Directly Affecting Exports  
3.3.2 Export prohibitions, restrictions, a nd licensing  
(Question1: Page 58, Paragraph 3.73)  
Please provide detailed information concerning export licensing requirements on logs in each 
region of Sarawak, Sabah and Peninsular Malaysia.  
Answer:  
Below are the export licensing requirements on logs:  
Peninsular Malaysia and Sabah:  
Procedures for Timber Export Licence:  
To Open Deposit Account:  
 Exporter must be registered with MTIB;  
 Document involves: 1 copy of Timber Exporter (T/E) Registration Certificate; and  
 Deposit minimum RM200  
Procedures for Proces sing Export License  
Submit the application for timber export licence through the on -line portal: 
(http://www.mtib.gov.my/  or http://mcs.mtib.gov.my/ ). 
Export of Ramin Wood (Gon ystylus spp.) and Karas/Gaharu (Aquilaria spp./Gyrinop 
spp.) governed by CITES Commercial Regulations Appendix II.  
MTIB is the Management Authority for the issuance of CITES Export Permit for the 
export of Ramin/Karas/Gaharu wood originating from Malaysia,  or the "CITES Re -export 
Certificate for the re -export of Ramin/Karas/Gaharu wood from other countries, or the 
CITES Import Permit for the import of Ramin/Karas/Gaharu wood.  
Sarawak:  
Applicants must fill in the Registration Application Form (RM2.00/ set), which can be 
obtained from any Sarawak Timber Industry Development Corporation (STIDC) offices in 
Sarawak.  
Applications can also be made in writing (letter) should applicants wish to separately 
apply for:  
1. Renewal of mill/ manufacturing  
2. Additional activity / product / branch  
3. Cancellation of activity / product / branch/ company registration  
4. Replacement of registration certificate  
5. Change of particulars including change of company profile (address, company 
 name, ownership of company/ mill, etc.)  WT/TPR/M/2 92/Add.1  
 
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  BASIC DOCUMENT S 
Applicants are required to submit the following:  
1. Duly completed STIDC Registration Application Form, stamped and signed by an 
authorized signatory.  
2. Registration Fee payable to 'STIDC ' via crossed cheque, postal order or money order. 
Cash payment i s acceptable only if the total sum of fees is RM50.00 and below.  
3. Valid Trade License (Timber Related Business Activity)  
4. i) For Sole -Proprietorship or Partnership Business  
 Certificate of Registration of Business  
 Extract of Registration of Business  Names  
Or 
4. ii) For Private Limited (Sdn. Bhd.) or Public Limited (Bhd) Companies  
 Certificate of Incorporation of Private/Public Companies  
 Form 24 - Return of Allotment of shares  
 Form 49 - Return of Giving Particulars in Register of Directors, Managers  and 
Secretaries and Changes of Particulars.  
OTHER SUPPORTING DOCUMENTS (IF APPLICABLE):  
Export and Local Sale of Logs   
1. Forest Timber License for forest area licensee, or  
2. Sales and Purchase Agreement (Log) , or  
3. Logging Contract for Logging Contractors.  
Note: Approval of registration involving restricted activities/ products shall be in 
accordance with prevailing Ordinance and Regulations.  
ADDITIONAL INFORMATION - ICC/ICA REQUIREMENT  
1. Building plan approval/occupation permit from the relevant council/loc al 
 authority.  
2. Land -use approval from the relevant land authority.  
3. Approval from the Department of Environment for waste disposal/management 
 proposal.  
4. Approval from the Department of Occupational Safety and Health [applicable for 
 intended installation  of steam boiler, pressure vessel and powered hoist system].  
5. Any other approvals from Government authorities relevant to the establishment 
 of your project.   WT/TPR/M/2 92/Add.1  
 
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  (Question2: Page 58, Paragraph 3.73)  
Japan would like to learn whether Malaysia prohibits export  of any wood or wood product and, if it 
does, the reason of the prohibition.  
Answer:  
Malaysia does not prohibit export of any wood or wood products. However, exportation 
of wood and wood products is subject to obtaining an export license for monitoring 
purposes.  
3.3.3 Export duties and taxes  
(Question3: Pages 58 -59, Paragraph 3.75)  
Please provide detailed information concerning export taxes on logs, including base legislation and 
duty rate by species.  
Answer:  
The rate for export taxes for all timber produ cts are based on Customs Duties Order 
2012, P.U.(A) 275 which came into force on 31 October 2012. The export tax for logs is 
based on 15% of the value for selected species only.   
Para 3.121  
Please explain in detail the current status of the Optical Disc Ac t amendment; and  
Please provide information on how the inspection authority in Malaysia takes measures to ensure 
CD and DVD manufactures ' appropriate use of Optical Disk Labels under the Trade Descriptions 
(Optical Disc Label) Order 2010.  
Answer : 
Malaysia has no plans to amend the current Optical Disk Act.  
A licensed manufacturer is assigned with a manufacturer 's SID code and each optical 
disc manufactured shall be marked with the given code. Under Regulations 19 of the 
Trade Descriptions (Optical Disc Labe ls) Regulations 2010, a manufacturer is to 
maintain a monthly record of its manufacturing activities in the forms as prescribed in 
the Fifth Schedule which includes:  
(i) Date and quantity manufactured;  
(ii) Distribution: whether local or exports with the n ame and full address of 
clients;  
(iii) Name and address of copyright owner / exclusive licensee;  
(iv) Title of works;  
(v) Date of agreements; and  
(vi) Duration of agreement.  
The Ministry conducts random checks to ensure records of the fifth schedule are in  order 
and that all information given is true and accurate.  WT/TPR/M/2 92/Add.1  
 
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  Page 76, Paragraph 3.124  
Japan would like to learn the number of data protection for which MOH has provided. Please 
provide the following statistics:  
  The number of the cases in which MOH granted  data protection for an imported New 
Chemical Entity which had been approved for marketing in foreign countries prior to the 
acquisition of marketing approval in Malaysia.  
Answer : 
There are only 14 products has been granted for data protection as of 20.2.2 014. 
  The number of the cases in which MOH granted data protection for a New Chemical Entity 
which first obtained marketing approval in Malaysia prior to the acquisition of marketing 
approval in foreign countries.  
Answer : 
None.  
Page 76, Paragraph 3.124  
According to the Secretariat's report, a Trademark Bill 2010, which is to include provisions 
pertaining to the Madrid Protocol, was still under review by the Attorney General 's Chamber in the 
draft stage. Please provide information on the timeframe for any f urther procedures including 
enactment and enforcement of this bill.  
Answer : 
The Government of Malaysia is currently undertaking the necessary domestic processes 
relating to the proposed accession to the Madrid Protocol. As the process is dependent 
on many factors, it is difficult to provide an accurate timeframe for such processes.  
FOLLOW -UP QUESTIONS  
3 TRADE POLICIES AND PRACTICES BY MEASURE  
3.3 Measures Directly Affecting Exports  
3.3.2 Export prohibitions, restrictions, and licensing  
(Question1: Page 58 , Paragraph 3.73)  
According to the reply of Malaysia in the RD/TPR/264, there is not any export prohibition of any 
wood or wood products. However, Japan would like to know whether there is any prohibition or 
quantitative restriction made by the state gover nment concerning export of wood or wood 
products, not only made by the federal government of Malaysia.  
Answer:  
There is no prohibition or quantitative restriction imposed on exportation of wood 
products in Malaysia.  WT/TPR/M/2 92/Add.1  
 
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  3.4 Measures Affecting Production and Trade  
3.4.6 Intellectual property rights  
3.4.6.1 Industrial property  
3.4.6.1.2 Trade marks  
(Question2: Page 76, Paragraph 3.124)  
According to the answer from Malaysia, the Government of Malaysia is currently undertaking 
necessary domestic processes relatin g to the proposed accession to the Madrid Protocol.  
With regard to "necessary domestic processes," please describe what procedures exactly need to 
be taken. Furthermore, it is appreciated if Malaysia could provide the information on recent 
development (whi ch phase of the series of procedures it is in at present).  
Answer:  
Malaysia is currently drafting the provisions to implement the Madrid Protocol, and the 
process includes conducting internal consultations with other relevant 
ministries/agencies and stak eholders' consultation.  
3.4.6.1.6 Trade secrets  
(Question3: Page 78, Paragraph 3.128)  
(1) Please provide the following statistics;  
i) The number of the cases that MOH granted data protections to imported pharmaceuticals for 
second indication.  
Answer :  
5 cases . 
ii) The number of the cases that MOH grant ed data protections to domestic pharmaceuticals for 
second indication.  
Answer :  
None.  
(2) Please provide the average period of data protections for the following pharmaceutical products 
respectively;  
i) imported products for first indication  
Answer :  
46 months.  
ii) domestic products for first indication  
Answer :  
No application received to date . WT/TPR/M/2 92/Add.1  
 
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  iii) imported products for second indication  
Answer :  
30 months.  
iv) domestic products for second indication  
Answer :  
No application received to date.  
(3) When a test data (e.g. clinical trial data) which has been approved for marketing in Malaysia 
within 18 months from the approval in the country of origin and granted for an exclusive data 
protection is submitte d to the Director of Pharmaceutical Services, how it is treated? Is it possible 
for a third party (e.g. generic drug manufacturer) to file an simplified application for a marketing 
approval by relying on the clinical trial test data which has been submitte d by the first applicant in 
the country of origin? If so, does the Director of Pharmaceutical Services have an authority to 
approve such simplified application during the date protection period?  
Answer :  
The data submitted will be protected for 18 months through the data protection 
obligations. The data will remains confidential and will not be publically available even 
after the protection period since Malaysian authority does not use test data in the 
approval process of generic products.   
As for a third party to file an application for a marketing approval by relying on the 
clinical trial test data, the answer is n o, unless the consent has been given by the owner 
of the registered new drug product containing a New chemical Entity.   
(4) Regulation 29 of th e Control of Drugs and Cosmetics Regulations 1984 provides that "4.2 An 
application for Data Exclusivity shall only be considered if the application in Malaysia for:  
i) New drug product containing a New Chemical Entity is made within eighteen(18) months fr om 
the date the product is first registered or granted marketing authorization; AND granted Data 
Exclusivity / Test Data Protection in the country of origin or in any country, recognized and 
deemed appropriate by the Director of Pharmaceutical Services.  
ii) Second indication of a registered drug product is made within twelve (12) months from the date 
the second indication is approved; AND granted Data Exclusivity / Test Data Protection in the 
country of origin or in any country recognized and deemed appropr iate by the Director of 
Pharmaceutical services.  
It is considered that these requirements only for the persons who file applications for marketing 
approval in Malaysia after they obtained marketing authorization and data protection in foreign 
countries. Du e to the global nature of biopharmaceutical research and development, some new 
medicines could be granted market authorizations in foreign countries earlier than in Malaysia. Is 
the time restriction starting from the date of approval in foreign country con sidered to be 
inconsistent with Article 3 of the TRIPS Agreement?  
Answer : 
Malaysia's Data Exclusivity Directive (including paragraph 4.2) applies to both foreign 
and national applicants.  
(5) According to Article 4.2 of Regulation 29 of the Control of Dru gs and Cosmetics Regulations 
1984, it is considered that the data protection is not granted for a new drug product unless it is 
approved for marketing in Malaysia within 18 months from the approval for marketing in the 
country of origin. Is such exception of data protection consistent with Article 39, paragraph 3 of 
TRIPS Agreement ?  WT/TPR/M/2 92/Add.1  
 
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  Answer : 
Malaysia's Data Exclusivity Directive is consistent with Article 39, paragraph 3 of the 
TRIPS Agreement.  WT/TPR/M/2 92/Add.1  
 
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  QUESTION S FROM THE REPUBLIC OF KOREA  
Page 33(Para2.24)  
Malaysi a is a member of APEC and has been participating in its trade and investment -related 
initiatives over the review period. These include: the second Trade Facilitation Action Plan (TFAP 
II), which called for a 5% reduction in transaction costs by 2010; the S upply Chain Connectivity 
Framework launched in 2009; and the 2010 Bogor Goals Assessment. Malaysia is also a proponent 
of the APEC Ease of Doing Business Action Plan (2010 -15). This initiative has established goals for 
an APEC -wide improvement in five key areas of doing business by 2015: starting a business; 
dealing with permits; getting credit; trading across borders; and enforcing contracts. In 2011, 
Malaysia extended the APEC Business Travel Card (ABTC) facilities to transitional ABTC member 
economies, i ncluding Canada, Russia, and the United States. Malaysia also extended its ABTC 
special lane facilities to seven major checkpoints. The ABTC allows business travelers pre -cleared 
and facilitated short -term entry to participating member economies.  
Question 1 (1st part)  
Malaysia has made a commitment to reduce tariffs on 54 environmental products to 5% or less  
before 2015 as agreed among APEC members, although not mentioned in the relevant section of 
the secretariat report. Could Malaysia provide information regarding its implementation of the 
APEC commitment? Korea would also like to know if Malaysia has any plans to participate in the 
discussions in the WTO to eliminate tariffs on environmental goods.  
Answer:  
Consultations with the relevant stakeholders have  been initiated to implement 
Malaysia 's environmental goods (EGs) commitment in APEC by end 2015. Malaysia is 
monitoring developments in the WTO on plans to eliminate tariff on environmental 
goods.  
Page 43(Para3.25)  
Following the adoption of the HS12 and unilateral tariff reductions undertaken during the period 
under review, tariff dispersion changed in a positive manner as international tariff peaks and 
standard deviation were reduced significantly (section 3.2.2.1, Table 3.1, and Chart 3.3). On the 
other  hand, the overall pattern of tariff escalation remains in general pronounced and changed 
little since 2010, except for textiles and leather, for which the average applied tariff for fully 
processed good is now lower than for semi -processed goods (Chart 3. 3); for wood and furniture, 
average tariff protection for first stage of processing and fully processed items remains more than 
ten times higher than for semi -processed products.  
Question 2  
Although the unilateral tariff reductions adopted by Malaysia ha ve reduced its simple average MFN 
tariff rate to 5.6% (in 2013) from 7.5% (in 2009), the tariff structure continues to show significant 
escalation. Is the Malaysian government considering any plans to address the problem of tariff 
escalation?  
Answer:  
Malay sia is continuously undertaking a tariff review in consultation with the various 
stakeholders.  
Question 3  
According to the secretariat report, machinery for the construction sector in Malaysia is granted 
import approval only if it is not available locall y. Could the Malaysian government outline the 
rationale of this measure? Korea would also like to know if Malaysia has any plans to alleviate the 
current import restriction.  WT/TPR/M/2 92/Add.1  
 
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  Answer:  
Malaysia will continue to study and conduct consultation with the relevant  industry 
players in assessing the need to review the current import restriction.  
Page 48, para 3.36/ page 101, para 4.60  
As indicated in para 3.36 and 4.60, Malaysia implements "import license" system, called AP, in the 
automotive industry. Since it is no t in line with the WTO rules, termination of AP by the end of 
2010 was initially announced in NAP (National Automotive Policy) 2006. However, this was 
subsequently postponed to the end of 2015 in NAP 2009 in case of Open AP and to the end of 
2020 in case o f Franchise AP. Under the recently announced NAP 2013, the Government has 
decided to undertake an in -depth study in order to assess the impact of this termination on the 
Bumiputera participation in the automotive industry. While foreign auto makers and Mal aysian 
consumers hope for the AP system to be terminated earlier than the current schedule, the 
possibility for Malaysian government to postpone it once again could not be precluded at this 
stage.  
What is the stance of Malaysian government with regard to the termination of AP?  
Answer:  
The Government has decided to undertake an in -depth and comprehensive study on the 
impacts of AP termination. The study will assess both positive and negative impacts of 
AP termination towards the development of the Malaysian  automotive industry.  
Page 56, Para 3.65  
Malaysia became an observer to the GPA in 2012. However, compared to the current rules and 
regulations under the GPA, it seems from the secretariat report that there is much that needs to 
be changed in Malaysia 's current practices on government procurement. In this regard, Korea 
would appreciate information on Malaysia 's long -term policy regarding accession to the GPA.   
Answer:  
By becoming an observer, Malaysia hopes to gain exposure, understanding and insight 
throu gh the discussion and deliberation of the Committee meeting including learning 
and having a better understanding of the WTO GPA text. Malaysia also has the 
opportunity to learn from the experiences of other Observers who have applied for 
accession to WTO G PA and from the WTO GPA Parties.  
Malaysia will have to assess the readiness of its domestic industries to tap possible 
benefits and its government agencies commitments to the obligations stipulated under 
the WTO GPA obligations. This exercise is crucial be fore a decision can be made for 
Malaysia to consider acceding to the GPA.  
Page 62, para 3.85/ page 102, para 4.60  
High excise duty rates ranging from 65% to 105%, according to size of engine, applies equally to 
both domestically produced cars and imported  cars. But the rate is actually adjusted downward for 
local contents. The effective rate of excise duty for cars with higher local value addition is 
significantly lower after the rebate. It serves as great disadvantage for imported cars.  Information 
on how  much local content gets how much rebate is not available in public.  
How is the excise duty rebate system managed in automotive industry? Is it in line with WTO 
rules?  WT/TPR/M/2 92/Add.1  
 
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  Answer:  
Under NAP 2014, in line with the promotion of green technology, Malaysia is loo king into 
rationalizing the automotive tax system in order to produce a more environment -
friendly value chain, while ensuring sustainability of a competitive automotive industry.   
Korea understands that SME Masterplan 2012 was designed to enlarge the role of SMEs in 
Malaysia 's economy. Korea would like to know if the Malaysian authorities take into consideration 
the possibility that these measures may have unintentionally discriminatory effects on foreign 
investors.  
Answer:  
The SME Masterplan will be relev ant to all SMEs, across sectors and strategic areas. The 
focus would be to create an enabling ecosystem to accelerate the growth of SMEs 
through productivity gains and to bring them to the next level of development. Thus, the 
Plan advocates for measures to  enhance the legal and regulatory environment to be 
conducive for the formation, growth and exit of SMEs; to foster innovation among SMEs; 
to ensure creditworthy and innovative SMEs have access to financing; to upgrade 
management capabilities of SME owners  and worker competencies; to improve market 
access for SME products and services; and to enhance the physical infrastructure for 
SMEs to operate effectively. A capable pool of local SMEs would provide the supplier 
network and be overall positive on foreign  investment.  
Page  69 Para 3.107  
What effect has the adoption of the Competition Act had on Malaysia 's business environment? 
Does Malaysia plan to reinforce the law by regulating M&A activity as well? When does Malaysia 
plan to prepare a specific timetable for extending the law to cover all the controlled sectors? Also, 
please identify the sectors other than energy and telecommunications that are outside the 
coverage of this law and the reason why these sectors have been excluded.  
Answer:  
The Competition  Act 2010  is an act to promote  economic  development  by ensuring  
effective  competition  in the market  place  which  will also therefore  enhance  consumer  
interests.  
Mergers  were  excluded  at the time when  the legislation  was drafted  in line with a policy  
decision  to encourage  development  in the capital  market  as well as to encourage  M&A  
activities  in the business  sector  to strengthen  the domestic  market  and encourage  
corporate  global  activities.   
There  is no plan to introduce  any amendment  to the Competition  Act 2010  or any other  
bill that seeks  to govern  merger  control  provisions.   
As provided under section 3 and as specified under the First Schedule of the Competition 
Act 2010 (CA 2010), commercial activities under the sectors of Communications and 
Multimedia Act 19 98 and the Energy Commission Act 2001 are excluded from the CA 
2010 mainly because there are already existing provisions related to competition under 
those Acts.  
According to the Malaysian authority, the Industrial Co -ordination Act 1975 (ICA), which impos es 
licensing requirements on manufacturing activities according to the size of the shareholders ' funds 
and the number of employees, was designed to avoid excessive and unhealthy competition 
(page  19 Para 1.19).  
Has this act been applied frequently since i ts adoption? Please provide some example cases in 
which manufacturing licenses have been denied on the basis of this act.  WT/TPR/M/2 92/Add.1  
 
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  Answer:  
The Industrial Co -ordination Act 1975 (ICA) was introduced with the aim to maintain an 
orderly development and growth in the country 's manufacturing sector. The ICA 
requires manufacturing companies with shareholders ' funds of RM2.5 million and above 
or engaging 75 or more full -time paid employees to apply for a manufacturing licence 
for approval by the Ministry of International Trade and Industry (MITI). Applications for 
manufacturing licences are to be submitted to the Malaysian Investment Development 
Authority (MIDA). An existing manufacturing company (formerly exempted) is required 
to apply for regularisation, i.e. a manufactu ring licence once it reaches the licensing 
threshold. The following activities are exempted from the ICA as the sectors are under 
the purview of other relevant Ministries: milling of oil palm fresh fruits into crude palm 
oil; production and processing of r aw natural rubber; and milling of paddy into rice.  
A company that does not comply with the Industrial Co -ordination Act 1975 may be 
denied the licence.  
 WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM MEXIC O 
REPORTE DE LA SECRETARÍA  
2. RÉGIMEN COMERCIAL Y DE INVERSIONES  
Párrafo 2.9  En las  recomendaciones del "Nuevo Modelo Económico para Malasia ", ¿Podría 
mencionar las disposiciones relacionadas con la protección al ambiente?  
Answer : 
Provisions relat ing to Environmental Protection:  
 Environmental Quality Act 1974, Act 127 (Laws of Malaysia):  an act relating to the 
prevention, abatement, control of pollution  and enhancement of the environment, and 
for purposes connected therewith;  
 Environment Protection Enactment 2002 (Laws of Sabah): an enactment to make 
provisions relating to the protection of environment and for matters connected 
therewith and incidental thereto; and  
 Natural Resources and Environment Ordinance 1994 (Laws of Sarawak): an ordinance 
to consolidate and amend the law relating to conservation of natural resources.  
3. POLÍTICAS Y PRÁC TICAS COMERCIALES, POR MEDIDAS  
3.2.5.1 Normas, pruebas y certificación:  
3.2.5.1.2 Certificación halal  
Párrafo 3.45 . ¿Cuál es la situación actual de las preocupaciones emitidas por Argentina, Brasil, 
los Estados Unidos y la Unión Europea sobre el Protocolo de Malasia para los productos cárnicos 
halal, ante el Comité de Obstáculos Técnicos al Comercio?  
Answer:  
Malaysia has replied to all concerns raised through the respective WTO TBT Enquiry 
Points.  
3.2.5.1.5  Transparencia  
Párrafo 3.50.  ¿Cuál fue la razón por la que en  7 casos entre 2009 y 2012, en el marco de las 
notificaciones del Acuerdo Obstáculos Técnicos al Comercio, no se especificó plazo para presentar 
observaciones a los proyectos de normas?  
Answer:  
Malaysia continues to intensify its outreach to all regulators  on obligation in notifying 
technical regulations.  
3.4.3 Empresas Vinculadas a la Administración  
El párrafo 3.102 . señala que a pesar de que Malasia ha reducido gradualmente su participación 
directa en empresas en anteriores procesos de desinversión y pri vatización, ésta mantiene grandes 
empresas industriales y comerciales a escala federal y de los Estados, bien sea directamente, a 
través del Ministry of Finance Inc. (la división del Ministerio de Hacienda que supervisa las 
inversiones), o indirectamente, a través de diversas entidades de propiedad totalmente estatal, 
que pueden ser empresas vinculadas a la administración, empresas de inversión vinculadas a la 
administración u organismos públicos.  WT/TPR/M/2 92/Add.1  
 
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  México está interesado en conocer si Malasia tiene previsto continuar con estos procesos de 
desinversión y privatización. Asimismo, México quisiera saber qué empresas y qué sectores 
estarían incluidos en este proceso.  
Answer:  
Malaysia remains committed to gradually reducing the Government 's participation in 
busine ss activities with a view to achieving the following objectives:  
 Increasing the role of the private sector in economic development (private sector -led 
economy);  
 Reducing the burden on the Government 's fiscal budget; and  
 Improving productivity and efficienc y of entities.  
Government and state -owned assets will also be divested accordingly to create a 
competitive environment. However, the Government will continue to hold assets in 
business activities which are deemed as strategic to national interests.  
With re gard to investments by management companies, investment firms linked to the 
administration or public bodies where the Government merely acts as a custodian for 
unit holders or contributors by virtue of establishment of an Act under the Parliament, 
the dive stment and privatization decisions will be made by the respective entities 
consistent with their commercial pursuit objectives without government intervention.  
Nevertheless, the Government will continue to monitor the divestment initiatives so as 
to be in line with the Government 's efforts to facilitate a competitive environment for 
business and to strengthen the private sector 's role in driving the economy.  
4. POLÍTICAS COMERCIALES, POR SECTORES  
4.3. Pesca  
Párrafo  4.23 ¿El enfoque de "pesca sostenible " se ba sa en prácticas recomendadas por algún 
Acuerdo/Foro/ organismo internacional? Si es el caso, ¿podría mencionaras?  
Answer:  
Malaysia implemented the approach of 'sustainable fisheries ' based on provisions in the 
UNCLOS (Article 61 and Article 62) which stat es that the coastal states should take 
proper conservation and management measures based on the best scientific evidence 
available to ensure that the maintenance of living resources in the EEZ is not 
endangered by over -exploitation.  
4.24 Los objetivos plas mados en el Plan de Acción Nacional relativo a la pesca INDNR son 
compatibles con las buenas prácticas comerciales de sus principales socios comerciales? ¿En que 
procesos de negociación comercial, busca Malasia reflejar sus objetivos plasmados en su Plan d e 
Acción Nacional?  
Answer:  
Malaysia 's NPOA IUU is drawn based upon the FAO IPOA IUU,  adopting a 'toolbox ' of 
measures that may be adopted by Malaysia, individually or collectively, to combat IUU 
fishing . Measures are chosen and implemented to achieve the objectives in accordance 
with Malaysia 's capacity and obligation under international agreements or arrangements 
to which it is a party. Malaysia gives full cooperation to work with trading partners in 
preventing entry of IUU products through several means including the catch certification 
scheme. Malaysia also supports initiatives under the ASEAN processes as well as those 
under bilateral and multilateral agreements that combat IUU fishing.  WT/TPR/M/2 92/Add.1  
 
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  4.34 ¿Qué carácter jurídico tienen las recomendaciones que emite l a Administración para el 
Desarrollo Energético Sostenible, ¿son vinculantes o cuál es su alcance?  
Answer:  
At the moment, Malaysia does not have any legislation on carbon emissions 
cap/reduction in the energy sector. All carbon emission reduction activitie s are on a 
voluntary basis.  
The Ministry of Natural Resources and Environment is currently working on a master 
plan to reduce the nation 's carbon intensity per GDP by 40% by 2020, as compared to 
2005 levels. Apart from that, the country is also looking at  implementing the Nationally 
Appropriate Mitigation Actions (NAMAs) to demonstrate our commitment to carbon 
emission reduction.  
4.75 ¿Podría profundizar sobre las medidas adoptadas en el Plan General para Mercado de 
Capitales? En particular, sobre el aprov echamiento de la inversión en favor de cuestiones sociales 
y ambientales y el componente de sostenibilidad que compete a las empresas.  
Answer:  
The CMP2 outlines several key strategies to expand the role of the capital market in 
financing business ventures,  creating jobs, widening ownership of assets and 
generating returns on long term savings. The key strategies are:  
1) Promote capital formation . Create a conducive intermediation environment to seed 
emergent companies and industries, nurture the growth of smal l and mid -cap 
companies, finance large and high risk ventures, and promote investments in 
socially responsible projects;  
2) Expand intermediation efficiency and scope . Address structural constraints so as to 
increase the efficiency of savings intermediation a nd foster an innovative and 
diverse intermediation environment to expand the supply of assets to meet the 
needs of investors;  
3) Deepen liquidity and risk intermediation . Broaden the diversity of investment 
strategies and strengthen market connectivity throug h risk intermediation products; 
and widening the range of participants;  
4) Facilitate internationalisation . Expand growth boundaries by tapping global 
opportunities to facilitate an expansion in scale and to capitalise on hub 
opportunities in areas of compara tive advantage; and  
5) Build capacity and strengthen information infrastructure . Strengthen the knowledge 
base through talent development and acquisition to support the expansion of the 
capital market into high value -add areas and build a strong information 
infrastructure to address information asymmetries and promote service innovation 
and efficiency in a highly electronic environment . 
In creating an enabling environment to foster innovation and diversity in capital 
markets, CMP2 also outlines strategies to e nsure robust governance arrangements to 
manage the risks to investor protection and stability. The key strategies are:  
1) Enhance product regulation to manage risks . Foster a more conducive environment 
for product innovation and diversity while ensuring that active fund -raising and 
financial innovation benefit investors;  
2) Expand accountabilities as intermediation scope widens . Create an enabling 
environment for participants to broaden intermediation activities and strengthen 
industry capabilities and standards;  WT/TPR/M/2 92/Add.1  
 
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  3) Robust regulatory framework that supports a changing market landscape . Ensure a 
consistent regulatory approach to a changing market environment with a focus on 
enhancing the quality of markets;  
4) Effective oversight of risks . Expand regulatory coverage, cap acity and tools to 
ensure effective supervisory reach and to strengthen oversight of risks to market 
stability;  
5) Strengthen corporate governance . Strengthen the effectiveness of corporate 
governance through broad -based approaches to promote greater stewards hip, more 
active shareholder participation and strengthen gate -keeping accountabilities;  
6) Broaden participation in governance . Promote active participation of stakeholders in 
shaping intermediation and corporate behaviour and promote a culture of integrity 
and of increased emphasis on socially responsible goals .  
Recognising that there is room to expand the role of the capital market in developing 
innovative approaches to finance environmental projects, CMP2 places emphasis on 
broadening the range of financin g instruments to manage community infrastructure 
development and the building of educational, healthcare and cultural facilities. Also as 
economic and social goals are inevitably intertwined, CMP2 highlights the need for social 
and environmental issues to gain greater prominence in the corporate decision making 
process. Efforts are also being directed at development of metrics and disclosures to 
measure the impact of businesses on the environment as well as the adoption of 
sustainability reporting framework s. 
4.7.7.3 Servicios de Arquitectura  
Párrafo 4.137  señala que se prevé que con las modificaciones de la Ley de Arquitectos de 1967, 
se flexibilizarán los requisitos de ciudadanía y residencia para los arquitectos. Toda vez que los 
arquitectos extranjeros (que no son ciudadanos ni residentes permanentes de Malasia) sólo 
pueden registrarse como arquitectos temporales cuando sean consultores de un proyecto 
financiado en su integridad por un gobierno extranjero o ejecutado en virtud de acuerdos 
bilaterales. Co n respecto al suministro transfronterizo de servicios de arquitectura, las empresas 
extranjeras de arquitectura pueden constituir empresas conjuntas con empresas locales para la 
ejecución de proyectos específicos, con la aprobación del Colegio de Arquitect os, que es 
responsable de la observancia de la Ley de 1967.  
México está interesado en conocer cuáles son los criterios de aprobación del Colegio de Arquitectos 
para la constitución de empresas conjuntas. Del mismo modo, México quisiera conocer el alcance 
de flexibilización de los requisitos de ciudadanía y residencia para los arquitectos.  
Answer:  
In the amendments to the Architects Act 1967, all architects will have the same 
treatment subject to domestic regulations which among others, is the requirement t o sit 
for the qualifying professional examination.  
With regard to cross -border supply of architectural services, architectural foreign 
companies can own equity in Multi -Disciplinary Practices to a maximum of 30% through 
joint ventures with local companies with the approval of the Board of Architects 
Malaysia (BOAM) and other relevant boards.  
The approval of the Ministry of Education (MOE) is required to set up a joint venture 
college for architectural studies together with BOAM for accreditation. The Counci l of 
Architectural Accreditation & Education Malaysia (CAAEM) has been established under 
the BOAM to evaluate and accredit architectural programmes offered by colleges or 
universities, in accordance with the Accreditation Manual of BOAM.  WT/TPR/M/2 92/Add.1  
 
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  INFORME DEL GOBIER NO DE MALASIA  
5. DESARROLLO ECONÓMICO  
Párrafo 1.16  ¿En qué consiste la "modernización de la legislación laboral "? 
Answer:  
The key labour laws in Malaysia are the Employment Act 1955, Labour Ordinance (Sabah 
Cap 67) and Labour Ordinance (Sarawak Cap 76), Indu strial Relations Act 1967 and 
Trade Unions Act 1959. As these laws were enacted in the 1950s and 60s, steps are 
being taken to review the provisions of these laws, in line with current developments. In 
addition, the Government has also introduced new laws namely the National Wages 
Consultative Council Act 2011 and the Minimum Retirement Age Act 2012.  
6. EVOLUCIÓN DE LA POLÍTICA COMERCIAL  
Párrafo 2.33  ¿Qué implicaciones legislativas tendrán las cuestiones relativas a desarrollo 
sostenible en materia ambiental y  laborar consecuencia del ALCA con UE?  
Answer:  
Malaysia is unable to provide any details as negotiations on labour and environment 
under the Malaysia -EU FTA are on -going.  
Párrafo  2.56 ¿Qué acciones específicas se están llevando a cabo para cumplir el com promiso de 
2015 relativo a la lista de bienes ambientales de APEC?  
Answer:  
Consultations with the relevant stakeholders have been initiated for the implementation 
of Malaysia's environmental goods (EGs) commitment to APEC by end 2015.  
7. PERSPECTIVAS DE FUTUR O 
Párrafo  5.2 ¿Podría describir más detalladamente la forma en que  se alentará a las empresas a 
adoptar normas y requisitos internacionales en materia de medio ambiente? ¿Podría mencionar las 
normas y requisitos internacionales a los que se refiere?  
Answer : 
We encourage companies to adopt international standards through various seminars and 
awareness campaign.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM NEW Z EALAND  
SECTION 3: TRADE AND PRACTICES BY MEASURE  
3.2.1.1 Registration, documentation, and clearance requirements  
WT/TPR/S/292,  p.39, para 3.14  
Section 3 of the Secretariat 's Report, page 39, para 3.14 notes that Malaysia 's 2011 time release 
study, conducted in accordance with the Revised Kyoto Convention found that Malaysia is not yet 
fully consistent will all the commitments of  the Royal Malaysia Customs Department under its 
client charter.  
Could Malaysia outline what endeavours it is taking to expedite the processing of consignments 
subject to preferential tariff rates and the time for responding to rejections and queries raise d by 
Customs?  
Answer : 
Consignments claiming preferential tariff rates take a longer time to process.  
This is because importers have to wait for the original copy of the Certificate of Origin 
(COO) to be sent to them by the suppliers overseas and subsequen tly forward it to the 
Customs brokers to claim the preferential tariff rate.  
To resolve the delay in the presentation of Certificate of Origin, it is suggested that 
facilitative treatment by faxing the invoice be extended to the Certificate of Origin. A fa x 
copy of the certificate should be allowed to be used to claim the preferential tariff rate 
pending the submission of the original copy within a stipulated time.  
Another alternative is to further extend the use of a web -based Certificate of Origin 
applica tion and approval system commonly known as the Electronic Preferential 
Certificate of Origin (ePCO). ePCO is an online document that certifies the country of 
origin of a product and proves the origin of goods to satisfy customs or trade 
requirements. Howev er this measure will require the agreement and investment of FTA 
partners.  
Encouraging implementation of Self -certification in FTA which allows the exporter to 
make out an Invoice Declaration for the export of goods as  Self-certification allows 
Customs to facilitate movement of goods under the preferential tariff rate without 
requiring exchange and verification of signatures.  Malaysia is currently in the pilot SC 
program under AFTA .  
There is no specific time taken in responding to rejections and queries ra ised by 
Customs. In accordance with the OCP of the FTA, Customs will allow importers to either 
pay the MFN rate pending verification or deposit a bank guarantee and allow goods to be 
released. Refunds or release of bank guarantees will take place once veri fication is 
received from FTA partners.  
WT/TPR/S/292, p.44, para 3.26 and p. 85 para 4.14  
Section 3 of the Secretariat's Report, page 85, para 4.14 notes that Malaysia continues to apply 
tariff-rate quotas particularly on agricultural products, apparently  to allow a reasonable time for 
the development of the industry.  New Zealand exporters also report on administrative challenges 
in accessing some of these quotas.  
Could Malaysia explain what plans it might have for improving the administration of, and 
ultimately phasing out, its tariff rate quotas?   WT/TPR/M/2 92/Add.1  
 
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  Answer : 
The current practice of quota allocation is on a first come first served basis Every year 
the in -quota volume will be increased. Malaysia does not have any plans to remove the 
TRQs over the short/medium term as it was implemented only on 1 April 2008.  
3.2.2.5 Duty concessions/exemptions (WT/TPR/S/292, p.45, para 3.30)   
Section 3 of the Secretariat Report, page 45, para 3.30 notes that duty exemptions are granted to 
local as well as foreign -owned manufactu ring companies.  
Can Malaysia provide more information as to how these exemptions/drawbacks operate, including 
how eligibility is determined and applications processed?  
Answer : 
Manufacturing companies involved in value added activities located anywhere in the 
country are given duty and tax exemption on raw materials, components and machines 
which are basic and directly used in the manufacture of the finished goods. The refund is 
given for the amount of import duty paid on the materials and components upon e xport 
of the manufactured goods.  
The process is  as follows:  
1. Companies apply to the Custom Authorities (Customs Act 1967, Section 99) for pre -
approval to use the drawback facility, before importation, indicating the component 
and material as well as finishe d goods to be exported;  
2. To notify intention to claim refund upon exportation; and  
3. To submit claims after the goods have left the country.  
3.2.5.1.1 Malaysian Standards testing and certification (WT/TPR 292, pp.49 -50, paras 3.40 -3.43)  
Section 3 of the Secre tariat 's Report, pages 49 -50, paras 3.40 -3.43 notes the improvement and 
development of standards are among Malaysia 's priorities for achieving high -income -nation status 
by 2010 and its 2004 National Standards and Strategy Action Plan continues to serve as a 
guideline to enhance Malaysia 's standardization activities until 2020.    
Could  Malaysia explain why its uptake of international standards in the food sector is lower than 
for other sectors?  
Answer : 
Malaysia uses international standards  and guidelines whe re appropriate in developing 
standards in the food sector as required by our stakeholders.  
Page 94, para 4.37  
Section 4 of the Secretariat 's Report, page 94, para 4.37, notes that energy subsidisation poses 
ongoing fiscal, budget, developmental, environm ental and political challenges for Malaysia, 
channels resource revenues away from productive investment, and encourages inefficient energy 
consumption, while often failing to meet their intended objectives (pg 97, para 4.46). New Zealand 
notes that, in add ition, such subsidies have the potential to distort trade and divert investment 
and economic activity to jurisdictions that pursue a subsidies policy approach, contribute to price 
volatility by blurring market signals, incentivise fuel smuggling and lower the competitiveness of 
renewables and energy efficient technologies. New Zealand strongly encourages Malaysia to 
implement an energy subsidy rationalisation programme, while ensuring access to basic energy 
services for those in need.  WT/TPR/M/2 92/Add.1  
 
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  Malaysia considered u tilising the APEC Voluntary Peer Review for Reform of Inefficient Fossil Fuel 
Subsidies as a mechanism for assisting the design of a targeted and comprehensive fossil fuel 
subsidy rationalisation programme with well -designed transitional policies?  
Answer : 
Malaysia has embarked on subsidy rationalisation programmes similar to the 
recommendation by APEC Voluntary Peer Review for Reform of Inefficient Fossil Fuel 
Subsidies. The review recommends subsidies reduction to encourage energy efficiency, 
renewable ene rgy and its technologies which leads to a positive impact on international 
energy prices and security. These will also  reduce wasteful fossil fuel consumption, 
encourage efficient allocation of resources and help vulnerable groups in need of 
essential ener gy services.  
One of the five strategic pillars mentioned in the 10th Malaysia Plan and New Energy 
Policy (2010 -2030) is to gradually phase out energy subsidy especially through 
reviewing gas pricing to the power and non -power sectors every six months stee ring 
towards market price.  
WT/TPR/S/292, p.95, para 4.45  
Section 4 of the Secretariat's Report, page 95, para 4.45 notes that Malaysia provides its fisheries 
sector with fuel subsidies in addition to that provided through the automatic pricing mechanism 
(APM).  It is reported that this included for trawlers above 70 GRT until 31 May 2011 (paragraph 
4.26), which are the most efficient vessels (paragraph 4.21). The optimal yield of some fisheries 
are reported as being exceeded and Malaysia is a net importer of fisheries products (paragraphs 
4.21 and 4.22).  
Can Malaysia provide greater detail on current subsidies, support, and incentives provided to its 
fisheries sector including their magnitude over time, the recipients and how these support 
programmes are ad ministered?  
Answer : 
Detailed information on subsidies and incentives provided by Malaysian Government to 
the fisheries sector is available on the Department of Fisheries website at 
http://www.dof.gov.my  
Can Malaysia pl ease comment on how it reconciles subsidy programmes for the captive fisheries 
sector - which encourage enhanced fishing capacity and effort - with its attempts to address the 
serious problems of overfishing identified by the government in the sector?  
Answer: 
Malaysia subsidy programs for fisheries are limited in order to preserve the limited 
fishing resources.  
WT/TPR/S/292, p.104,  para 4.64  
Section 4 of the Secretariat 's Report, page 104, para 4.64 notes the steps taken by Malaysia to 
further liberalise trade in services.  
Can Malaysia provide any further information regarding progress with its study on domestic 
regulations for the services sector?   
Answer : 
The study on domestic regulations covered four selected services sector:  
 healthcare travel   WT/TPR/M/2 92/Add.1  
 
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   privat e higher education  
 technical and vocational education and training (TVET)  
 environmental services, focusing on renewable energy  
These sub -sectors have been identified as having high impact on the economy; they are 
fast-growing industries and are already bei ng exported. Most of these sub -sectors are 
already liberalised.  
Moreover, technical and vocational education and training (TVET) and environmental 
services, focusing on renewable energy were identified by the Government as having 
high impact on the economy ; they are fast -growing industries; and they have been 
liberalised.  
What scopes for streamlining regulatory regimes and possible improvements have been identified 
in the course of this review?  
Answer : 
Opportunity for Improvements identified in the followin g areas:  
a. Empower an agency/body to have a stronger oversight on the quality of regulations;  
b. Include requirement for  Regulatory Impact Analysis (RIA) in the legislation;  
c. Standardise procedures for public consultation;  
d. Adopt self -regulatory framework to fulf il the requirements of medical 
advertisements ' guidelines;  
e. Review medical services advertising guidelines to effectively market healthcare 
services;  
f. Develop framework for the supervision of health facilitators to ensure good ethical 
practices;  
g. Employ a reg ulatory risk differentiation approach in regulating private higher 
education institutions;  
h. Single quality assurance body for all higher education in Malaysia; and  
i. Improve information accessibility of the Feed -in-Tariff (FiT) system.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM NORWA Y 
Page 116, Para 4.7.5  
We note that it was announced in the Prime Minister 's 2014 Speech that regulations and laws 
would be reviewed as part of a broader effort to develop a more efficient logistics sector. We would 
be interested in hearing more about the c ontent of these plans and what time -frame Malaysia has 
foreseen.  
We would also be interested in receiving more detailed information about the announced Maritime 
Development Fund, which will provide financing to support the development of the shipping 
indus try, shipyard construction, oil and gas, and maritime -related support activities.  
Answer : 
The review of the laws and regulations related to the logistics sector are ongoing. The 
National Logistics & Trade Facilitation Master Plan is sc heduled to be complet ed in 
June  2014.  
The Maritime Development Fund  is to assist existing and new companies involved in 
shipping, shipyard, marine and oil & gas related activities and services, such as 
acquisition, shipyard construction, warehousing and maritime activities. Co mpanies can 
avail themselves to both Islamic and Conventional financing at market rates.  
Page 118, Para 4.125  
We have taken note of the positive liberalization steps taken in 2009, when maritime agency 
services and vessel salvage and refloating services w ere opened for 100% foreign equity 
participation.  
We would like to hear if Malaysia is considering to open up for similar foreign equity participation 
in other maritime auxiliary services, such as Maritime cargo handling services and maritime freight 
forwarding services . 
Answer:  
Currently, Malaysia has no plans to open up the Maritime Cargo Handling Service and 
Maritime Freight Forwarding Services.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM PAKIS TAN 
Para 2.35   
The Secretariat Report describes economic activities where FDI limits ide ntified in the context of 
this Review were in the areas of: fisheries, energy, telecoms, air transport, and maritime 
transport. Could Malaysia explain the rationale for FDI limits in these activities?  
Answer:  
Foreign participation is allowed under the Rene wable Energy Act 2011 but there are 
elements of restriction for foreign ownership as prescribed in the subsidiary legislation 
of the Act. The restriction is to allow local RE companies to grow with the current 
conducive environment provided by the Governme nt. Malaysia would consider removing 
the restriction once the RE industry is fully developed and a level playing field for all 
parties has already been established.  
Due to strategic and national interest, the sub -sectors related to maritime transport 
service sector still have a limitation/restriction particularly on foreign equity 
participation. The restrictions are also imposed for air transport service sector  as it is a 
strategic sector and is of national interest.  
Section 15 of the Fisheries Act 1985 al lows no fishing activities to be conducted by 
foreign fishing vessels in the Malaysian Fisheries Waters unless authorized. The 
rationale for such a restriction lies in the coastal State 's sovereign rights over its natural 
resources in the Exclusive Economi c Zone as provided for under UN Convention on the 
Law of the Sea, 1982.  
Page 73 footnote 172  
1. The Secretariat Report notes (page 73 footnote 172) that Malaysia has achieved high levels of 
compliance in a number of key areas, both fundamental and more sophis ticated, like the 
prohibition of insider trading and implementation of high -quality accounting standards.  
Could Malaysia share with us about the measures through which it was able to control, in 
particular, insider trading?  
Answer:  
Malaysia views insider trading seriously and continues to actively enforce such breaches 
to maintain investor confidence in the capital market.  
Insider trading is mainly governed by Part V of the Capital Market Services Act (CMSA) 
2007 and Chapter 9 of the Bursa Malaysia (Bursa ) Listing Requirements. These 
provisions prohibit an insider from either directly or indirectly, trading or procuring the 
trading in securities or communicating information which would have material effect on 
the price of the securities to another person w ho is then likely to trade or cause to be 
traded, securities to which the said information relates. The CMSA provides for who is an 
insider and what constitutes information having a material effect on the price of 
securities.  
Control of insider trading is  achieved through continuous surveillance of the market and 
active enforcement of any breaches. Both SC and Bursa engage in real time surveillance 
of potential irregularities in trading patterns and share price movements, with special 
attention given to tr ading by insiders. Further, the SC has, in addition to criminal 
prosecution, taken various enforcement actions in response to possible market 
manipulation and insider trading activities including a number of civil actions and 
regulatory settlements.  
Under  the CMSA 2007, there are several provisions setting out the SC 's powers in taking 
action against insider trading. The first is by enforcing criminal sanctions under WT/TPR/M/2 92/Add.1  
 
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  section  188(4) of the CMSA 2007 which provides that any person, who contravenes 
section 18 8(2) or (3), commits an offence and shall be punished on conviction with 
imprisonment for a term not exceeding ten years and to a fine of not less than one 
million ringgit.  
Secondly, by civil actions and regulatory settlements pursuant to sections 201(5) and 
(6) of the CMSA 2007. In this instance the SC may, if it considers in the public interest to 
do so, recover by civil action against the insider or any other person involved in the 
contravention, a sum equal to three times the amount being the differenc e between the 
price at which the securities were acquired or disposed and the price at which the 
securities were likely to have been acquired or disposed, had the inside information 
been generally available.  
Further, the SC can also claim civil penalty in  such amounts as the court considers 
appropriate having regard to the seriousness of the contravention, being an amount not 
more than one million ringgit.  
Page 38 Para 3.10  
The Secretariat Report notes with reference to IP enforcement, that issues remain,  including the 
relatively widespread availability of pirated and counterfeit products, high rates of piracy over the 
Internet, and continued problems with book piracy, adding that transhipment as Malaysia is 
considered as one of the significant East Asian departure points for counterfeit goods. What, in 
particular, has been Malaysia 's success with Basket of Brands (BOB) scheme to protect companies 
against the sale of counterfeit goods?  
Answer:  
A Forensic Unit was established to monitor internet activities a nd websites offering 
infringing goods. A number of websites were blocked and disabled in order to curtail 
internet piracy activities.  
MDTCC is also in collaboration with book publishers and distributors both domestic and 
foreign such as the American Associ ation Publishers to deal with book piracy. 
Enforcement actions are taken against the printing and selling of infringing books.  
The MDTCC Basket of Brands (BOB) program has successfully protected companies from 
counterfeits.  
Under BOB, trade mark owners are  not required to visit all 73 branch offices throughout 
the country for verification. Actions are taken proactively without trade mark owners 
having to lodge complaints, or be physically available at all times, except when the case 
is brought to court. Sin ce its commencement, 32 companies have registered 213 
trademarks under BOB. A total of 564 cases have been taken since November 2011 with 
9 cases taken in 2014. Although MDTCC advocates BOB for fast action, the Ministry 
continues to protect all trade mark owners. However it requires the unregistered owners 
to personally lodge complaints and conduct physical verification.  
Referring to a time release study (TRS) in 2011, the Secretariat Report points out problems in 
areas relating to customs regulations and l egislation, delays in payment of duty/tax, removal time 
of perishable consignments arriving by air, timing of submission of customs declarations, time for 
responding to rejections and queries raised by Customs, late physical removal of goods after 
release of customs documentation, minor process inefficiencies, no increase in RMCD resources, 
and longer processing time of consignments subject to preferential tariff rates. How does Malaysia 
plan to address these problems?  
Answer:  
Malaysia is taking steps to a ddress the problems raised. One of the initiatives that is 
being developed to improve matters related to Customs, is the U -Customs initiative, 
which is expected to be ready by 2016.  WT/TPR/M/2 92/Add.1  
 
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  U-Customs is a comprehensive integrated system which aims to facilitate tr ade by 
allowing traders to submit all import, export, and transit information required by 
regulatory agencies via a single electronic gateway. The project is intended to eliminate 
the need to process and submit the same information numerous times to differ ent 
government entities, including some that are automated and others that still rely heavily 
on paper.  
Areas where improvement is on -going are:  
 Amending relevant laws and regulations in order to speed up approval process.  
 Providing for a one -stop centre for or coordination in examination of goods involving 
other government agencies, which is currently being implemented.  
 Ensuring customs brokers/agents speed up cargo delivery after customs release by 
imposing fees/charges relating to demurrage and storage for late clearance.  
Page 41, para 3.22   
By according varied and substantial levels of protection to selected industries, tariffs distort 
resource allocation and competition. The Secretariat Report recommends that reducing high tariffs 
(mainly the out -of-quota agricultural duties) would improve Malaysia's resource allocation and 
national welfare. Does Malaysia have plans to reduce the high tariffs in question?  
Answer:  
Malaysia has reduced the out quota tariff to FTA partners as part of a special concession.  
However, Malaysia still retains the out quota tariff for MFN.  
Page 42, Para 3.23  
The complexity of the tariff structure remains relatively unchanged since 2009; there are some 51 
(52 in 2009) different rate bands, and the Secretariat Report recommends tha t the Malaysian tariff 
could be further rationalized, for example, by reducing the number of rate bands. Is Malaysia 
considering reduction in tariff bands?  
Answer:  
Malaysia continuously reviews its tariff structure to be in line with WTO commitments,  
and may reduce the tariff bands if deemed necessary.  
Page 43, para 3.24  
Non-ad valorem duties, which are maintained almost exclusively on agricultural products (79 of 
the 83 nine -digit HS tariff lines) to protect small and rural farmers tend to conceal high ta riff 
protection. Does Malaysia plan to convert these tariff lines to ad valorem? If not, the reason for 
not doing so?  
Answer:  
Currently, Malaysia does not have any plans to convert non -ad valorem  duties to 
ad valorem  duties. Malaysia  continues to maintain  non-ad valorem  duties for agriculture 
products to protect rural farmers and small holder farmers.  However, Malaysia is 
currently reviewing the non -ad valorem  duties in line with the on -going Doha 
negotiations.  
Page  3 Para  3.8 
Preferential government procu rement procedures and expanded countertrade/offset requirements 
remain an instrument of industrial policy to favour locally owned businesses; international tenders WT/TPR/M/2 92/Add.1  
 
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  are invited only if goods and services are not available locally, adding that during the per iod under 
review, significant changes were brought to the legal and institutional framework governing 
competition policy, which also covers GLCs but not certain anticompetitive practices. Why has 
competition policy been kept out of the institutional framew ork as stated?  
Answer:  
Government procurement is generally excluded from the application of Competition Act 
2010. This is consistent with the stance adopted by other established jurisdictions in 
defining activities by the government (Government Procurement ) as non -commercial in 
nature.  
Page 71, Para 3.107  
The Secretariat Report refers to the OECD, that evidence suggests that open competition in 
Malaysia remains elusive, adding a case that Some industry players have alleged that the 
Government's "adoption" of some bumiputera pharmaceutical companies...do not have to 
participate in an open tender for the product, also negotiate directly on price with the ministry. 
Does Malaysia concur with the assessment and whether any remedial measures are under 
considerati on? 
Answer:  
Malaysia is committed to promoting and developing the competitiveness of the local 
pharmaceutical industry. However, to ensure value for money and fair competition with 
other players, the Government also procures medicines through open tender.   
Page 51, para 3.45  
The Secretariat Report notes that a Malaysian Protocol for Halal Meat and Poultry Production was 
implemented from August 2011. Since then, concerns have been raised about the protocol, on 
several occasions, by Argentina, Brazil, the Un ited States, and the European Union, in the WTO 
Committee on Technical Barriers to Trade. What steps in any, does Malaysia envisage to allay the 
concerns?  
Answer:  
The concerns issued by Argentina, Brazil, the United States and the European Union on 
the Mal aysian Protocol for Halal Meat and Poultry Productions was answered in 2011 
through Malaysia 's SIRIM TBT enquiry point to the enquiry point of each country 
concerned.  
All the concerns were discussed with all Malaysia 's related agencies through an 
appointed  Committee chaired by the Department of Standards Malaysia. All the 
comments were thoroughly reviewed and the answers were communicated to countries 
concerned.  
Malaysia also co -operates bilaterally with each country such as the United States and 
European U nion (EU) in clarifying the issues related to the respective regulations raised 
by the countries.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM PERU  
3.2.5 Normas y otros requisitos técnicos  
1. ¿Cuál es el período promedio que Malasia posee entre la publicación de un reglamento técnico 
y su entrada en vigor?    
Answer : 
A minimum of 6 month grace period is required prior to entry into force.  
3.2.5.1 Normas, pruebas y certificación  
2. Párrafo 3.40: ¿En qué medida el Plan de Acción Nacional sobre Normas y Estrategia de 2004 
sirve de orientación p ara potenciar las actividades de normalización?  
Answer : 
The National Standards Strategy and Action Plan aims to promote national standards 
development and promotional activities.  
3. Párrafo 3.42: ¿En qué consisten los reglamentos técnicos específicos?  
Answe r: 
Technical regulations are issued for each mandatory standard.  
4. Párrafo 3.42: ¿Cuáles son los principales sectores en los que Malasia ha alineado sus 
reglamentos técnicos con estándares internacionales?  
Answer : 
The technical regulations for all sectors i ncorporate both the Malaysian and international 
standards.  
3.2.5.1.2 Certificación halal  
5. Párrafo 3.45: ¿Cuáles serían los criterios que adoptaría Malasia para la concertación de 
acuerdos de reconocimiento mutuo con organismos de normalización extranjeros c on respecto 
a la normalización y la inspección relativas a la certificación halal?  
Answer : 
All countries can request for an MRA or a Mutual Arrangement on halal cooperation. 
However, the MRA will be based on an equivalence basis including the locus standi , 
similarity of the standards and the nature of operation of the agencies.  
The Department of Islamic Development Malaysia (JAKIM) has developed a recognition 
scheme to appoint reputable and reliable foreign halal certification bodies to monitor the 
Halal  status of the raw materials as well as finished products to be exported to Malaysia. 
The procedure can be accessed at:  
http://www.halal.gov.my/v3/images/stories/pdf/cb%2 0procedure28012014.pdf  or 
http://www.halal.gov.my/v3/index.php/en/guidelines/international -islamic -bodies   
3.2.5.1.5 Transparencia  
6. Párrafo 3.49: ¿Permite Malas ia la participación de sectores interesados pertenecientes a otros 
países en la elaboración de un reglamento técnico?  WT/TPR/M/2 92/Add.1  
 
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  Answer :  
During development of standards, the public, including interests of other countries are 
considered in the adoption of new or rev ised standards through the "public comment" 
procedures on any draft standards and it is publicly available on the website.  
3.2.5.2 Reglamentación sanitaria y fitosanitaria  
7. Párrafo 3.53: ¿En qué consiste la modificación referida a la lista de los delitos co n posibilidad 
de conciliación, realizada al Reglamento de Higiene Alimentaria en el año 2009?  
Answer:  
In this period under review , there were two amendments made under the Food Hygiene 
Regulations 2009 :  
 Editorial amendment on storage temperature of froz en food – the words "between 
the temperature of minus 18ºC" was amended to "at or below the temperature of 
minus 18ºC"; and  
 Insertion of "Regulation 30: Failure to comply with requirements relating to food 
handler training" in the Fourth Schedule [Regulati on 58] on compoundable offences.  
Note : Regulation 30, Food Hygiene Regulations 2009 stipulates that all food handlers 
shall undergo a food handlers training in, and obtain a Certificate of Food Handlers 
Training from, an institution specified by the Direct or. The Minister may, if he thinks 
necessary, require any food handler to attend any additional training for food handlers. 
All food handlers who fails to undergo a training or obtain a certificate or fails to attend 
additional training if required, commit s an offence and shall on conviction, be liable to a 
fine not exceeding ten thousand ringgit or to imprisonment for a term not exceeding two 
years.  
3.4.4.1 Política de competencia  
8. Pár. 3.107. ¿Por qué la Ley de Competencia adoptada el 6 de mayo de 2010 no incluye las 
prácticas, acuerdos o actividades comerciales contrarias a la competencia de los sectores 
energía y comunicaciones?  
Answer : 
As provided under section 3 and as specified under the First Schedule of the Competition 
Act 2010 (CA 2010), commercial  activities under the sectors of Communications and 
Multimedia Act 1998 and the Energy Commission Act 2001 will be excluded from the CA 
2010 mainly because there already exists provisions related to competition under those 
Acts. However, market dominance i n other sectors, can be addressed when an 
enterprise abuses its dominant position.  
In ensuring the effective enforcement of competition law and policy while maintaining 
consistency in its application, a Special Committee on  competition was established 
in 2012. Any issues related to the sectors but exempted from the Competition Act 2010 
are addressed in this Special Committee.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM  THE PHILIPPINES  
Page 15, paragraph(s) 3.12; Report by the Secretariat, page 104, paragraph 4.64  
The Philippines note s Malaysia 's further liberalisation of 18 service sub -sectors in 2012 in 
additional to the 27 services sub -sectors that were autonomously liberalised in 2009. In 2012, the 
Government embarked on a study to formulate a Services Sector Blueprint.  
Could Malay sia provide additional or supplementary information on the said Blueprint and the 
salient features and improvements it provides?  
Answer:  
The Services Sector Blueprint  provides policy direction and strategies to accelerate the 
growth of the services sector.  It focusses on the growth quality as well as the shift 
towards more knowledge -intensive and higher value added services sector. In addition, 
focus is also given on enhancing productivity and export growth of the sector. 
Recommendations from the Blueprint will support Malaysia 's aspiration to become a 
high-income nation by 2020.   
Pages 10 -11, Paragraph(s) 2.30, 2.32 and 2.38; Report by the Secretariat, Pages 31 -32, 
Table 2.2  
Philippines notes the separate comprehensive bilateral agreements of Malaysia with Australia 
(MAFTA) and New Zealand (MNZFTA) that complement the already established ASEAN -Australia -
New Zealand FTA (AANZFTA). Table 2.2 has also provided the main features of the aforementioned 
free trade agreements.  
Could  Malaysia provide additional or su pplementary information on how MAFTA, MNZFTA and 
AANZFTA complement each other?  
Answer:  
Information on MAFTA and MNFTA is available at  www.miti.gov.my ; while information 
on AANZFTA is also available on the ASEAN Secr etariat webpage.  
The bilateral agreements allow Malaysia to seek specific commitments in areas of 
interest to both parties, while the ASEAN agreement is a negotiated regional outcome. 
Nevertheless, the business community has the choice to utilise either bi lateral FTA or 
the regional FTA that benefit them most.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM SINGA PORE  
Page 19, Para 1.18   
We noted that Malaysia has an increased emphasis on revamping efforts in privatisation especially 
for Government Linked Companies. We would like to know if there are more visible details or 
announcements (specific timelines, sectors involved) as these would have implications for foreign 
investors who are keen to work with such companies.  
Answer:  
Malaysia remains committed to gradually reducing its particip ation in business activities 
with a view to achieving the following objectives:  
 Increasing the role of the private sector in economic development (private sector -led 
economy);  
 Reducing the burden on the Government 's fiscal budget; and  
 Improving the produc tivity and efficiency of entities.  
Government and state -owned assets will also be divested accordingly under the 
Strategic Reform Initiative (SRI) to reduce the government 's role in business and to 
create a competitive environment for businesses. However, the divestment and 
privatisation process are undertaken in a timely manner in order to ensure maximum 
return for the Government. The Government will also continue to hold assets which are 
deemed strategic to national interests or public service delivery by  adopting less 
invasive strategic control methods such as golden shares.  
Nevertheless, the Government will continue to monitor the divestment initiatives to be 
in line with the Government 's efforts to facilitate a competitive environment for 
business and t o strengthen the private sector 's role in driving the economy.  
Page 20, Para 1.22  
The report states that Malaysia remains one of the world 's largest importers of foreign labour, 
which keeps labour costs in check. We understand that Malaysia also has plans  to regulate foreign 
workers ' participation in the economy. Could Malaysia share additional information on its foreign 
labour policy (especially if it impacts foreign investments) and how Malaysia intends to balance its 
local and foreign workforce in the f uture, especially the industry sectors that will not allow foreign 
workers participation?  
Answer:  
Employment of Malaysians and creation of skilled employment remains a key priority for 
Malaysia. However for sectors that remain labour intensive and for sect ors where no 
Malaysians are willingly to work in, consideration will be given for the employment of 
foreign workers. In addition, measures have been taken to encourage employers to 
move towards automation, and enhance skills of workers through training.  
Page 37, Para 3.5  
Support is available for exports of certain fresh and dried fruits, fresh and dried flowers, 
ornamental plants and ornamental fish, and manufactures in the form of statutory income tax 
exemptions ranging from 10% to 50% of the value of incr eased exports, depending, inter alia, on 
the activity, value -added and/or ownership. This income tax exemption appears to be contingent 
upon the value of increased exports. Can Malaysia share additional information on how this income 
tax exemption works?  WT/TPR/M/2 92/Add.1  
 
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  Answer:  
As we are moving toward a high income nation or developed country, it is very 
important for Malaysia to increase participation in international trade. The initiative is to 
encourage Malaysian companies especially SMEs to be more active in internatio nal trade 
thereby adding greater value to their products.  
Page 38 -39, Para 3.12  
We would appreciate if Malaysia could share more details on your e -permits (i.e. paperless) 
customs clearance process and the involvement of the 26 agencies in the approval pr ocess.   
Answer:  
Malaysia 's National Single Window (NSW) has been fully operationalized since 
September 2009 with 26 PIA 's on board. Currently NSW offers 6 core services with the 
inclusion of ePermit for Strategic Trade Act (ePermitSTA) that has been functi oning and 
available through myTRADELINK portal ( http://www.mytradelink.gov.my/ ). 
Both traders and forwarding agents can apply for and obtain permits online. PIAs, 
meanwhile, will verify and approve the applica tions, and then send the approved 
permits to relevant parties, all electronically.  
We would also like to understand whether the 44 Permit Issuing Agencies would recognise the 
Authorised Economic Operators (AEOs) as being of lower risk and take their statu s into 
consideration when issuing e -permits.  
Answer:  
Yes the 44 PIAs would recognize the AEO companies as high compliance entities and 
their status taken into consideration when issuing e -permits. This is due to the fact that 
the PIA 's are involved and con sulted during the initial auditing prior to accreditation of 
AEO.  
We note that that Royal Malaysian Customs Department (RMCD) is negotiating a Mutual  
Recognition Arrangement (MRA) with Japan Customs. We would like to understand the key 
elements underpinnin g Malaysia 's approach to negotiating and implementing MRAs.  
Answer:  
The negotiation for AEO MRA with Japan is to provide arrangement for Malaysian 
Customs and Japan Customs to recognize each other 's audits, controls and 
authorizations as equivalent and th erefore provide reciprocal benefits to AEOs.  
Page 39, Para 3.13  
We note that RMCD has replaced Customs Golden Clients (CGCs) with AEOs. We would appreciate 
further elaboration on the difference in the 2 programmes.  
Answer:  
CGC was the initial phase in im plementing the concept of the SAFE Framework of 
Standards; however, there was no element of security or consultation with traders when 
accrediting the CGC Status.  Accreditation of CGC was awarded for companies with only 
high compliance with Customs legal a nd regulatory requirements and there was no 
auditing on security requirements. Vetting on compliance was only done via the customs 
enforcement division to ensure directors and managements of business entities have not 
violated any customs laws and regulati ons. Companies with CGC Status were advised to 
implement and enhance their security features before being accredited to AEO status.  WT/TPR/M/2 92/Add.1  
 
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  AEO programmes were developed with more comprehensive security criteria and there 
were more consultation between the busines ses and Malaysian Customs, especially in 
ensuring compliance with security requirements in tandem with the WCO SAFE 
Framework of Standards (FOS). Auditing on company is done by the auditing team 
comprising the PCA division, AEO unit as well as vetting by t he enforcement unit.  
Page 45, Para 3.30  
Full exemptions from sales tax and excise duties are granted to locally purchased 
machinery/equipment. Can Malaysia share additional information on the conditions where full 
exemptions from sales tax and excise duti es are granted?  
Answer:  
With the upcoming GST implementation, the issue raised is no longer valid.  
Page 50 -51, Para 3.44 -3.45 
All meat, processed meat products, poultry, and egg products, domestically produced or imported, 
must receive halal certification from JAKIM or any foreign halal certification body recognised by 
JAKIM prior to importation and distribution in Malaysia.  
A wide range of Halal certification requirements have been in place since the previous TPR, and 
mandatory labelling of food and food ingredients obtained through modern biotechnology, which 
were gazetted on 8 July 2010, will be implemented from 8 July 2014; these requirements apply to 
both domestic and imported products.  
Can Malaysia share the guidelines and procedures to obtain Halal certification and the average 
processing time for a foreign exporter to obtain a Halal certification in order to be able to export 
meat products into Malaysia?  
Answer:  
Further information can be accessed at:   
http://www.dvs.gov.my/documents/10157/95bd5091 -9592 -4bb5 -9ae3 -d6f049ede111 .  
The import protocol may be accessed at:   
http://www.dvs.gov.my/en/import -and-export .  
In addition to that, the halal requirements for imported halal meat, processed meat 
products, poultry, and egg products to Malaysia will also be based on Malaysia Protocol 
for Halal Meat and Poultry Productions which may be accessed at:  
http://www.halal.gov.my/v3/index.php/ms/garis -panduan/malaysia -protocol -for-
halal -meat -and-poultry -productions -2011 .  
Page 54 -57, Par a 3.60 -3.69  
We noted the efforts in enhancing the transparency of government tenders process with the set -up 
of MyProcurement portal. However, the website is in Malay. We would like to find out Malaysia 's 
future plans to enhance the website so that inform ation is available in both English and Malay. In 
addition, could Malaysia also share on its efforts to improve accessibility to information on the 
process for bidding for government projects open to international bidders?  
Answer:  
For international tenders , potential bidders are invited through their respective 
embassies in Malaysia. Notice of international tenders will be advertised and published 
online through the MyPROCUREMENT portal. The tender procedures are similar to 
domestic tender procedures except  for notice of international tenders.  WT/TPR/M/2 92/Add.1  
 
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  Page 58, Para 3.73   
We note that the Customs (Prohibition of Exports) Order 2012 (effective March 2013) sets out 
current export prohibitions, restrictions, and licensing requirements. As from 2011, exports of 
certain subsidised essential items subject to export permit or approval have been prohibited. As of 
March 2013, exports of two product categories (poisonous chemicals/minerals, natural sands) are 
prohibited. Over the recent festive period, Malaysia has also impose d export restrictions on food 
items such as fish. Could Malaysia share the circumstances surrounding the imposition of such 
restrictions and clarify how long these restrictions will be in place for?  
Answer:  
One reason Malaysia imposes restrictions on the export of natural sands, among others, 
is that Malaysia 's sources of natural sands is getting limited.  
Malaysia however has no restrictions on the export of silica sand which is of high quality 
and is used in the manufacturing industry. Malaysia has impose d certain restrictions on 
exports of food items during the festive seasons to ensure adequate local supply during 
the period.  
Page 59, Para 3.77  
According to the authorities, Malaysia grants no direct export subsidies or tax concessions to 
exporters, but incentives (for example, the tax incentive of double deduction for export promotion) 
are given to encourage companies to seek new export markets (section 3.3.8). Can Malaysia share 
additional information on the mechanisms and conditions for granting of suc h incentives to 
encourage companies to seek new export markets?  
Answer:  
Export incentives are provided to encourage Malaysian companies to be more active in 
international trade, diversifying into new markets and adding greater value to the 
products export ed. The objective is also to encourage local companies especially SMEs 
to move up the value chain. The application for tax exemption is made directly to the 
Inland Revenue Board.  
Page 59, Para 3.78  
Support is available in the form of statutory income tax exemption, based on the value of 
increased exports. A manufacturing company or a company engaged in the production of fresh and 
dried fruits, fresh and dried flowers, ornamental plants, and ornamental fish may benefit from a 
tax exemption on its statutory income equivalent to 10% of the value of its increased exports. In 
manufacturing, companies are also eligible for tax exemption on statutory income, equivalent to 
10% or 15% of the value of increased exports, provided that the goods exported attain at leas t 
30% or 50% value -added, respectively. Under the National Automotive Policy (NAP) (section 4.6), 
for the period 2010 -14 companies in the automotive industry qualify for tax exemptions on 
statutory income equivalent to 30% or 50% of the value of increased exports, provided that the 
goods exported attain at least 30% or 50% value -added respectively. To further encourage the 
export of Malaysian goods, locally owned manufacturing companies with Malaysian equity of at 
least 60% are eligible for tax exemption on  statutory income equivalent to 30% of the value of 
increased exports, provided that the company achieves a significant increase in exports; this rate 
is raised to 50% in case the company succeeds in penetrating new markets, and to full tax 
exemption if it  achieves the highest increase in export in its category. No information on the main 
beneficiaries of each of these incentives or estimates of forgone tax revenue relating to their 
implementation since 2010 was available from the authorities. Can Malaysia share who are the 
main beneficiaries of each of these incentives and estimates of forgone tax revenue?  WT/TPR/M/2 92/Add.1  
 
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  Answer:  
The tax exemption on the Value of Increase Exports of Vehicles and Parts/ Components 
which was introduced under NAP 2009 was not implemented. The  incentive is not 
continued under the NAP 2014.  
Page 60, Para 3.80   
It is reported that there are no federal or main coordinating body who oversees the development 
of the free industrial zones (FIZs). How does an area or development get gazetted as a FIZ a nd 
who is the overarching authority? Are there any future plans for new FIZs?  
Answer:  
Any person, private sector, state government or other government agency may apply to 
the Ministry of Finance to develop an area as FIZ and subsequently upon approval by t he 
Minister of Finance, the area will be gazetted. As such the overarching authority is the 
Ministry of Finance.  
Any future plans for new FIZs will depend on applications forwarded to MOF for 
consideration by the Minister of Finance.  
Page 64, Para 3.93   
In addition to wide -ranging tax incentives (sections 3.3.5, 3.3.6 and 3.4.1.3) the Government 
continues to provide non -tax support in the form of funding assistance (e.g. soft loans) and 
subsidies to support the implementation of different policy objectives ; some are directed to 
majority Malaysian -owned firms. No appraisal of the cost -effectiveness of this type of support has 
been undertaken so far.  May we understand exactly how the mechanism of funding assistance, 
including soft loans, works, please?  
Answer : 
More information on the Domestic Investment Strategic Fund (DISF) is available at : 
http://www.mida.gov.my/ .  
Page 104, Para 4.64  
In 2012, the Government embarked on a study to formulate a Services Sector Blueprint , which will 
serve as an input into the 11th Malaysian Plan (2015 to 2020). According to the authorities, the 
Blueprint will be aimed at transforming the services sector and accelerating its growth. Focus will 
be given to developing more knowledge -intensiv e and higher -value -added sectors through reforms 
to targeted services sectors and the acceleration of internationalisation of services providers.  
Could Malaysia share further details on this Service Sector blueprint especially, the timeline for 
implementa tion? 
Answer:  
The Services Sector Blueprint provides policy direction and strategies to accelerate the 
growth of the services sector. It focusses on the growth quality as well as the shift 
towards more knowledge -intensive and higher value added services se ctor. In addition, 
attention is also given to enhancing productivity and export growth of the sector. 
Recommendations from the Blueprint will support Malaysia 's aspiration to become a 
high-income advanced nation by 2020.  
Page 7, Para 2.10 -2.12  
We noted Ma laysia is pursuing a broad strategy on Customs Modernisation process. We would 
appreciate it if Malaysia could elaborate on:  WT/TPR/M/2 92/Add.1  
 
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  i. What does the area of 'output/outcome development ' entail?  
ii. What is the 'declaration via self  assessment mechanism ' and Project u -Customs?  
iii. How does the 'self-assessed declaration on import, export, and movement of goods 
periodically ' under the AEO programme work?  
Answer:  
i. Output/outcome development refers to the final end outcome that is required by the 
stakeholders;  
ii. uCustoms promotes self-assessment mechanism via its portal; and  
iii. Self-assessed declaration on import, export, and movement of goods periodically ' 
defined under the AEO programme means the operator is:  
 to submit electronically minimum data in the form of Permission Request S lip 
(PRS) for customs clearance;  
 not subject to physical inspection (except on specific reason) on his cargo i.e 
customs release via green lane, for import, export and bond -to-bond movement;  
 required to submit electronically a periodic self -assessment decl aration on 
import/export/movement known as the Consolidated Statement (CS), based on 
specified schedules.  
 allowed deferred duty payments via electronic Fund Transfer (EFT) done 
periodically with the CS . 
Page 18, Para 4.7 -4.9  
We would appreciate if Malaysia  could share more on the Strategic Trade Act (STA) 2010:  
i. When was the STA 2010 fully implemented and enforced?  
ii. Can Malaysia share more details on how you facilitate your industry 's compliance with the Act?  
iii. Is the on -line permit application system owned by  MITI and the data shared with Customs? 
Are there other Government agencies involved in the processing of permits?  
iv. What were the key challenges encountered in the implementation of the STA?  
Answer:  
The Strategic Trade Act (STA) 2010 was approved by Parlia ment on 6 May 2010. It was 
published in the Government gazette on 10 June 2010 and enforced on 1 April 2011. 
Subsidiary legislations were gazetted on  31 December 2010, namely the:  
i. Strategic Trade (United Nations Security Council Resolutions) Regulations 20 10 
-  To implement measures decided by United Nations Security Council related  to 
non-proliferation of weapons of mass destruction.  
ii. Strategic Trade Regulations 2010  
-  Prescribes forms, fees, procedures, conditions for non -requirement of permit 
(exemption) fo r transit and transhipment and the list of military and strategic 
items to which permits are required in all situations.  WT/TPR/M/2 92/Add.1  
 
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  iii. Strategic Trade (Restricted End -Users and Prohibited End -Users) Order 2010  
-  Provides lists of individuals, entities, countries and dest inations that are 
designated as prohibited end -users for all export, transit and transhipment of 
strategic items or unlisted items and restricted end -users for which a special 
permit is required.  
iv. Strategic Trade (Strategic Items) Order 2010  
-  Lists out the  strategic items that are controlled which includes dual use items 
and military items.  
The Strategic Trade Secretariat (STS) was established in MITI in October 2010 to 
spearhead the implementation of the Act. Besides STS, other agencies involved in the 
processing of permits include:  
i. Atomic Energy Licensing Board  
ii. Malaysian Communication and Multimedia Commission  
iii. Pharmaceutical Services Division, Ministry of Health  
In facilitating our industry to comply with STA, we undertake the following measures:  
i. Adopt th e European Union control list, as it is widely known and accepted in many 
countries including Hong Kong and Singapore. The industry is responsible to 
determine whether or not their products fall under STA Strategic Items List, however 
STS does provide assi stance in product classification where necessary.  
ii. Provide general exemption for transit and transhipment in the Free Commercial 
Zones subject to conditions specified.  
iii. Conduct on -going reviews and improvement in the operational guidelines, including 
amendme nts to the Strategic Trade Regulations 2010.  
iv. Provide advice for industry to adopt the Internal Compliance Programme.  
v. Utilise online system for permit application. The system is managed by a private 
company appointed by the Government of Malaysia and partia lly integrated with the 
Customs declaration system.  
vi. Conduct continuous outreach programmes throughout Malaysia including a monthly 
STS-Industry Dialogue held in the Secretariat 's office.  
The most important challenge to Malaysia in the implementation of STA  is striking the 
balance between national and international security as opposed to developing and 
sustaining economic growth through international trade. Hence, STS 's tagline introduced 
and used until today is 'Facilitating trade in a secure trading enviro nment '.  
Since export control or strategic trade control is very new to Malaysia, we realise the 
lack of expertise and experience within the relevant authorities to implement STA 
especially in the area of intangible technology transfer, brokering, transit and 
transhipment.  
Another challenge is to have concerted effort and inter -agency coordination to ensure 
effective licensing procedures and enforcement of STA. With this objective in mind, the 
Strategic Trade Action Committee comprising all relevant author ities was formed to 
discuss policy recommendations and implementation issues.  WT/TPR/M/2 92/Add.1  
 
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  Finally, the implementation of STA requires close cooperation with international 
organisations and foreign governments. This includes obtaining assistance and funds in 
the capac ity-building and outreach programmes as well as sharing intelligence 
information and enforcement activities.  
More information on STA  is available at MITI's website www.miti.gov.my . WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM SWITZ ERLAND  
3.2. Mea sures directly affecting imports  
3.2.2 Tariffs  
3.2.2.1 Applied MFN tariffs  
According to Para. 3.22, Malaysia abolished or reduced import duties for about 300 tariff lines 
since the last Review of Malaysia. However, varied and substantial levels of protec tion are still 
accorded to selected industries, which seem to distort resource allocation and competition. Does 
Malaysia plan to further reduce high tariffs . 
Answer : 
Tariff reduction is an on -going process and any reduction will be done in consultation 
with the various stakeholders involved.  
According to para. 3.23 the Malaysian tariff contains 51 different rate bands. Does Malaysia plan to 
simplify its tariff by reducing the number of rate bands?  
Answer : 
Malaysia is continuously reviewing its tariff struct ure to be in line with WCO 
commitments.  
Page 54, Para 3.61  
Para. 3.61 mentions that the Malaysian authorities are of the view that the country has not yet 
reached the level of economic development that would enable it to benefit from a participation to 
the GPA agreement. In your view, what conditions need to be fulfilled so that the Malaysian 
economy can benefit from a GPA accession and an opening of its procurement markets?  
Answer : 
By becoming an observer, Malaysia hopes to achieve maximum benefits throu gh the 
discussion and deliberation of the Committee meeting including learning and having a 
better understanding of the WTO GPA text. Malaysia also has the opportunity to learn 
from the experiences of other Observers who applied for accession to WTO GPA an d 
from the WTO GPA Parties.  
Malaysia will have to assess the readiness of its domestic industries to tap possible 
benefits and its government agencies commitments to the obligations stipulated under 
the WTO GPA obligations. This exercise is crucial before a decision can be made for 
Malaysia to consider accessing to the GPA.  
Page 56, Para 3.65  
Para. 3.65 states that international tenders are invited when domestic goods and services are not 
available. What are the respective procedures for such tenders?  
Answer: 
For international tenders, potential bidders are invited through their respective 
embassies in Malaysia. Notice of international tenders will be advertised and published 
online through MyPROCUREMENT portal. The tender procedures are similar to domesti c 
tender procedures.  WT/TPR/M/2 92/Add.1  
 
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  Page 57, Para 3.69  
Para 3.69: Malaysia is participating in different international processes with regard to government 
procurement, such as APEC or UNICITRAL. How do the results of these international processes 
affect Malaysia's legis lation?  
Answer : 
Malaysia is not a party to any international arrangement on Government Procurement. 
However, Malaysia 's government procurement practices are benchmarked against 
international organisation such as UNICITRAL and UNDP. In addition, our partici pation 
as WTO GPA observer would allow us to gain expertise from WTO GPA Parties pertaining 
to the legal provisions of the text and trade implications.  
Para 3.107  
Could the Malaysian authorities indicate why mergers were excluded from the new Competition A ct 
despite the fact that Malaysia committed itself to introducing comprehensive competition laws in 
accordance with the declaration on the 2007 ASEAN Economic Community (AEC) Blueprint?  
Answer : 
Mergers were excluded with a view to promote development in t he capital market as 
well as to encourage M&A activities in the business sector in order to strengthen the 
capacity of domestic players, as well as to promote corporate global activities.  
Para 3.107  
Could the Malaysian authorities indicate whether they are  planning a revision of their competition 
laws to further foster competition in the domestic market?  
Answer : 
There are no current plans to introduce any amendment to the Competition Act 2010 or 
any other bill that seeks to govern merger control provisions.  
Para 3.107  
Could  Malaysia  explain  in more detail  why commercial  activities  in these  sectors  do not fall under  
the scope  of the Competition  Act? 
Answer : 
As provided  under  Section  3 and as specified  under  the First Schedule  of the Competition  
Act 2010  (CA 2010),  commercial  activities  under  the sectors  of Communications  and 
Multimedia  Act 1998  and the Energy  Commission  Act 2001  are excluded  from  the CA 
2010  mainly  because  there  are existing  competition  related  provisions  under  those  Acts.  
Para. 3.116  
Para 3. 116 states that according to the 2012 World Bank Corporate Governance Report on 
Observance of Standards and Codes (ROSC), which examined the six main areas of the corporate 
governance policy framework stated in the OECD Principles of Corporate Governance, Malaysia 's 
overall scores are higher than the average scores of countries within the Asian region.  
Does Malaysia consider the OECD Principles of Corporate Governance and the OECD Guidelines on 
Corporate Governance of State -Owned Enterprises to be useful i nstruments for promoting good 
corporate governance in private and state -owned enterprises in Malaysia?  WT/TPR/M/2 92/Add.1  
 
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  Answer : 
The Capital Market Masterplan 2 (CMP2) recognised that growth of the capital market is 
only sustainable if it is underpinned by a proper system of accountabilities and 
governance. Thus, strengthening corporate governance represents one of the key 
thrusts to reinforce investor trust and confidence in the Malaysian capital market. The 
OECD principles has always been used as a reference in building a  robust corporate 
governance framework.  We have recently undergone the CG ROSC assessment by World 
Bank which benchmarks a country 's legal and regulatory framework, practices and 
compliance of listed firms, and enforcement capacity vis -à-vis OECD Principle s. To 
ensure high performance and governance of Malaysia 's Government -linked companies 
(GLCs) and government -linked investment companies (GLICs), the Putrajaya Committee 
on GLC Performance came up with the Green Book which are best practices towards 
enhanc ing board effectiveness of the GLCs and GLICs.  
Will Malaysia express its views on the revision of the Principles and the Guidelines which will take 
place in 2014 for example at the Asia Roundtable? If yes, which will be the most important 
proposals for mod ification of the instruments?  
Answer : 
Malaysia supports the initiative towards reviewing the OECD principles. We have been active 
participants of the OECD Asian Roundtable on Corporate Governance, most recently in Mumbai 
(11-12 February 2014) where our gen eral views were shared through discussions.  
Para. 3.116  
According to para. 3.116, "The Companies (Amendment) Act 2007, which entered into force on 15 
August 2007, remains unchanged and seems to lack clarity on a range of issues." The 2012 World 
Bank Corpor ate Governance Report on Observance of Standards and Codes, maintaining investor 
confidence recommends reform in areas such as protection of smaller shareholders; disclosure of 
beneficial ownership and other non -financial information; strengthening of audi tor independence 
and effectiveness of market intermediaries; reviewing the role of government -linked investment 
companies and other institutional investors and owners, and maintaining the credibility and 
effectiveness of the SC [Securities Commission].  
What are Malaysia's plans to revise the Companies Act according to the recommendation of the 
World Bank?  
Answer : 
Malaysia continuously looks to strengthening corporate governance practices especially 
by public -listed companies in Malaysia. The comments recei ved from World Bank 
following CG ROSC assessment have been communicated to the Companies Commission 
for consideration in their effort to revise the Companies Act.  
Para 3.125  
The Secretariat 's report states that under Malaysian legislation a protection lev el corresponding to 
the one provided for in TRIPS article 23 is afforded to geographical indications (GI) of all products, 
without distinguishing between wines and spirits on the one hand, and other products on the other 
hand. The report specifies that thi s is true for registered products, while also stating that GIs are 
granted protection regardless of whether they are registered.  Could the Malaysian authorities 
clarify what level of protection is granted to GIs that are not registered? Namely, do also non -
registered GIs benefit from a level of protection equivalent to TRIPS article 23? If so, is this so for 
GIs of all products?  
Answer : 
For wines and spirits, higher protection is given to prevent any use in the course of 
trade of a geographical indication i dentifying wines/spirits for wines/spirits not WT/TPR/M/2 92/Add.1  
 
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  originating in the place indicated by the geographical indication in question, even where 
the true origin of the wines or spirits is indicated or the geographical indication is used 
in translation or accompani ed by expressions such as "kind", "type", "style " or 
"imitation ". This provision is provided under the existing Geographical Indications Act 
2000.  
The same level of protection will be accorded regardless of whether a geographical 
indication is registered. However, it is encouraged to register the geographical 
indication because the registration certificate will be a prima facie evidence to prove 
right of use in any institution of proceedings for injunction and damages in court.  
Para 3.125  
The Secretariat 's report furthermore states that a registered GI is given ten years of protection 
from the date of filing and is renewable for further periods of ten years. In the light of the fact 
referred to in the Secretariat 's report that in Malaysia GIs are granted pr otection regardless of 
whether they are registered or not, could the Malaysian authorities clarify the effect on the 
protection of a GI if its owner decides not to register its GI or does not renew the registration?  
Answer : 
Under the Geographical Indicatio ns Act 2000, protection of geographical indications 
shall be given, regardless of whether the geographical indication is registered. However, 
it is encouraged to register the geographical indication because the registration 
certificate will be a prima faci e evidence to prove right of use in any institution of 
proceedings for injunction and damages in court.  
If the owner does not renew the registration, the registration will be removed from the 
Register and cannot be used as prima facie evidence.  
4.2.3 Bord er measures  
Para. 4.14: We note that Malaysia has 19 scheduled tariff quotas. Malaysia's most recent 
notifications in this area cover the years 1997 and 1998 for imports under tariff quotas (MA:2) and 
date back to 1995 concerning the administration of tar iff quotas (MA:1). Have any changes 
occurred in the administration of its tariff quotas since 1995? If yes, when can WTO members 
expect Malaysia to submit a revised MA:1 notification? When does Malaysia intend to submit its 
MA:2 notifications for the years  1999 up to 2012 to the Committee on Agriculture?  
Answer : 
On the TRQ administration, the current practice of quota allocation is on first come first 
serve basis and the in -quota volume will be increased every year. As the transposition 
exercise involves r e-classification of some TRQ products into new tariff lines, Malaysia 
will submit its notification once it is finalised.  
Table 4.1  
Table 4.1 illustrates the utilization of Malaysia 's tariff quotas for the year 2011. Switzerland notes 
that some tariff quota s have very low fill rates. For example, two tariff quotas for milk and cream 
(0401.10.110 and 0401.20.110) have been filled by less than 30% in 2011. What are the reasons 
for those low fill rates? Which administration methods does Malaysia apply for those  two tariff 
quotas? What are the criteria for allocation of TQ shares?  
Answer : 
While there was no review done on the Government's policy on milk importation for that 
year, the presumption would be that there was a change in the market trend and that 
the qu ota filled rates reflected the demand for those products.   WT/TPR/M/2 92/Add.1  
 
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  FOLLOW -UP QUESTIONS  
3.4.6.1.6 Trade secrets  
Para 3.128: The Secretariat 's report states that no formal registration process for confidential 
information is required in Malaysia. However, in order to obtain the protection of confidential 
pharmaceutical test data in the context of registration of new drug products, the National 
Pharmaceutical Control Bureau, based on the Directive on Data Exclusivity (BPFK/PPP/01/03), 
requires the submission of a Let ter of Intent in addition to the application for registration. TRIPS 
article 62(1) provides for the possibility to require compliance with reasonable procedures and 
formalities as a condition for the acquisition and maintenance of the intellectual property  rights 
provided for under TRIPS Sections 2 through 6. Art. 62(1), however, does not envisage the 
possibility of requiring additional formalities regarding the protection of undisclosed information 
(article 39(3) in section 7), such as test data submitted in marketing approval procedures. Could 
the Malaysian authorities therefore explain how the requirement of submitting an additional letter 
of intent with the application for registration in order to obtain the protection of confidential test 
data is compat ible with TRIPS article 62 (1)?  
Answer : 
The letter of intent serves the purpose of transparency and certainty towards providing 
data exclusivity (which is a form of time -limited exclusivity) based on the Directive on 
Data Exclusivity. The Directive on Data  Exclusivity was introduced to serve the purpose 
of scientific assessment in consideration of the:  
i. Quality, Safety and Efficacy of any new drug product containing a New Chemical 
Entity.  
ii. Safety and Efficacy for a second indication of a registered drug produ ct as a 
condition for:  
a) registration of any new drug product containing a New Chemical Entity; or  
b) approval for a second indication of a registered drug product.  
With the purpose mentioned above, the procedure Data Exclusivity is compatible with 
the TRIPS ag reement.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM THE SEPARATE CUSTOMS  TERRITORY OF  
TAIWAN, PENGHU, KINM EN AND MATSU  
Page  19 Para 1.19 
Will Malaysia plan to apply the Competition Act to the energy and communications sectors in the 
future?  
Answer : 
As provided  under  section  3 and as specified  under  the First Schedule  of the Competition  
Act 2010  (CA 2010),  commercial  activities  under  the sectors  of Communications  and 
Multimedia  Act 1998  and the Energy  Commission  Act 2001  will be excluded  from  the CA 
2010  mainly  because  there  are alrea dy existing  provisions  relating  to competition  under  
those  Acts.  However,  market  dominance  in other  sectors,  can be addressed  when  an 
enterprise  abuses  its dominant  position.   
In ensuring  the effective  enforcement  of competition  law and policy  while  mainta ining  
consistency  in its application,  a Special  Committee  on competition  was established  in 
2012.  Any issues  related  to the sectors  exempted  from  the Competition  Act 2010  are 
addressed  in this Special  Committee.  
Page 27 (Para 2.9)  
According to the report, Malaysia aims to transform itself into a self -reliant and industrialized 
nation by the year 2020 (Vision 2020) and achieve economic growth with a per capita income 
target of US$15,000 -20,000.  
Question(s):  
1. Could Malaysia please describe the trade policy it  is implementing with a view to achieving this 
goal?  
2. Is Malaysia 's initiative to engage in regional economic integration related in any way to its 
Vision 2020? If so, how?  
Answer:  
Malaysia 's trade policy, including the focus on regional economic integrati on is aimed at 
promoting economic and industrial prosperity. In addition, the regional ASEAN 
initiatives, which aim to promote free flow of goods, services, investment, and capital 
and skills mobility, will also contribute to Malaysia 's economic and indust rial 
development. ASEAN offers tremendous opportunity not only in terms of market access 
for exports but also vast untapped economic opportunities for Malaysian companies. A 
number of Malaysian companies are successfully operating in neighbouring ASEAN 
countries. Malaysia is also strategically located in ASEAN as a gateway for foreign 
investments.  
Page 56, Para 3.65  
The report stipulates that "Procurement policies for government -linked companies (GLCs, 
section 3.4.3) are similar to those of ministries and o ther government bodies…GLC 's procurement 
practices are governed by their respective act and they are under the purview of their respective 
board of directors. Thus, GLCs are not governed by the public sector's government procurement 
rules and regulations. "  
3. Could Malaysia please elaborate further on how the GLC procurement policies are similar to 
those of government but at the same time are not governed by the public sector 's government 
procurement rules and regulations? Please provide an example.  WT/TPR/M/2 92/Add.1  
 
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  4. How are t he "government -linked companies " in Malaysia different from what are commonly 
known in other Members as "state-owned enterprises "? What is the definition of a GLC?  
Answer:  
3. Government -Linked Companies (GLCs) adhere to a universally adopted best 
procurement practices for their procurement activities to remain competitive. 
However, GLCs in Malaysia have to assume a developmental role among others, in 
meeting the national objective of addressing economic imbalance.  
4. Malaysia is not in the position to make objec tive comparisons between SOEs in other 
countries with GLCs in Malaysia given that there is no universally accepted definition 
of State -Owned Enterprises. Meanwhile, GLCs, in essence, refers to companies that 
have a primary commercial objective and in which  the Malaysian Government has an 
indirect controlling stake or companies owned by entities formed under the Act of 
Parliament commonly known as statutory bodies.  
Para  3.120  – 3.123  
Malaysia  encourages  all government  authorities  to register  and protect  their intellectual  property  
rights,  and provides  incentives  for domestic  companies  to acquire  patents,  designs,  models,  plans,  
trade-marks  or brands,  and other  similar  rights  from foreigners.  More and more foreign  companies  
would  therefore  like to apply  for patents in Malaysia.  In 2013,  for example,  94% of patents  
granted  were given  to foreign  applicants.   
Question(s):   
5. Does Malaysia  have plans  to make  any further  amendments  to its Patent  Act, which  has been 
in effect  now for 8 years?  
6. If so, could  Malaysia  please elaborate  on the purpose  of these  amendments?  
8. Does Malaysia  make  available  to foreign  applicants  any accelerated  patent  examination  
methods?  
9. If so, could  Malaysia  please  elaborate  further  on the exact  form of these  methods  and the 
requirements  involved?  
Answer:  
The draft amendments of the Patents Act are expected  to be tabled at Parliament before 
end 2014.  
The purpose of the amendments is to enhance patent procedures, to enable Malaysia to 
adopt flexibility under the Doha Declaration relating to a ccess to medicine and to accede 
to the Budapest Treaty. The amendments will also include new provisions to facilitate IP 
collateralization and to introduce an IP Official Journal as an official publication for 
patent.  
The expedited examination for patent i s available for foreign applicants.  
The expedited examination for patent gives an option to the qualified applicant to 
request to the Registrar to have his/her application expeditiously examined. This 
procedure is applicable only for applications that have  fulfilled all the requirements of 
the Patents Act. The procedure is as follows:  
 The applicant may lodge a request for approval of expedited examination 18 months 
from priority date or date of filing by filing Form 5H and a prescribed fee.  WT/TPR/M/2 92/Add.1  
 
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   After the approv al of the request, the applicant may lodge a request for expedited 
examination by filing Form 5I and a prescribed fee.  
 The application will be examined and issued with a Clear Report. A formality check is 
undertaken before granting of the patent.  
Under thi s procedure, a patent takes 20 months to be granted from date of filing.  
Page  78 Para 3.130  
Please  provide  further  details  and examples  of the ways in which  Malaysia 's Copyright  Act has 
restricted  online  piracy  through  the introduction  of more stringent  rules on internet  service  
providers,  and how stronger  regulations  have reduced  illegal  recording  of motion  pictures  in 
cinemas.  
Answer:  
The Copyright  Act was amended  in 2012  to include  provisions  to regulate  online  piracy.  
Section  45A of the Act grants  power  to the Assistant  Controller  of Copyright  to gain 
access  to computerized  or digitalized  data whether  stored  in the computer  or in any 
other  medium.  For this purpose  'access ' includes  being  provided  with the necessary  
password,  encryption  code,  decryption  code, software  or hardware  and any other  means  
needed  to enable  comprehension  of the computerized  data.  
In view  of this, the Enforcement  Division  has established  a Forensic  Unit to monitor  web 
sites  and the internet.  Upon  receiving  a complaint  from  a copyri ght owner,  and after  
obtaining  consent  from  the Deputy  Public  Prosecutor,  a notice  will be given  to withdraw  
the offending  website.  Disabling  of the website  is conducted  by Malaysia  
Communications  Multimedia  Commissions  (MCMC).   
Where  the infringing  copies  have  been  identified  to come  from  an online  location  outside  
Malaysia  or from  a specified  account,  the court  may order  the service  provider  to disable  
access  and to terminate  the specified  account.  
Furthermore  section  51A of the Act gives  the authority  that any statement  from  an agent  
provocateur  shall  be admissible  as evidence  in court.  
Illegal  recording  of motion  pictures  in cinemas   
Section  43A of the Act, provides  for offences  relating  to cam coding,  which  is, any 
person  who operates  an audiovisual  recording  device  in a screening  room  to record  any 
film in whole  or in part shall  be guilty  of an offence.  Since  the enforcement  of the 
amendments,  numerous  inspections  have  been  conducted  and warnings  have  been  given  
to cinema  patrons  before  the screening  of any movies.  Consequent  to actions  taken,  no 
further  complaints  were  received  from  copyright  owners.  
Question(s) :  
Malaysia has signed a bilateral agreement with Singapore to work together on lowering 
international roaming fees in the territory of each par ty:  
11. Could Malaysia please provide details of the concrete measures it has adopted with the specific 
 purpose of requiring telecom operators to lower their fees?  
Answer:  
One concrete measure undertaken by Malaysia is to conduct studies on the rates 
charged by mobile operators for mobile roaming to better understand prevailing 
industry practice and charging models. As mobile roaming charges involve different 
price components charged by operators from country to country, any study of a WT/TPR/M/2 92/Add.1  
 
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  regulatory require ment to reduce roaming charges requires close coordination and 
cooperation between the regulators to ensure that end users benefit.  
12. Do the aforementioned measures include the lowering of the international roaming wholesale 
 prices?  
Answer:  
The agreemen t between Malaysia and Singapore is a bilateral agreement and therefore 
requires consent from both Parties for the release of any information.  
Paragraph  2.55  
Through  collaboration  with APEC economies,  Malaysia  seeks  to facilitate  trade,  investment  and 
reduce the cost of doing  business.  Among  the measures  adopted  are reduction  in tariffs  and NTBs,  
simplifying  business  regulations,  making  information  on measures  affecting  business  operations  in 
services  trade more easily  accessible  through  business -friendly  databases,  further  enhancing  
business  travellers ' mobility  through  the APEC Business  Travel  Card (ABTC)  scheme,  as well as 
enhancing  supply  chain  connectivity  across  the border  by improving  logistics  and transport  
networks.  Key initiatives  in the area of trade facilitation  to address  supply  chain  issues  include  the 
operationalization  of the Authorised  Economic  Operator  (AEO)  and undertaking  Time Release  
Study  (TRS)  to improve  the performance  of the logistics  supply  chain.  
Q13. Please  elaborate  further  on how the APEC agenda  has helped  to advance  Malaysia 's domestic  
regulatory  reform  and improve  the business  environment  overall.  
Answer:  
Malaysia 's domestic  regulatory  reform  agenda  mirrors  APEC 's effort  to promote  
structural  and regulatory  reform  in member  economies.  Targeted  capacity  building  
programmes,  sharing  of best practices  and the willingness  of economies  to share  their  
experiences  has enabled  Malaysia  to leverage  and implement  its reform  initiatives  in an 
effective  manner.  Malaysia  has also used  the APEC platform  to share  its own 
experiences  with other  economies.   
Paragraph  14  
Does Malaysia  have any plans  to further  liberalize  the services  sectors  in order  to attract  foreign  
investment,  or to review  the FDI restrictions  periodically?  
Answer:   
Malaysia  is committed  to further  liberalising  its services  sector  which  is currently  being  
pursued  unilaterally  and through  binding  commitments.  To augment  Malaysia 's 
transformation  into a high-income  nation,  services  sectors  that have  been  targeted  for 
further  development  and liberalisation  include  those  areas  that would  promote  
creativity,  innovation,  high knowledge  intensity  and high technology  adoption.   
Following  the announcement  of the autonomous  liberalisation  of 45 services  subsectors  
in 2009  and 2012,  effor ts are being  undertaken  to identify  and address  implementation  
challenges  and barriers  faced  by industry  in these  sectors.  This includes  carrying  out 
institutional  and regulatory  reviews  and amendments  to further  improve  business  
processes  and procedures.   WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM THAIL AND  
Page 18, Para 1.16  
Could Malaysia please elaborate on the implementation of the Goods and Services Tax (GST), 
which is to be initiated in 2015? We would like to learn in particular, the Tax 's expected benefits 
and how it will imp act services providers.  
Answer : 
The introduction of the Goods and Services Tax (GST) is part of the Malaysian 
Government 's tax reform programme to enhance the efficiency and effectiveness of the 
taxation system. GST will be implemented in Malaysia from 1 A pril 2015. It will replace 
the current consumption tax i.e. sales tax and services tax (SST).  
GST, also known as Value Added Tax (VAT) in some countries, is proven to be a better 
tax system as it is more effective, efficient, transparent and business frien dly. It could 
also spur the economic growth as well as increase Malaysian products ' competitiveness 
in the global market. GST is also capable of generating a more stable source of revenue 
as it is less susceptible to economic fluctuations.  
Expected benefit s of GST include:  
i. Eliminating inherent weaknesses in SST such as cascading effects and transfer 
pricing, this in turn will benefit both the Government and consumers.  
ii. Businesses being able to reduce the cost of doing business as they could recover 
their inp ut tax from the Government.  
iii. Exporters having a complete relief from tax before exporting their goods or services.  
iv. Less bureaucracy as it is a self -policing tax. This will also enhance  tax compliance.  
Page 36 (paragraph 2.38)  
Could Malaysia provide the lis t of the "projects of strategic and national importance" indicated 
under the paragraph, if any? If not, please provide the general criteria in determining so and some 
examples. Also, how does the Government determine if a single foreign party "would have 
influence on the company"?  
Answer : 
The general criteria in determining "projects of strategic and national importance " are: 
 national security and sovereignty consideration; and  
 contribution towards the socio -economic and industrial development.  
Examples of "projects of strategic and national importance " include Northport, Westport 
and Naval Dockyard. In determining whether a single foreign party "would have 
influence on the company ", several factors are taken into consideration, including the 
level of foreig n equity participation.  
Page 40 (Paragraph 3.18)  
Could Malaysia please advise on the policy rationale behind the use of different customs valuation 
methods for commercial and individual importers?  
Could Malaysia please explain how the "gazetted price sys tem" is consistent with the WTO Customs 
Valuation Agreement? When the committee has doubts about the truth and accuracy of the WT/TPR/M/2 92/Add.1  
 
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  declared customs value, are the importers given an opportunity to explain to the committee before 
the declared value is rejected?  
Could Malaysia please confirm that, under the "gazetted price system", if the declared transaction 
value is not accepted as a transaction value, the customs value will be determined using other 
methods in the hierarchical order as prescribed in the WTO Cu stoms Valuation Agreement?  
Could Malaysia please indicate whether it has found any case of under -declaration? If so, we would 
appreciate if Malaysia can share with us the list of such cases.  
Answer : 
Q1 & Q2 : There is no difference in methods used for comme rcial and individual 
importers. For commercial importers, values are gazetted and calculation is consistent 
with the WTO Customs Valuation Agreement. If there is doubt, importers will be 
requested to explain the difference.  
Q3: Yes.  
Q4: No.  
 There will b e no issue of under declaration as the  importers will be using the 
 gazetted value.  
Page 59 (paragraph 3.78)   
To encourage the export of Malaysian goods, tax exemption on statutory income equivalent to 
30%, 50% or 100% of the value of increased exports ( depending on each company 's 
performance) is provided for locally -owned manufacturing companies with Malaysian equity of at 
least 60%.  Could Malaysia explain how this export subsidy measure is consistent with its WTO 
obligations, particularly Article 3 of t he Agreement on Subsidies and Countervailing Measures? Has 
Malaysia notified this measure to the WTO?  
Could Malaysia please provide detail on the criteria/conditions applied under this export subsidy 
measure ? 
Answer : 
As we are moving toward a high income n ation, it is very important for Malaysia to 
increase participation in international trade. The initiative is to encourage Malaysian 
companies especially SMEs to be more active in international trade thereby adding 
greater value to their products.  
Page 60 ( Paragraph 3.80)  
Could Malaysia explain how the benefits received under the import duty exemptions conditional to 
local content value, as indicated under the paragraph, is consistent with its WTO obligations?  
Answer : 
A Free Zone is an area in any part of Ma laysia that is declared by the Minister of Finance 
under the provision of Section 3(1) of the Free Zones Act 1990, as a Free Commercial 
Zone or Free Industrial Zone. The activities and industries therein are subject to minimal 
customs formalities as it is deemed under Section 2 (1A) of the customs Act 1967 to be 
a place outside the Principal Custom Area except in respect of Prohibition of Imports 
and Exports under Section 31 of the Customs Act 1967. Hence, products from companies 
located in the Free Industr ial Zones (FIZ) destined for Malaysian domestic market are 
considered as imported products and subjected to import duty at MFN/applied rates. 
However, effective 1 January 2011, products produced in the FIZ destined for the 
Malaysian market are eligible to enjoy ASEAN or ATIGA duty rates if they complied with 
the origin criteria, i.e. local content or substantial transformation.  WT/TPR/M/2 92/Add.1  
 
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  Page 62, Para 3.85  
As the Report states that "[i]ndividual taxi owners (since 2012) and car -rental operators (since 
2002) are exemp t from excise duties on the purchase of locally produced "national cars " while tour 
operators benefit from 50% reduction of purchases of locally assembled four -wheel -drive cars ", 
could Malaysia provide an explanation on how this scheme is consistent with i ts WTO obligations, 
particularly Article 3 under the Agreement on Subsidies and Countervailing Measures and Article 
III under the General Agreement on Tariff and Trade 1994?  
Answer : 
The scheme is currently being reviewed.  
Page 63 (paragraphs 3.89 -3.91)   
Please provide details on how foreign companies in the agricultural sector as well as the food 
production and distribution sector can qualify for the "pioneer status ", the investment tax 
allowance (ITA) schemes, and "customized incentive schemes " indicated i n the paragraphs.  
Answer : 
The Industrial Coordination Act, 1975 requires person(s) engaging in any manufacturing 
activity with shareholders' funds of RM2.5 million and above or employing 75 or more 
full-time paid employees to obtain a Manufacturing Licence . 
The major tax incentives for companies investing in the manufacturing sector are the 
Pioneer Status and the Investment Tax Allowance.  
Eligibility for Pioneer Status and Investment Tax Allowance is based on certain 
priorities, including the level of value -added, technology used and industrial linkages. 
Eligible activities and products are termed as "promoted activities" or "promoted 
products. Further details are available on www.mida.gov.my.  
Para 3.129  
Thailand is interested in learning more about Malaysia 's Copyright Voluntary Notification system as 
follows:  
a) How long does the notification processing take?  
b) Under the procedure, can Malaysia reject the applicant 's notification? Are  notification 
applications formally examined under specific criteria?  Could Mal aysia provide such details 
on this matter?  
c) Are there any requirements in order to notify copyright under the new Copyright Voluntary 
Notification system? Does MyIPO charge a notification fee to applicants?  
d) Has there been any dispute over copyright ownershi p in the course of notification process?  
Answer : 
 The notification process will take 1 month from the date of submission of request for 
notification to the date the notification is registered. A letter will be issued to notify 
the copyright owner.  
 The appli cation will have to go through formality checks to ensure the work is 
eligible for protection under the Copyright Act. The notification will be registered 
upon fulfilment of the requirements.  WT/TPR/M/2 92/Add.1  
 
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   Application must be made via Form CR -1 (Notification of work) or  Form CR -2 
(Notification of derivative work) to be submitted together with statutory declaration, 
a copy of work and prescribed fee. Fee for notification of work is RM15 and for 
derivative work is RM30. Fees for deposit of works are varied according to typ e and 
capacity of deposit (CD/DVD/Thumbdrive/External Hard Disk) ranging from RM10 to 
RM50.  
To date, there has been no dispute over copyright ownership in the course of the 
notification process.  
Paragraph 4.6 and 4.63 (page 103, Secretariat Report)  
As 2 o f 12 Malaysia 's national key economic areas are wholesale and retail trade and private 
healthcare, does Malaysia have any future plans to further promote or liberalize these two sectors, 
especially in distribution services?  
Answer : 
Further liberalisation o f the services sector will be considered from time to time 
depending on the readiness, capacity and overall contribution of particular sectors to 
Malaysia 's economic interest and social well -being .  
Pages 101 -102 (paragraph 4.60)  
How is the system of "approved permits " (AP) administered? Does the Malaysian Government set 
out specific criteria in granting the APs? If so, please elaborate.  
Answer : 
Several different government and non -governmental agencies are involved in granting 
licences . While automatic li censing is intended for data collection, non -automatic 
licences are mainly for sanitary and phytosanitary reasons (for agriculture).  
Page 43 (paragraph 3.24)  
Does Malaysia have a plan to make a transition of non -ad valorem duties to ad valorem duties? If 
so, what is the timeline of such transition?  
Answer : 
Currently, Malaysia does not have any plans to convert non -ad valorem duties to ad 
valorem duties. However, Malaysia is currently reviewing the non -ad valorem duties in 
line with the on -going Doha negoti ations.  
Pages 44 -45 (paragraph 3.26)  
Since April 2008, Malaysia began to apply tariff -rate quotas (TRQs) on some agricultural products 
such as live swine and poultry, poultry and pork meat, liquid milk and cream, and round cabbage. 
A large proportion of t hese quotas were unfilled in 2011. In addition, there were no imports of live 
swine and chicken/duck eggs for hatching due to lack of demand. Thailand is interested in learning 
whether Malaysia intend to remove quota for these products in the near future.  
Answer : 
Currently, Malaysia does not have any plans to remove the TRQs over the short/medium 
term as it was only implemented on 1 April 2008.  WT/TPR/M/2 92/Add.1  
 
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  Page 45 (paragraph 3.28)  
Does Malaysia have any plan to bind all tariff lines that remain unbound? Does Malaysia h ave any 
plan to manage the gap between the simple average MFN applied tariff rate and the simple 
average bound tariff rate in order to address the unpredictability imports into Malaysia 's market 
may face?  
Answer:  
In the Uruguay Round, Malaysia bound a sign ificant number of lines compared to the 
Tokyo Round. There were certain sectors at that time which required a certain level of 
support. Nevertheless, Malaysia will further review the unbound lines and increase the 
level of binding in the Doha Round.  
Pages 88-89 (paragraphs 4.21 -4.22)  
Does Malaysia have a policy in promoting foreign investment in the fisheries industry? If so, please 
share with us the principle and implementation of such policy.  
Answer : 
MIDA has no specific promotion activity for fisheries industry.  
FDI has assumed an important role in Malaysia's industrial and economic development 
over the last four decades. FDI has a positive impact on the economy in terms of 
contribution to GDP growth, trade and balance of payments, capital formation, 
employment, productivity and efficiency and spill over effects such as spin -offs, transfer 
of technology, establishment of new domestic companies, expansion of supporting 
industries, collaboration programmes with local companies and institutions of higher 
learning (both private and public), development of services sub -sectors and benefits to 
utility providers.  
In view of the importance of FDI, the Government will continue with its efforts to 
promote the inflows of FDI into the manufacturing and the services se ctors. However, 
Malaysia no longer promotes FDI into labour -intensive industries. Instead, the country 
is concentrating on the development of high value -added, technology -intensive, capital -
intensive and knowledge -based industries which require the inflows  of foreign 
technologies and expertise.  
Are there benefits or incentives provided to foreign investors in both upstream and downstream 
fisheries industry in Malaysia? If so, could Malaysia explain: what they are, whether there are 
conditions in order to re ceive such benefits; and other details that Malaysia can share with us?  
Answer : 
In Malaysia, to promote the participation of domestic and foreign investment, fiscal 
incentives (tax exemptions or deductions) are provided for activities in the upstream 
and d ownstream of fisheries industry.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS  FROM TURKEY  
Summary, Trade Policy Developments, pg. 9, para. 14  
It is stated that "…states that "…a considerable portion of Malaysia's tariff lines remain subject to 
import licensing, most of which is non -automat ic and continues being used as a tool of trade and 
industrial policy for, inter alia, regulating the flow of imports and promoting selected strategic 
industries ". 
Could Malaysian authorities kindly specify the motivation and reasoning behind keeping these 
import licensing procedures instead of other trade policy options such as tariffs which would 
certainly enable partner countries a much more predictable and transparent market access ? 
Answer:  
Malaysia has progressively reduced import licensing requirements  to facilitate trade and 
industry. Malaysia will continue to study and conduct consultations with the industries 
on future elimination of import licensing requirements taking into consideration national 
socio -economic, security and religious interests.  
3.2.2.1 Applied MFN Tariffs, pg. 41, para. 3.22 
While it is encouraging for trading community to see that the Malaysian simple average tariff 
dropped to 5.6% in 2013 from 7.4% in 2009, it seems that there was no significant sectoral 
approach to tariff reducti ons in applied rates. Could Malaysia kindly explain the logic behind the 
recent tariff reductions and indicate if they would continue in the future?  
Answer:  
Tariff reduction is an on -going process and any reduction will be done in consultation 
with the var ious stakeholders involved.  
3.2.5 Standards and other technical requirements, pp. 50 -51 
In view of Halal market size and its growth potential, in order to prevent technical barriers to trade 
in the halal market especially in the areas of standardization, c onformity assessment and 
accreditation, the market requires globally harmonized principles. In this context, Turkey is 
concerned about the problem stemming from the individual approaches amongst Muslim countries 
to halal standards lacking a generally accep ted set of principles for the industry.  
As is known, the existence of a multitude of different halal standards, certification processes and 
logos creates significant risks for all countries and consumers involved. On the manufacturer side, 
the abundance of  different certification processes, forces manufacturers to be certified more than 
once, adding additional costs, which are reflected to the final price of the product. On the 
consumer side, the variety of different halal logos creates considerable confusi on. From the 
perspective of governments, which have to protect their consumers from misinformation, there is 
no established way to know whether a halal certification body is indeed competent to provide a 
halal certificate or not.  
We are confident that, bei ng an affiliate body to the Organisation of Islamic Conference (OIC), the 
"Standards and Metrology Institute for Islamic Countries " (SMIIC) is the competent entitity for 
halal issue which aims at removing the technical barriers to trade (TBT) by means of i mplementing 
internationally accepted rules of standardization, certification and accreditation for halal products, 
thus ensuring the facilitation of trade between OIC Member States and the entire world.  
In this context, Turkey would like to ask whether Mal aysia plans to initiate the process for 
becoming a full member of SMIIC and adopt OIC/SMIIC standards as national standards and 
recognize certificates issued according to the relevant standards.   WT/TPR/M/2 92/Add.1  
 
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  Answer:  
Membership in SMIIC would provide Malaysia the platf orm to present views and 
opinions on matters related to Halal issues. Since 2012, Department of Standards 
Malaysia has been representing Malaysia as an observer at SMIIC meetings/events. 
Currently, Malaysia is studying various aspects of Malaysia 's members hip in SMIIC as 
well as its implication to the Malaysian Halal Industry when a common OIC Halal 
Standard is implemented.  
Page 67, Para. 3.101  
It is mentioned in the report that "In 2010, Malaysia began a rationalization effort to reform its 
subsidies regi me through a phased five -year reduction of subsidies on gasoline, cooking gas, 
electricity, and road tolls, that was projected to save a cumulative total of US$33 billion.127 
However, only minor reductions in diesel -fuel subsidies and an increase in electr icity tariffs and the 
price of natural gas for the power sector entered into force in 2011. The initiative lost momentum 
in 2012 as the Government "changed its focus to mitigating the rising cost of living" issues. " 
Given that the government changed its fo cus about subsidies back in 2012, how prepared is it to 
stand its ground when the long -awaited goods and services tax (GST) will be implemented in 
2015?  
Answer:  
Subsidy rationalisation is ongoing and implemented in a gradual manner so as not to 
unduly bur den the low income groups. It resumed in December 2010.  
GST will be implemented in April 2015 at 6%. Outreach activities are underway to 
educate the public and the business community while administrative measures are being 
put in place to ensure smooth im plementation. The GST is a replacement tax for the 
current sales (10%) and service tax (6%).  
Para 4.74  
It is mentioned in the report that "The Blueprint states that policies on foreign investment in the 
sector (through the issuance of new licenses or the a cquisition of significant equity interests in 
Malaysian financial institutions) will be guided by two considerations: prudential criteria, and 
whether the investment is in the best interest of Malaysia. " 
Could implementing such criteria trigger a crisis in  the financial sector, whereas the foreign 
holdings of local sovereign bonds is about %50, if they are accompanied with the eventually 
slowing down of the torrent of the speculative Western hot money?   
Answer:  
The two considerations; prudential and best in terest of Malaysia , which are legislated 
under the Financial Services Act 2013 and Islamic Financial Services Act 2013, are only 
applicable to the assessment of applications for new licenses and acquisition of shares 
in financial institutions, and do not extend to investment in other financial instruments 
such as in the equity and debt securities markets.  
4.7.3 Telecommunications, para 4.94  
It is reported that the Malaysian Government still has high concentration in the 
telecommunications, especially in f ixed-line sector. Could the Government of Malaysia 
tell whether there is a future plan for privatization in this area, by giving details of it?  WT/TPR/M/2 92/Add.1  
 
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  Answer : 
Even though the Malaysian Government still has high stake in Telekom Malaysia Bhd., it 
is a private com pany and the Government does not interfere with the daily operation of 
the company.  
Page 117, Para 4.120  
Could the Malaysian Government explain whether the existing limitation over percentage of foreign 
ownership in port operators will be removed in near future?  
Answer:  
Currently the Government of Malaysia has no plans to review the existing limitation on 
the percentage of foreign ownership in port operators.  
Page 118, Para 4.125  
The Malaysian authorities confirmed that full foreign equity participation is  now allowed for 
maritime transport -related services, with the exception of maritime cargo handling services.  
Could the Malaysian Government explain what the reason behind this exception is?  
Answer:  
Currently, the Government of Malaysia has no plans to op en up the maritime cargo 
handling services as it is part of the port operation which has been privatized / 
contracted out and is governed by the Concession Agreement.  
4.7.6 Tourism, para 4.133  
Will there be further autonomous liberalization of the tourism services, particularly in terms of 
permission of foreign investment?  
Answer:  
Malaysia 's liberalisation of the tourism services sector will continue to be undertaken in 
a progressive and balanced manner in line with economic and social development 
policies  and strategies.   
In General  
We see that there is quite an important difference between factual market situation and GATS 
commitments of Malaysia. Regarding Malaysia 's recent bilateral or plurilateral services trade 
agreements, are there also similar water  between real market conditions and commitments? Is it 
possible to get any information about the agreements of Malaysia where this water is lesser?  
Answer:  
The ASEAN Framework Agreement on Services (AFAS) was signed in 1995. It calls for 
liberalisation of  services sectors in the region as part of the regional initiatives to create 
an integrated market and regional production base. To date, ASEAN has completed 
substantial liberalisation of over 100 services sectors under 9 Packages of Services 
Sector libera lization, mainly relating to Modes 1, 2 and 3. Further liberalization and 
improvements in terms of all four modes of supply is on -going and is expected to be 
completed by 2015.  
While binding commitments of services liberalisation were undertaken through v arious 
plurilateral and bilateral FTAs, we have also autonomously liberalised certain sectors 
which are deemed to create and promote a more competitive and productivity driven WT/TPR/M/2 92/Add.1  
 
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  environment. Malaysia 's liberalisation of the services sector will continue to b e 
undertaken in a progressive and balanced manner in line with current economic and 
social development policies and strategies.  
The level of services liberalisation committed varies according to the requests and offers 
made with our trade partners under v arious FTAs.  WT/TPR/M/2 92/Add.1  
 
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  QUESTIONS FROM THE U NITED STATES  
Page 36, paragraph 2.37  
The Secretariat report describes some of the "Bumiputera " policies to support the ethnic Malay 
community. What changes is Malaysia considering with regards to "Bumiputera " policies i n light of 
economic liberalizations and its participation in various regional trade agreements?  
Answer : 
The Bumiputera policy is designed to enhance the participation of Bumiputeras in 
economic activities. This is in line with Malaysia's overall thrust to promote equitable 
and inclusive development and eradication of poverty. The Bumiputera policy will 
continue to be reviewed and revised accordingly to ensure that these objectives are 
achieved.  
Page 37, paragraph 3.5:   
The Secretariat 's report indicates tha t Malaysia maintains subsidies contingent upon export 
performance, in particular "statutory income tax exemptions ranging from 10% to 50% of the 
value of increased exports. " Further, the report mentions promotion measures for export 
processing zones "involving local -content requirements since 2011. " None of these subsidies were 
covered in Malaysia 's last notification under Article 25 of the SCM Agreement in G/SCM/N/220/MYS 
(October 14, 2011).  
How does Malaysia view these subsidies in light of Article 3.1 ( a) and (b) of the SCM Agreement?  
What steps is Malaysia taking to bring these programs in line with its commitments under the SCM 
Agreement?  
When will Malaysia fully notify these subsidies in line with the informational requirements of Article 
25.3 of the  SCM Agreement?  
Answer : 
As we are moving toward a high income nation, it is imperative for Malaysia to increase 
participation in international trade. The initiative is to encourage Malaysian companies 
particularly SMEs to be more active in international tr ade and adding greater value to 
the products.  
A Free Zone is an area in any part of Malaysia that is declared by the Minister of Finance 
under the provision of Section 3(1) of the Free Zones Act 1990, as a Free Commercial 
Zone or Free Industrial Zone. The activities and industries therein are subject to minimal 
customs formalities as it is deemed under Section 2 (1A) of the customs Act 1967 to be 
a place outside the Principal Custom Area except in respect of Prohibition of Imports 
and Exports under Section 31 of the Customs Act 1967. Hence, products from companies 
located in the Free Industrial Zones (FIZ) destined for Malaysian domestic market are 
considered as imported products and subjected to import duty at MFN/applied rates. 
However, effective 1 January  2011, products produced in the FIZ destined for the 
Malaysian market are eligible to enjoy ASEAN or ATIGA duty rates if they complied with 
the origin criteria, i.e. local content or substantial transformation.  
Page 38 Para 3.10  
The Secretariat 's report br iefly mentions the "Basket of Brands " (BOB) Scheme, which we 
understand was launched in 2011 to involve trademark holders in a more proactive effort to 
protect their IPR.  Please further explain the scheme, and provide any information or statistics 
about th e performance of the BOB initiative to date . WT/TPR/M/2 92/Add.1  
 
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  Answer : 
The scheme provides registered trademark owners in Malaysia the option of registering 
their proprietorship with the MDTCC.  
The program is intended to aid in ridding the market of counterfeit goods by com piling a 
database of genuine brands so as to facilitate easy identification of the brands that are 
at risk of being infringed and to allow prompt action upon receipt of a complaint by the 
trademark owner.  
The BOB has facilitated the investigation of a tot al of 564 cases since November 2011. 
Registration was on a voluntary basis and since 2011, 32 companies have registered 213 
trademarks under BOB.  
Page 39, paragraph 3.13  
What factors does Malaysia believe accounted for the increase in the average cargo cle arance time 
for sea cargo, from 3.2 days in 2007 to 3.63 in 2012, and for air cargo, from 0.8 days in 2007 to 
2.14 days in 2012, especially considering that the time requirements for customs formalities such 
as registration, duty payment, and inspections e ither stayed essentially the same for air cargo or 
dramatically decreased in the case of sea cargo?  
Answer : 
Some of the factors that may have contributed to the increase in the average cargo 
clearance time for sea and air cargo are :  
 Late physical removal  of goods after release of Customs documentation. This is due 
to economies of scale, where most consignment or dutiable/non dutiable shipments 
are usually 'consoled ' by forwarding agents into one vehicle for distribution to 
various factories or importers p remises.  
 With the practice of 'just-in-time' concept, not all consignments are released 
immediately. The consignments are stored at warehouses in the ports and only to be 
transferred to the factories concerned upon request using K1.  
 The 5 -8 days free demu rrage and storage charges in ports are to be reviewed with 
the objective of encouraging customs brokers/agents to speed up cargo delivery 
after customs release.  
Page 39, paragraph 3.14:   
What changes is Malaysia undertaking, or considering undertaking, to its legislation and customs 
operations in light of the outcome of the Time Release Study it undertook in 2011 and 2012?   
Answer : 
Several recommendations have been proposed:  
 amending the law and regulation with regards to provision of time allowed for every  
importer of dutiable and non -dutiable goods prior to  lodgement of customs 
declaration.  
 to have a one -stop centre for or coordination in  examination of goods involving other 
government agencies.  
 to reduce free demurrage and storage charges in ports and enc ourage customs 
brokers/agents to expedite  cargo delivery after customs release.  WT/TPR/M/2 92/Add.1  
 
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  Page 40, paragraph 3.16:   
The Secretariat 's report states "Malaysia's appeals system allows for complaints against Customs 
decisions to be made to the Director General of Custo ms; further appeals may be lodged with the 
Customs Appeal Tribunal, the Minister of Finance, and the High Court. In 2013 (January -October), 
there were 35 appeals to Director General of Customs and the Minister of Finance (29 in 2012, 23 
in 2008) 17 to the Customs Appeal Tribunal (52 in 2012, 11 in 2008), and none to the High Court 
(1 each in 2008 and 2012). "  
Please provide more details on the number, if any, of appeals received by the Director General of 
Customs, the Customs Appeal Tribunal, the Minister o f Finance, and the High Court related to 
Intellectual Property?  What types of IP were at issue (copyright, trademark, etc.)?  
Answer : 
Currently, appeals to DG and Customs Appeal Tribunal is on classification and valuation 
issues. On IPR, Customs is only inv olved in Border Measures and investigation is 
normally done by Ministry of Domestic Trade Cooperative and Consumerism Malaysia.  
There have been no appeals to DG and Customs Appeal Tribunal on IP issues.  
Page 40, paragraph 3.18 :   
The Secretariat 's report d escribes the "gazetted price system " for imports of completely built up 
(CBU) motor vehicles.  Please explain why the "gazette price " is used exclusively for motor 
vehicles.  How does Malaysia view the use of "gazette price " in light of the WTO Agreement on 
Customs Valuation?  If the transaction value is the basis for the "gazette price, " why must 
importers use the gazette process prior to importation instead of simply declaring the transaction 
value at the time of importation?  
Answer : 
The gazetted price syste m is introduced as a reference price to assist the Customs 
Department to determine the value of any dutiable vehicles for the purpose of payment 
of levy and customs duties. An importer who disagrees with the gazetted price can 
submit an appeal for further evaluation and investigation by Customs Department.  
The value fixed under Section 12 of the Customs Act 1967 is based on the proposal by a 
Panel, which reviews all the relevant importation documents and data or information 
available in Malaysia. Customs va lue will be derived on the basis of a hierarchy order of 
valuation rules as follows:  
a) Transaction value or Transaction value plus adjustment under regulation 4 and 5;  
b) The transaction value of identical goods under regulation 6;  
c) The transaction value of simi lar goods under regulation 7;  
d) The deductive value of the imported goods under regulation 8;  
e) The computed value of the imported goods under regulation 9 (not applicable in the 
cases of imported CBU cars); and  
f) Flexible valuation allowed.  
Pages 45 -46, Para 3. 30 
The Secretariat 's report states that sales tax and excise duties are fully exempted for purchases of 
"locally purchased machinery/equipment. " We note that none of these subsidies were covered in WT/TPR/M/2 92/Add.1  
 
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  Malaysia 's last notification under Article 25 of the SCM A greement in G/SCM/N/220/MYS (October 
14, 2011) ( "N220/MYS "). 
a) Please discuss this program in light of Malaysia's obligations under the SCM Agreement, 
specifically under Article 3.1(b) of the SCM Agreement which prohibits subsidies contingent 
upon the use of  domestic over imported goods.  
b) Additionally, when will Malaysia submit the requisite notification of these subsidies, with 
sufficient detail to satisfy the informational requirements of Article 25.3 of the SCM 
Agreement?  
Answer : 
This issue no longer releva nt with the implementation of GST.  
Page 46 -47, paragraph 3.32:   
The Secretariat 's report states "Furthermore, imports of 60 product categories (including 
live/edible animals/fish/birds, plants, pork products, milk, pasta, ice cream, animal feeding, 
fertilizers of animal origin, paddy rice, coffee, cabbage, natural honey, numerous food products, 
logs/wood in the rough from all countries except Indonesia, wood, plywood, raw hides and skins, 
leather, arms and ammunition, explosives, pesticides) were subject t o permit or approval and 
inspection (often depending on the Malaysian State of destination) by different government or 
non-governmental agencies.  According to the authorities this approval/permit requirement is to 
ensure the fulfilment of international com mitments, as well as for national security, public health 
and safety, and monitoring purposes. "  
a)  Please further describe Malaysia 's import licensing regime for agricultural products.   
b)  For the agricultural products listed, please describe the type of appr oval and inspection 
procedures required.  Is approval granted through use of import permits?  Who grants the 
permit and are permits granted automatically?  
Answer : 
a) Permits are required for the import of agricultural products. Approval of the import 
permits is  granted subject to fulfilling import requirements such as SPS, 
(Phytocertificate or Health Certificate) or quota and monitoring. All agriculture 
products imported must go through inspection and clearance by the Malaysian 
Quarantine and Inspection Services  (MAQIS) . 
b) Imports of agriculture produce (includes animal, plant, fish and agriculture based 
produce) require import permits issued by MAQIS for imports into Peninsular 
Malaysia, and the respective issuance authorities for imports into Sabah and 
Sarawak. S ome of the agriculture produce such as live animal (cow/cattle), meat 
products (poultry, pork), UHT milk, round coconut, cabbages and unroasted coffee, 
requires the importer to apply for quota before they can apply for the permit. For 
importation of fish a nd fish products, the importer is required to apply for wholesale 
license from the Malaysian Fisheries Development Authority.  
Page 46, Paragraph 3.33  
The Secretariat 's report describes Malaysia 's use of import licenses, and states, "Most of Malaysia's 
import licensing remains non -automatic and licensing is mainly intended to regulate the flow of 
imports and to promote import -sensitive strategic industries selected for achieving certain socio -
economic objectives. "   
a)  How does Malaysia view the use of import license procedures to regulate the flow of 
imports in light of the WTO agreement on Import licensing Procedures, especially Article 
3.2 that Non -automatic licensing shall not have trade -restrictive or distortive effects on 
imports additional to those cause d by the imposition of the restriction? " What measure or WT/TPR/M/2 92/Add.1  
 
- 176 - 
 
  measures are such licenses used to implement and please describe them in light of Article 
1.2 of the WTO Agreement on Import Licensing Procedures?  
b)  The Secretariat 's report further notes that Malaysi a grants import licenses on heavy 
machinery for the construction sector "only if not available locally. " Please explain "local 
availability " in the context of the WTO Import Licensing Procedures Agreement.  
Answer : 
Malaysia has progressively reduced import licensing requirement to facilitate trade and 
industry. Malaysia will continue to study and conduct consultations with the industries 
on future elimination of import licensing requirements taking into consideration national 
socio -economic and security.  
Local availability refers to the products produced in Malaysia regardless whether the 
business is owned by locals or foreigners.  
Page 55, Para 3.61   
The Secretariat 's report notes that Malaysia became an observer to the WTO Government 
Procurement Agreement (G PA) on 18 July 2012.  The Secretariat further notes that Malaysian 
authorities are of the view that Malaysia has yet to attain the level of economic development 
needed to benefit from the GPA.   
Does Malaysia have a target level of development or a timeframe  by which the country would 
begin accession negotiations to the GPA?  
Answer : 
By becoming an observer, Malaysia hopes to gain exposure, understanding and insight 
through the discussion and deliberation of the Committee meeting particularly in 
understanding  GPA regimes aligned to the WTO agreement. Malaysia will assess its 
readiness to join the WTO GPA in consultation with stakeholders on the cost benefit of 
doing so besides the obligations that need to be fulfilled as a party.   
Page 56, Para 3.66   
The Secre tariat 's report notes that Malaysia expanded its countertrade policy in March 2011 to 
include non -defense procurement, and that the offset obligations are for 100% of the contract 
value as aligned with a number of Malaysia 's macroeconomic framework plans.   
Does Malaysia have a target level of development or timeframe by which these offsets will be 
reduced or eliminated?  
Answer : 
Government Procurement is used as a tool for nation building to achieve Malaysia 's 
socio -economic agenda and also to support the fu ll achievement of the objectives and 
aspiration towards a developed nation status. Malaysia will continue to use the offset 
policy to further support the national aspiration to develop Malaysia as a sustainable, 
high-end industrial and technology -based nat ion. 
Page 56, Para 3.67  
The Secretariat 's report notes that Malaysia has implemented electronic procurement through its 
ePerolehan (eP) system and that all government entities have at least partially implemented the 
system.   WT/TPR/M/2 92/Add.1  
 
- 177 - 
 
  Does Malaysia have an estimate of the proportion of tenders issued through eP out of the total 
number of tenders issued annually?  Are there plans in place to achieve 100% of tenders issued 
through eP?  Is there a threshold above which tenders must be published electronically?  
Answer : 
Malaysia continues to implement its ePerolehan (eP) electronic procurement system for 
the purchases of supplies and services. In order to support the implementation of eP, 
the Government has set a target of 75% usage of eP annually.  
Page 57, Para 3.68   
The Se cretariat 's report notes that Malaysia has also established the MyProcurement portal which 
can be used by procurement entities to post tender advertisements.   
Is there a difference in determining when tenders should be advertised on MyProcurement instead 
of the ePerolehan system?  Are all opportunities on the MyProcurement portal also listed on the 
ePerolehan portal?  
Answer : 
MyPROCUREMENT portal was launched as a dedicated portal with information pertaining 
to government tenders for supplies, services and wo rks. MyPROCUREMENT is intended 
to complement the existing information platform such as the ePerolehan portal. 
Meanwhile, ePerolehan is the official electronic procurement system for the Government 
of Malaysia and provides an end -to-end service via internet  transaction from buyer to 
seller. The ePerolehan portal will post all opportunities for procurements of supplies and 
services only.  
Page 57, paragraph 3.70:   
The Secretariat 's report discusses state trading and Malaysia 's identification of only one state -
trading enterprise (STE).  What criteria were used to identify this entity as a STE?  Were there other 
entities reviewed that were not identified?  If so, on what basis was it determined that the entity 
did not qualify as a STE?  
Answer : 
BERNAS is the only Sta te Trading Enterprise (STE) as stipulated under Article 17 of GATT 
1994. No other entities are identified as STE.  
Page 59, paragraph 3.78:   
According to the Secretariat 's report, manufacturing companies are eligible for "tax exemption on 
statutory income, equivalent to 10% or 15% of the value of increased exports, provided that the 
goods exported attain at least 30% or 50% value -added, respectively. " Such a program raises 
questions, considering the provisions of Article 3.1(a) and (b) of the SCM Agreement p rohibiting 
export and local -content subsidies.  We note that none of these incentives were covered in 
N220/MYS.   
a) Please discuss this program in light of Malaysia's obligations under the SCM Agreement.  
b) Additionally, when will Malaysia submit the requisite n otification regarding these subsidies, 
with sufficient detail to satisfy the informational requirements of Article 25.3 of the SCM 
Agreement?  
Answer : 
As we are moving toward a high income nation, it is imperative for Malaysia to increase 
participation in i nternational trade. The initiative is to encourage Malaysian companies WT/TPR/M/2 92/Add.1  
 
- 178 - 
 
  particularly SMEs to be more active in international trade and adding greater value to 
the products.  
Page 60, paragraph 3.80:   
The Secretariat 's report describes various incentives for companies located in Malaysia 's numerous 
free industrial zones (FIZ) and free commercial zones (FCZ).  Similar incentives also appear 
available to "licensed manufacturing warehouses" (LMW).   We note that none of these incentives 
were covered in N220/MYS.  Moreover, these incentives raise questions in light of the provisions of 
Article 3.1(a) and (b) of the SCM Agreement prohibiting export and local -content subsidies.  
Specifically, the Report states that "a company must export at least 80% of its output " to qu alify 
for location in the FIZ, that "[a]ny goods ...  may be brought into, produced or provided in the 
zones without payment of any tariffs, excises, sales or service tax" and that starting in January 
2011, "FIZ companies benefit from import duty exemptions  if they achieve 40% of local content 
value. "  
a)  Please discuss the incentive provided under each of the three programs in light of 
Malaysia's obligations under the SCM Agreement.  
b)  Additionally, when will Malaysia submit the requisite notification regarding  these 
subsidies, with sufficient detail to satisfy the informational requirements of Article 25.3 of 
the SCM Agreement?  
Answer : 
A Free Zone is an area in any part of Malaysia that is declared by the Minister of Finance 
under the provision of Section 3(1) of the Free Zones Act 1990, as a Free Commercial 
Zone or Free Industrial Zone. The activities and industries therein are subject to minimal 
customs formalities as it is deemed under Section 2 (1A) of the customs Act 1967 to be 
a place outside the Principal  Custom Area except in respect of Prohibition of Imports 
and Exports under Section 31 of the Customs Act 1967. Hence, products from companies 
located in the Free Industrial Zones (FIZ) destined for Malaysian domestic market are 
considered as imported produ cts and subjected to import duty at MFN/applied rates. 
However, effective 1 January 2011, products produced in the FIZ destined for the 
Malaysian market are eligible to enjoy ASEAN or ATIGA duty rates if they complied with 
the origin criteria, i.e. local c ontent or substantial transformation.  
Pages 60 -61, paragraph 3.82:   
The Secretariat 's report further mentions various export promotion incentives facilitated through 
the Malaysian External Trade Development Corporation, a government agency, some of which 
raise questions in light of the provisions of Article 3.1(a) of the SCM Agreement prohibiting export 
subsidies.  Based on the Malaysian government website cited in the Report, these incentives 
include, inter alia: double deduction for the promotion of export s, double deduction for promotion 
of Malaysian brands and double deduction of freight charges.  Again, none of these incentives were 
covered in N220/MYS.  
a) Please discuss this program in light of Malaysia's obligations under the SCM Agreement.   
b) Additionally,  when will Malaysia submit the requisite notification regarding these subsidies, 
with sufficient detail to satisfy the informational requirements of Article 25.3 of the SCM 
Agreement?  
Answer : 
As we are moving toward a high income nation, it is imperative for Malaysia to increase 
participation in international trade. The initiative is to encourage Malaysian companies 
particularly SMEs to be more active in international trade and adding greater value to 
the products.  WT/TPR/M/2 92/Add.1  
 
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  Page 64, paragraph 3.91:  
According to the  Secretariat 's report, Malaysia "may award more favourable tax relief on a case -
by-case basis (Customised Incentive Scheme) to strategic projects of national importance, e.g., 
heavy capital investment and high -tech projects, " including "up to 100% exemptio n for 10 to 15 
years. " None of the incentives under the Customised Incentive Scheme were covered in 
N220/MYS.  When will Malaysia submit the requisite notification regarding these subsidies, with 
sufficient detail to satisfy the informational requirements o f Article 25.3 of the SCM Agreement?  
Answer : 
Malaysia is committed to fulfilling its obligations under all WTO Agreements, including 
the Agreement on Subsidies and Countervailing Measures (ASCM) and has taken 
measures to ensure notification obligations ar e met.  
Pages 64 -65, paragraphs 3.93 -3.95:  
The Secretariat 's report further mentions a wide range of sectoral incentives under various funds 
and schemes, none of which were covered in N220/MYS. These include, inter alia: the Domestic 
Investment Strategic Fu nd under the Customised Incentive Scheme; the High Impact Project 
Fund;  the Multimedia Super Corridor Malaysia (MSC) Research and Development Grant Scheme; 
as well as Customized training and R&D grants available for the automotive industry.  When will 
Malay sia submit the requisite notification regarding all of these subsidies, with sufficient detail as 
to each subsidy to satisfy the informational requirements of Article 25.3 of the SCM Agreement  
Answer : 
The Ministry of Finance gathers information and coordin ates with stakeholders on 
information relating to all financial assistance/funding.  
Page 74 Para 3.117:  
What is the process for seeking enforcement action against infringing content online, and what 
Ministries and other government entities have relevant j urisdiction?  
Answer : 
The procedure prescribes for an official complaint be lodged to the Enforcement Division 
MDTCC together with a copy of the Statutory Declaration stating the status of the 
complainant, i.e. either he is the copyright owner, a licensee o r in some cases an agent 
appointed by the copyright owner, who then must have a Letter Of Authorization.  
Once all requirements are fulfilled including legal authorisation, a request will be made 
to Malaysian Communications Multimedia Commissions (MCMC) to  block/bar the 
appropriate web site / internet/IP providing access and distributing infringing contents 
on line.  
In addition, and if the physical addresses are known,  inspections and raids will then be 
conducted at the premises  concerned, to seize any evid ence and proceed with cases 
under the Copyright Act.  
Page 74 Para 3.117:  
Has the Special Anti -Piracy Taskforce remained active?  
Answer : 
The Ministry 's Special Anti -Piracy Taskforce is still in force and agreed for sub -
committees to be formed to perform spe cific enforcement roles.  WT/TPR/M/2 92/Add.1  
 
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  The sub committees formed are: the Physical Goods Sub Committee (CD/VCD/DVD), 
Digital Medium Sub Committee (for on line piracy) and the Awareness and Campaign 
Sub Committee. Every committee would have its own Key Performance Indic ator (KPI) 
and Standard Operating Procedure (SOP).  
With the Special Task force, it is hoped that continuous actions can be undertaken 
against all copyright infringements with collaboration from other enforcement agencies 
and assistance from the industries.  
Page 74 Para 3.117:  
Can Malaysia provide detailed enforcement statistics for inspections, seizures, prosecutions, and 
convictions for sale of counterfeit optical discs, software, and publications?  
Answer : 
Statistics of  inspections, seizures, prosecutions  and convictions for sale of counterfeit 
optical discs, software and publications:  
i) Total inspections conducted  
2012 -95,279 premises  
2013 -98,331 premises  
2014 -6,131 premises  
ii) Total value of seizures   
2012 -MYR12,039,115 (USD3,168,188)  
2013 -MYR5,393,318 (USD 1, 419,294)  
2014 -MYR58,500 (USD 15,394)  
iii) Number of prosecutions cases  
2012 -387 cases  
2013 -237 cases  
2014 -3 cases  
iv) Convictions achieved  
2012 - Total fine of MYR14mil Or USD 3,684,210  
2013 - Total fine of MYR8mil or USD2,105,263  
2014 - Total fine of MYR276,000 Or US D 72,631.  
Page 76, Para 3.125:  
The Secretariat 's report indicates that geographical indications may be protected in Malaysia and 
that Malaysia has registered 22 geographical indications.  
  What are the grounds for denying protection or recognition to a geo graphical indication?  
  Do such grounds include prior trademark rights that would likely cause confusion in 
Malaysia and evidence that the proposed term is recognized as a generic term by the 
Malaysian consumer?  
  Can terms that have been granted protection  and registered as geographical indications in 
Malaysia be cancelled or invalidated?   
  If so, what are the grounds for cancelling or invalidating a protected and registered 
geographical indication in Malaysia?  WT/TPR/M/2 92/Add.1  
 
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  Answer : 
 The Geographical Indications Act 2000 provides four grounds for exclusion from 
protection and they are as follows:  
(i) Geographical indications that do not correspond to the meaning of 
"geographical indication " as defined in section 2: an indication which identifies 
any goods as  originating in a c ountry or territory, or a region or locality in that 
country or territory, where a given quality, reputation or other characteristic of 
the goods is essentially attributable to their origin.  
(ii) Geographical indications which are contrary to public order or mo rality;  
(iii)  Geographical indications which are not or have ceased to be protected in their 
 country or territory of origin; or  
(iv) Geographical indications which have fallen into disuse in their country or 
territory of origin.  
 Where a trade mark has been applied for or registered in good faith, or where rights 
to a trade mark have been acquired through use in good faith either (i) before the 
commencement of the Geographical Indications Act 2000 or (ii) before the 
geographical indication is protected in its country  of origin, the Act shall not 
prejudice the registrability or the validity of the registration of the trade mark, or the 
right to use the trade mark on the basis that such a trade mark is identical with or 
similar to a geographical indication.  
 An exception  from protection shall apply in respect of a geographical indication of 
any country to goods or services for which the relevant indication is identical with 
the term customary in common language as the common name or generic term for 
such goods or services  in Malaysia.  
 Registration of a geographical indication may be cancelled on four grounds provided 
under section 4 of the Geographical Indications Act and they are as follows:  
(i) Geographical indications that do not correspond to the meaning of 
"geographical i ndication " as defined in section 2: an indication which identifies 
any goods as originating in a country or territory, or a region or locality in that 
country or territory, where a given quality, reputation or other characteristic of 
the goods is essential ly attributable to their origin.  
(ii) Geographical indications which are contrary to public order or morality;  
(iii)  Geographical indications which are not or have ceased to be protected in their 
country or territory of origin; or  
(iv) Geographical indications which have  fallen into disuse in their country or 
territory of origin.  
Page 78, para 3.128:  
The Secretariat 's reports state that "Malaysian law in this area remains based on English law and 
there is no formal registration process for trade secrets or confidential in formation. As from 1 
March 2011 the MOH has provided data protection for pharmaceuticals containing new chemical 
entities (NCE), for periods of five years and three years for second indication. Protection is 
provided against unfair commercial use, as well as unauthorized disclosure of test or other data 
generated to obtain marketing approval of pharmaceutical products containing NCEs. Protection is 
granted on the same date as in the country of origin."  Malaysia appears to require an application 
for pharmace utical data protection (see Ministry of Health Online information accessed at:  
http://portal.bpfk.gov.my/index.cfm?&menuid=105&parentid=82 and Drug Registration Guidance 
Document (First Edition, Rev.. March 2013), pages 51 -52, accessed from  WT/TPR/M/2 92/Add.1  
 
- 182 - 
 
  http://portal.bpfk.gov.my/aeimages/File/Complete_DRGD_with_appendices_update_March2013_C
OH.pdf  on February 13,2014) .  
Please further explain this requirement, a nd explain the relationship to TRIPS Articles 39 and 62.  
Answer : 
As required under Article 39 of TRIPS, Malaysia has provided the Directive on Data 
Exclusivity (DE) to protect data for pharmaceutical marketing approval.  
Please explain when the protection a gainst unfair commercial use begins, and if protection begins 
on the date a product is approved in the country of origin, how this provides protection against 
unfair commercial use in Malaysia after the product has been approved in Malaysia.  
Answer : 
A comp etitor in Malaysia is not allowed to rely upon the safety and efficacy data (the 
undisclosed information) of an originator.  
Furthermore, to facilitate an understanding of the protections Malaysia provides against unfair 
commercial use, please explain when a competitor in Malaysia is permitted to rely upon the safety 
and efficacy data (the undisclosed information) of an originator.  
Answer : 
A competitor in Malaysia is not allowed to rely upon the safety and efficacy data (the 
undisclosed information) of an or iginator.  
Page 78, Para 3.129:  
The Secretariat 's reports states that "on 1 June 2012 Malaysia introduced a new Copyright 
Voluntary Notification system, where copyright owners may deposit their copyright work together 
with statutory declaration to be recor ded in the Copyright Register."  Please describe the extent to 
which copyright owners are utilizing this new system, including the number of works deposited for 
registration since its implementation.  
Answer : 
The Intellectual Property Corporation of Malaysi a (MyIPO) has recorded a total of 1,618 
copyright voluntary notifications from June 2012 to December 2013. The copyright 
works consist of literary, artistic, broadcast, film, musical, sound recording and 
derivatives. MyIPO is also organizing awareness prog rammes on voluntary notification 
to encourage copyright owners to register their works.  
Page 79 Para 3.130:  
The Secretariat 's report states that "Malaysia plans to update its Optical Disc Act to strengthen 
licensing requirements of CD and DVD manufacturers , though by November 2013 no draft 
amendments had been made public. " 
Please provide an update on the current status of these proposals and state when the 
amendments may be expected to be made public.  
Answer : 
Currently MDTCC has no plans to amend the Optica l Discs Act 2000.  
Page 79 Para 3.132 : 
What are the role, duties, tasks and responsibilities of the Special Anti -Piracy Task Force?  WT/TPR/M/2 92/Add.1  
 
- 183 - 
 
  Answer : 
The role, duties, tasks and responsibilities  of the Special Anti -Piracy Task Force are as 
follows:  
i. To develop an int erdepartmental or interagency effort within its Task Force to curb 
piracy.  
ii. To discuss issues with regards to copyright especially those that require 
rationalization or integrated actions.  
iii. To strategise all actions in dealing with piracy and to gather infor mation from 
relevant agencies and industrial players.  
iv. To undertake concerted action and assist in investigations especially where each 
agency 's expertise is required particularly in the digital medium.  
v. To ensure continuous action against piracy whether in physical or digital medium.  
vi. To block websites found supplying pirated optical discs.  
Page 79 Para 3.132  
Please also explain the nature of the cooperation between MDTCC and book publishers.  Have any 
criteria for action or enforcement been outlined or detail ed? 
Answer : 
Regular meetings with book publishers and suppliers association are held to discuss 
related complaints received from the publishers or representatives.  
Clear procedures have been set for submission of complaints. Each complaint must be 
submitte d together with:  
1)  A surveillance report  
2)  A Letter of Authorization  
3)  A copy of the Statutory Declaration (SD);  
4) A copy of the works with an undertaking that the original be produced during court 
proceedings.  
The complainant is to forward a true c opy of the SD within 90 days and any other 
documents, to ensure that the cases be taken to court within 6 months from date of 
seizure.  
Page 79, paragraph 1.333:  
The Secretariat 's report states, "[c]ustoms officers have an ex officio duty under the Act to detain 
or suspend the release of goods that are deemed to be infringing IPRs on copyrights and 
trademarks on the basis of prima facie evidence. "  
a) Please provide the title of the legal instrument to which this refers, and where it is published.   
b) Does this duty extend to goods that are being exported from Malaysia, to goods under 
customs transit, as well as to goods that are transshipped?   
c) What other provisions for border measures are currently available in Malaysia (such as 
application for action by  right holders)?  WT/TPR/M/2 92/Add.1  
 
- 184 - 
 
  Answer : 
a) Trade Mark Act 1976 and Copyright Act 1987.  
b) This duty extends to exported goods, but not to goods in transit and transhipment.  
c) The other provision for border measures is application for action by right holder.  
Page 79 Para 3.134  
What is Malaysia 's policy with respect to destruction of infringing goods ? 
Answer : 
Power to destroy infringing goods by MDTCC is as prescribed in the Copyright Act 1987. 
Section 54(7) of the Act states that destruction of goods to commence upon procuring a 
court order with regard to the exhibits of the case seized.  
Page 80 Para 3.135  
The Secretariat 's report states "On 20 October 2011, the MDTCC launched a voluntary Basket of 
Brands (BOB) scheme to protect companies against the sale of counterfeit goods.  Under this 
scheme trade mark right -holders receive more proactive protection efforts in exchange for a 
commitment to testify in any resulting prosecutions. " 
What is the nature of the "proactive protection efforts " offered?  
Are there any statistics available to  show how frequently brand owners have testified, or have 
been asked to testify in prosecutions?  
Answer : 
Under BOB trade mark owners are not required to visit all 73 branch offices throughout 
the country for verification. Action is taken proactively withou t trade mark owners 
having to lodge complaints, or be physically available at all times, except when the case 
is brought to court.  
Statistics show, there are 3 cases where brand owners have testified in court and in 
prosecutions.  
Page 80 -81, Para 3.137  
The Secretariat report states: "The Intellectual Property (IP) Court, established on 17 July 2007, 
was to comprise 15 session courts located in all states; however, by April 2012 courts had been 
established only in 3 states (Kuala Lumpur, Penang, and Johor),  and over 175 cases were still 
pending at end -2011.  On 11 March 2010, the MDTCC reactivated and expanded the jurisdiction of 
the Copyright Tribunal, which was introduced in 1999 and ceased in 2003 as no case had been 
recorded since its establishment, in or der to offer the users and copyright owners an alternative 
platform, with simpler, cheaper, and faster procedures, rather than the strict procedures of the IP 
court; the Copyright (Copyright Tribunal) Regulations 2012, setting its operating procedures, 
entered in force on 1 September 2012 but no case has been filed so far. "  
What were the circumstances that precluded the establishment of the remaining IP Courts?  
If available, please provide information as to the distribution of the 175 cases pending before  the 3 
IP courts.  For example, are all pending before the IP Court in Kuala Lumpur?  
What information can be provided to explain the lack of cases filed before the Copyright Tribunal?  WT/TPR/M/2 92/Add.1  
 
- 185 - 
 
  Answer : 
IP Court is under the purview of the Judicial Body.  
There is no case filed before the Copyright Tribunal because most of the cases referred 
to the Tribunal are matters pertaining to Contract for Services which is beyond the scope 
of the Tribunal 's jurisdiction.  
Para 3.137  
The Secretariat Report states that the Ministry  of Domestic Trade, Co -operatives and Consumerism 
has "reactivated and expanded the jurisdiction of the Copyright Tribunal . . . in order to offer the 
users and copyright owners an alternative platform, with simpler, cheaper, and faster procedures, 
rather than the strict procedures of the IP court; the Copyright (Copyright Tribunal) Regulations 
2012, setting its operating procedures, entered in force on 1 September 2012 but no case has 
been filed so far."  Please explain why, despite the advantages described , no cases have been filed 
in the Copyright Tribunal and describe any efforts being undertaken by the Government to 
encourage parties to utilize that forum.  
Answer : 
There is no case filed before the Copyright Tribunal because most of the cases referred 
to the Tribunal are matters pertaining to Contract for Services which is beyond the scope 
of Tribunal 's jurisdiction.  
The Government, through the Intellectual Property Corporation of Malaysia (MyIPO) has 
been disseminating information on Copyright Tribunal at  seminars and workshops. 
MyIPO also promotes the services offered by the Copyright Tribunal via MyIPO 's 
website.  
Page 100, para 4.58:  
The Secretariat 's report explains the new National Auto Policy (NAP).  Under the NAP, does 
Malaysia intend to reduce excis e tax rates or take steps to eliminate the Applied Permit system?  If 
so, please explain.  
Answer : 
The Government will undertake an in -depth and comprehensive study on the impacts of 
AP termination.  
Page 99 -102, para 4.58 -4.60 
The Secretariat 's report discus ses the various support measures and incentives under Malaysia 's 
National Automotive Policy (NAP), none of which have been notified by Malaysia pursuant to Article 
25 of the SCM Agreement.  While the NAP was among various programs that Malaysia indicated in  
Q2/MYS16 as subsumed under the ITA, neither Malaysia 's notifications nor its responses to 
questions to date have adequately provided the information required under Article 25 of the SCM 
Agreement regarding this important program.  
a) Please explain the preci se legal relationship between NAP and ITA.  
b) As discussed in paragraph 3.78 of the Report: "for the period 2010 -14 companies in the 
automotive industry qualify for tax exemptions on statutory income equivalent to 30% or 
50% of the value of increased exports,  provided that the goods exported attain at least 
30% or 50% value -added respectively. " Please discuss the incentive provided under each 
of the three programs in light of Malaysia's obligations under the SCM Agreement, 
specifically taking into consideratio n Article 3.1(a) and (b) of the Agreement.  
c) When will Malaysia submit the requisite notification regarding all subsidies related to the 
NAP, with sufficient detail to satisfy the informational requirements of Article 25.3 of the 
SCM Agreement?  WT/TPR/M/2 92/Add.1  
 
- 186 - 
 
  Answer : 
There  is no legal relationship between NAP and Investment Tax Allowance (ITA). ITA is 
one of the facilities offered under NAP. The tax exemption on the Value of Increase 
Exports of Vehicles and Parts/ Components which has been introduced under NAP 2009 
was not implemented. The incentive is not continued under the NAP 2014.  
Malaysia is committed to fulfil its obligations under all WTO Agreements including the 
Agreement on Subsidies and Countervailing Measures (ASCM) and will continue to take 
measures to meet noti fication obligations.  
Page 101, para 4.60:  
The Secretariat 's report explains the excise taxes for automobiles. Please explain how imported 
automobiles are valued for the purposes of determining excise taxes, and how this valuation 
process differs from dom estically produced automobiles.  Please identify any offsets for excise 
taxes for imported automobiles provided for the use of domestically produced parts.  
Answer : 
The excise duty rebate is given to all motor vehicles and motorcycle 
manufacturers/assemblers  incorporated in Malaysia to assist in adjusting and 
maintaining their competitiveness in light of the liberalization exercises undertaken by 
Malaysia.  
Page 102, Box 4.1:   
The Secretariat 's report notes that in 2012, a new Legal Profession Act was gazette d, but has yet 
to enter into force.  It is our understanding that additional legislation regarding international 
arbitration services was passed in 2013 and we understand the Attorney Generals Chambers and 
Bar Council continue to work on regulations governi ng the inclusion of foreign lawyers and law 
firms in Malaysia's legal sector.  Please indicate the status of the Legal Profession act and any other 
related legal services liberalization efforts.  
Answer : 
For purposes of legal services liberalisation in Malay sia, three amendment Acts have 
been drafted and passed by the Parliament:  
(i) Legal Profession (Amendment) Act 2012 [Act A1444] – gazetted in September 
2012, but has yet to enter into force;  
(ii) Legal Profession (Amendment) Act 2012 (Amendment) Act 2013 [Act A1455 ] – 
gazetted on 1 November 2013, but has yet to enter into force; and  
(iii)  Legal Profession (Amendment) Act 2013 [Act A1456] – gazetted on 1 November 
2013, but has yet to enter into force.  
Under the Legal Profession (Amendment) Act 2012 [Act A1444], a new Part IVA is 
introduced under the Legal Professional Act 1976 [Act 166]. The new Part IVA contains 
new provisions to allow foreign lawyers to practice in Peninsular Malaysia, through 
International Partnerships between foreign law firms and domestic law firms, Qu alified 
Foreign Law Firms and employment of individual foreign lawyers by domestic law firms. 
Interested foreign law firms and foreign lawyers will apply to the Bar Council for the 
respective license in order to practice in Peninsular Malaysia. The license  will be issued 
by the Bar Council, upon recommendation by the Selection Committee.  
Under the Legal Profession (Amendment) Act 2012 (Amendment) Act 2013 [Act A1455], 
a new provision to prohibit the practice of fly -in, fly -out of foreign lawyers has been 
included. This provision is to effectively monitor the entry of foreign lawyers into 
Malaysia, by expressly prohibiting foreign lawyers from coming into Malaysia to provide WT/TPR/M/2 92/Add.1  
 
- 187 - 
 
  legal service without having to satisfy the requirements under the new Part IVA. 
Howe ver, foreign lawyers will not be caught under this prohibition if they are present in 
Malaysia for 60 days or less.  
Under the Legal Profession (Amendment) Act 2013 [Act A1456], a new provision to 
expressly exclude the application of the LPA to arbitration proceedings. This is to 
promote the Kuala Lumpur Regional Centre for Arbitration to be the main arbitration 
centre in the region and in line with the new amendments to the LPA which allow 
foreign lawyers to practice in Malaysia.  
It is envisaged that all th ree amendments (as above) will enter into force in 2014 
simultaneously and will be applicable immediately to foreign lawyers intending to 
practice in Malaysia once the amendments have entered into force.  
Page 15, paragraph 3.10  
Please identify any formal m echanisms for appealing a refusal by the Department of Islamic 
Development Malaysia (JAKIM) to certify a product as halal, as well as any additional costs such an 
appeal might require.  What is the timeframe for such appeals?   
How does Malaysia view halal c ertification in light of the WTO TBT agreement?   
Answer : 
WTO TBT Agreement does not prohibit a member country from practicing halal 
certification. However, a member country is bound to the transparency elements to 
avoid any trade barriers to trade. Therefo re, halal per se is not a trade barrier since it is 
a religious matter.  
Malaysia notified the Malaysia Protocol for Halal Meat and Poultry Productions in 2011 
as part of Malaysian commitment to the WTO TBT agreement.  
Pages 15 -16, paragraphs 3.12 -3.14:   
In October 2011, the Government announced further liberalization of 18 service sub -sectors, with 
the aim of attracting foreign investment. Of the 18 services sub -sectors the Malaysian government 
announced it would liberalize, two (engineering and accounting s ervices), have not had the 
necessary legislation tabled. Please explain the timeframe in which the Government intends to 
liberalize these sub -sectors.  
Answer : 
All measures announced are already in force and implemented effective from the dates 
of announcem ent except for legal services, engineering services, architectural services 
and quantity surveying services. Amendments to the relevant Acts for these sectors are 
at the final stages of completion.  
PART III: Other Questions   
The Prime Minister's office dir ected all Ministries to post draft legislation and regulations on the 
internet for public comment. Please confirm this policy, including where such legislation is posted.  
Answer : 
The policy was issued through the Chief Secretary 's circular on 25 April 2012 . According 
to the circular, the Ministries are required to publish their draft legislations and 
regulations in their respective Ministries ' website for public comments. Guidelines are 
being developed for implementation this year.  WT/TPR/M/2 92/Add.1  
 
- 188 - 
 
  FOLLOW -UP QUESTIONS  
Page 37, paragraph 3.5:   
The Secretariat 's report indicates that Malaysia maintains subsidies contingent upon export 
performance, in particular "statutory income tax exemptions ranging from 10% to 50% of the 
value of increased exports. " Further, the report ment ions promotion measures for export 
processing zones "involving local -content requirements since 2011. " None of these subsidies were 
covered in Malaysia 's last notification under Article 25 of the SCM Agreement in G/SCM/N/220/MYS 
(October 14, 2011).  
How do es Malaysia view these subsidies in light of Article 3.1 (a) and (b) of the SCM Agreement?  
What steps is Malaysia taking to bring these programs in line with its commitments under the SCM 
Agreement?  
When will Malaysia fully notify these subsidies in line with the informational requirements of Article 
25.3 of the SCM Agreement?  
Answer : 
As we are moving toward a high income nation, it is imperative for Malaysia to increase 
participation in international trade. The initiative is to encourage Malaysian compani es 
particularly SMEs to be more active in international trade and adding greater value to 
the products.  
A Free Zone is an area in any part of Malaysia that is declared by the Minister of Finance 
under the provision of Section 3(1) of the Free Zones Act 199 0, as a Free Commercial 
Zone or Free Industrial Zone. The activities and industries therein are subject to minimal 
customs formalities as it is deemed under Section 2 (1A) of the customs Act 1967 to be 
a place outside the Principal Custom Area except in re spect of Prohibition of Imports 
and Exports under Section 31 of the Customs Act 1967. Hence, products from companies 
located in the Free Industrial Zones (FIZ) destined for Malaysian domestic market are 
considered as imported products and subjected to impo rt duty at MFN/applied rates.  
However, effective 1 January 2011, products produced in the FIZ destined for the 
Malaysian market are eligible to enjoy ASEAN or ATIGA duty rates if they complied with 
the origin criteria, i.e. local content or substantial tr ansformation.  
U.S. Follow -up Question:  
In response to the United States ' question regarding page 37, paragraph 3.5 of the Secretariat 's 
Report, Malaysia stated that as of January 1, 2011, products produced in a FIZ are eligible to 
enjoy ASEAN or ATIGA du ty rates if sent to the domestic Malaysian market.  Apart from duty rates, 
what other benefits, such as reduced tax rates, do products produced in the FIZs enjoy?  What are 
the specific local content criteria for these products?  
Answer:  
There are no other be nefits received.  
Page 40, paragraph 3.18 :   
The Secretariat 's report describes the "gazetted price system " for imports of completely built up 
(CBU) motor vehicles. Please explain why the "gazette price " is used exclusively for motor 
vehicles. How does Mala ysia view the use of "gazette price " in light of the WTO Agreement on 
Customs Valuation? If the transaction value is the basis for the "gazette price, " why must 
importers use the gazette process prior to importation instead of simply declaring the transact ion 
value at the time of importation?  WT/TPR/M/2 92/Add.1  
 
- 189 - 
 
  Answer : 
The gazetted price system is introduced as a reference price to assist the Customs 
Department to determine the value of any dutiable vehicles for the purpose of payment 
of levy and customs duties. An importer w ho disagrees with the gazetted price can 
submit an appeal for further evaluation and investigation by Customs Department.  
The value fixed under Section 12 of the Customs Act 1967 is based on the proposal by a 
Panel, which reviews all the relevant importati on documents and data or information 
available in Malaysia. Customs value will be derived on the basis of a hierarchy order of 
valuation rules as follows:  
g) Transaction value or Transaction value plus adjustment under regulation 4 and 5;  
h) The transaction valu e of identical goods under regulation 6;  
i) The transaction value of similar goods under regulation 7;  
j) The deductive value of the imported goods under regulation 8;  
k) The computed value of the imported goods under regulation 9 (not applicable in the 
cases of im ported CBU cars); and  
l) Flexible valuation allowed.  
U.S. Follow -up Question:   
We note that some of the questions have not been answered. We remain interested in the 
following:  
- Please explain why the "gazette price " is used exclusively for motor vehicles.  
- If the transaction value is the basis for the "gazette price, " why must importers use the 
gazette process prior to importation instead of simply declaring the transaction value at 
the time of importation?  
Answer:  
Due to the high duty rates and for the purpo se of transparency and to standardise 
values for imported vehicles, the government adopted the gazetting price of commercial 
vehicles. The gazetted value is considered as guidelines and basis for computation of 
customs duty. If there is a significant diffe rence in value between the gazetted price and 
the transaction price, importers may request for a review and will be requested to 
justify the difference to enable the Panel to consider accepting the transaction value.  
Page 59, paragraph 3.78:   
According to the Secretariat 's report, manufacturing companies are eligible for "tax exemption on 
statutory income, equivalent to 10% or 15% of the value of increased exports, provided that the 
goods exported attain at least 30% or 50% value -added, respectively. " Such a program raises 
questions, considering the provisions of Article 3.1(a) and (b) of the SCM Agreement prohibiting 
export and local -content subsidies. We note that none of these incentives were covered in 
N220/MYS.  
c) Please discuss this program in light of M alaysia's obligations under the SCM Agreement.  
d) Additionally, when will Malaysia submit the requisite notification regarding these subsidies, 
with sufficient detail to satisfy the informational requirements of Article 25.3 of the SCM 
Agreement?  WT/TPR/M/2 92/Add.1  
 
- 190 - 
 
  Answer : 
As we are moving toward a high income nation, it is imperative for Malaysia to increase 
participation in international trade. The initiative is to encourage Malaysian companies 
particularly SMEs to be more active in international trade and adding greater valu e to 
the products.  
U.S. Follow -up Question:  
We remain interested in a response to the submitted questions, which have not yet been 
answered. Specifically:  
- How does Malaysia view this program in light of Malaysia's obligations under the SCM 
Agreement.  
Answer:  
Malaysia is committed to fulfil its obligations under all WTO Agreements including the 
Agreement on Subsidies and Countervailing Measures (ASCM) and will continue to take 
measures to meet notification obligations.  
When will Malaysia submit the requis ite notification regarding these subsidies, with 
sufficient detail to satisfy the informational requirements of Article 25.3 of the SCM 
Agreement?  
Answer:  
An exercise is currently being undertaken to satisfy the obligations under the SCM 
Agreement.  
Page 7 6, Para 3.125:  
The Secretariat 's report indicates that geographical indications may be protected in Malaysia and 
that Malaysia has registered 22 geographical indications.  
 What are the grounds for denying protection or recognition to a geographical indicat ion?  
 Do such grounds include prior trademark rights that would likely cause confusion in Malaysia 
and evidence that the proposed term is recognized as a generic term by the Malaysian 
consumer?  
 Can terms that have been granted protection and registered as geographical indications in 
Malaysia be cancelled or invalidated?  
 If so, what are the grounds for cancelling or invalidating a protected and registered 
geographical indication in Malaysia?  
Answer : 
 The Geographical Indications Act 2000 provides four ground s for exclusion from 
protection and they are as follows:  
(v)  Geographical indications that do not correspond to the meaning of 
"geographical indication " as defined in section 2: an indication which 
identifies any goods as originating in a country or territory , or a region or 
locality in that country or territory, where a given quality, reputation or 
other characteristic of the goods is essentially attributable to their origin.  
(vi)  Geographical indications which are contrary to public order or morality;  WT/TPR/M/2 92/Add.1  
 
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  (vii)   Geographi cal indications which are not or have ceased to be protected in 
their country or territory of origin; or  
(viii)   Geographical indications which have fallen into disuse in their country or 
territory of origin.  
 Where a trade mark has been applied for or registered  in good faith, or where 
rights to a trade mark have been acquired through use in good faith either (i) 
before the commencement of the Geographical Indications Act 2000 or (ii) before 
the geographical indication is protected in its country of origin, the A ct shall not 
prejudice the registrability or the validity of the registration of the trade mark, or 
the right to use the trade mark on the basis that such a trade mark is identical 
with or similar to a geographical indication.  
 An exception from protection shall apply in respect of a geographical indication 
of any country to goods or services for which the relevant indication is identical 
with the term customary in common language as the common name or generic 
term for such goods or services in Malaysia.  
 Registration of a geographical indication may be cancelled on four grounds 
provided under section 4 of the Geographical Indications Act and they are as 
follows:  
(v) Geographical indications that do not correspond to the meaning of 
"geographical indication " as def ined in section 2: an indication which 
identifies any goods as originating in a country or territory, or a region or 
locality in that country or territory, where a given quality, reputation or 
other characteristic of the goods is essentially attributable t o their origin.  
(vi) Geographical indications which are contrary to public order or morality;  
(vii)  Geographical indications which are not or have ceased to be protected in 
their country or territory of origin; or  
(viii)  Geographical indications which have fallen into disu se in their country or 
territory of origin.  
U.S. Follow -up Questions:  
- To clarify, will protection of geographical indications be denied based on prior trademark 
rights that would likely cause confusion in Malaysia?  Also, may owners of prior trademark 
rights file cancellation and opposition proceedings against later -filed geographical 
indications?  
- In response to the question on whether the grounds for denying protection or recognition to 
the geographical indication included evidence that the proposed term i s recognized as a 
generic term by the Malaysian consumer, Malaysia indicated that "[a]n exception from 
protection shall apply in respect of a geographical indication of any country to goods or 
services for which the relevant indication is identical with th e term customary in common 
language as the common name or generic term for such goods or services in Malaysia."   
May interested third parties file opposition, cancellation, or invalidation proceedings based 
upon this ground?   
Answer:  
  The Geographical Ind ications Act 2000 (the Act) will not deny the protection of 
geographical indications based on prior trade mark rights. However, the Act does 
not prejudice the registrability or the validity of the registration of the trade 
mark, or the right to use the tra de mark on the basis that such a trade mark is 
identical with or similar to a geographical indication if the rights to a trade mark  WT/TPR/M/2 92/Add.1  
 
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  have been acquired through use in good faith either (a) before the 
commencement of the Act; or (b) before the geographical i ndication is protected 
in its country of origin.  
  Any interested person may request for cancellation of registration, however, the 
registration of a geographical indication will only be cancelled on the ground that 
the geographical indication does not qual ify for protection as such having regard 
to section 4 of the Act (exclusion from protection).  
  Any interested person may oppose the geographical indication applications 
within two months from the date of advertisement on the ground that the 
geographical in dication:  
(i) Does not fall within the meaning of the definition of "geographical indication" 
under the Act;  
(ii) Is contrary to public order or morality;  
(iii)  Is not or has ceased to be protected in its country of origin; or  
(iv) Has fallen into disuse in its country of ori gin. 
 Any interested party may file opposition on the grounds provided under section 14 
of the Act and the ground for cancellation is provided under section 22 of the Act.  
Page 99 -102, para 4.58 -4.60 
The Secretariat 's report discusses the various support me asures and incentives under Malaysia 's 
National Automotive Policy (NAP), none of which have been notified by Malaysia pursuant to Article 
25 of the SCM Agreement. While the NAP was among various programs that Malaysia indicated in 
Q2/MYS16 as subsumed unde r the ITA, neither Malaysia 's notifications nor its responses to 
questions to date have adequately provided the information required under Article 25 of the SCM 
Agreement regarding this important program.  
d) Please explain the precise legal relationship betw een NAP and ITA.  
e) As discussed in paragraph 3.78 of the Report: "for the period 2010 -14 companies in the 
automotive industry qualify for tax exemptions on statutory income equivalent to 30% or 
50% of the value of increased exports, provided that the goods e xported attain at least 
30% or 50% value -added respectively. " Please discuss the incentive provided under each 
of the three programs in light of Malaysia's obligations under the SCM Agreement, 
specifically taking into consideration Article 3.1(a) and (b) o f the Agreement.  
f) When will Malaysia submit the requisite notification regarding all subsidies related to the 
NAP, with sufficient detail to satisfy the informational requirements of Article 25.3 of the 
SCM Agreement?  
Answer:  
There is no legal relationship between NAP and Investment Tax Allowance (ITA). ITA is 
one of the facilities offered under NAP. The tax exemption on the Value of Increase 
Exports of Vehicles and Parts/ Components which has been introduced under NAP 2009 
was not implemented. The incentive  is not continued under the NAP 2014.  
Malaysia is committed to fulfil its obligations under all WTO Agreements including the 
Agreement on Subsidies and Countervailing Measures (ASCM) and will continue to take 
measures to meet notification obligations.  WT/TPR/M/2 92/Add.1  
 
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  U.S. Follow -up Question:   
In January 2014, Malaysia launched the National Automotive Policy (NAP) 2014, establishing key 
directions and policy measures for the national auto industry, complemented by six roadmaps and 
action plans for implementation of the poli cy. A key objective of the NAP is to increase exports of 
vehicles and automotive components to reach a minimum value of RM 10 billion by 2020.  Could 
Malaysia please explain the role of the government in the implementation of the NAP?  Specially, 
please expl ain any government support measures that will be used to carry -out and achieve the 
NAP's goals.  To the extent that any government support measures meet the definition of a specific 
subsidy as defined by the WTO Subsidies Agreement, the United States respec tfully requests that 
Malaysia appropriately notify any such subsidies as soon as required.  
Answer:  
In the implementation of NAP 2014, other than introducing new measures that are 
aligned to the global and regional technology changes and latest automotive 
developments, the Government has also outlined measures and implementation plans to 
make Malaysia as the regional hub for Energy Efficient Vehicle (EEV) by 2020. The 
measures include provisions for financial packages in terms of soft loans for the 
developme nt of vendors and infrastructure while grants are offered for human capital 
and Bumiputera Development.  
Page 101, para 4.60:  
The Secretariat 's report explains the excise taxes for automobiles. Please explain how imported 
automobiles are valued for the purposes of determining excise taxes, and how this valuation 
process differs from domestically produced automobiles. Please identify any offsets for excise 
taxes for imported automobiles provided for the use of domestically produced parts.  
Answer : 
The excise duty rebate is given to all motor vehicles and motorcycle 
manufacturers/assemblers incorporated in Malaysia to assist in adjusting and 
maintai ning their competitiveness in light of the liberalization exercises undertaken by 
Malaysia.  
U.S. Follow -up Question:  
We remain interested in a response to the submitted questions, which have not yet been fully 
answered.  
- Please explain how imported autom obiles are valued for the purposes of determining excise 
taxes.  
- How are domestically produced automobiles valued for purposes of determining excise 
taxes?  
- Please specify the offsets for excise taxes for imported automobiles.  
Answer : 
Under the Excise Act 1976 "value"  means:  
(a) in relation to locally manufactured goods, the price which a buyer would give for the 
goods on purchase in the open market at the time when duty is payable but will exclude 
any excise duty, costs, charges and expenses of transporta tion and storage immediately 
after removal from the place of manufacture; and  WT/TPR/M/2 92/Add.1  
 
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  (b) in relatio n to imported goods:  
 (i) the value of such goods for the purpose of customs duty determined in 
 accordance with the Customs Act 1967; and  
 (ii) the amount of cust oms duty, if any, payable on such goods.  
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