• Jason Teoh

Trade Remedies in Malaysia

Overview

In Malaysia, the Safeguards Act 2006 and Countervailing and Anti-Dumping Duties Act 1993 provide that:-


a) any safeguards, anti-dumping and/or countervailing petition to be submitted to the Minister of International Trade and Industries (“MITI Minister”) who will decide on whether to initiate an investigation into the matter;


b) in practice, the MITI Minister will delegate his investigative authority to the Trade Practices Section of the Ministry of International Trade and Industries (MITI), (“the Investigating Authority/IA”) to handle the investigation aspect of the matter (including conducting verification visits and preparing the statutory disclosures);


c) based on the preliminary determination report, notice of essential facts and final determination reports prepared by the IA, the MITI Minister will make his recommendation to the Minister of Finance, who has the final say on whether or not to implement the said recommendation.


General Investigation Process


In investigating a trade remedy petition from an alleged aggrieved domestic industry of a product (“Petitioner”), the IA will seek to assess the petition filed. A petition will usually contain the following information:-


  • the identity of the domestic industry producers, manufacturers, distributors including any affected upstream and downstream stakeholders and regional producers, if any;

  • the petitioner must show that a major proportion of the said affected domestic industry producing the goods under consideration supports the petition;

  • a detailed description of the merchandise that defines the requested scope of the investigation, including technical characteristics and uses of such merchandise and its current Malaysian tariff classification;

  • the country in which the merchandise is produced and, if such merchandise is imported from a country other than that in which it is produced, the name of the intermediate country;

  • the identity of each party the Petitioner believes is producing the merchandise for export or is exporting to Malaysia and is selling the merchandise at prices below the normal value;

  • other factual information, particularly documentary evidence, relevant to the claim of a surge, dumping and/or injury, as the case may be.


On receipt of a trade remedy petition from the domestic industry or local producers, the Government of Malaysia (“GOM”) will notify the government(s) of the exporting countries concerned of such a petition filed. The IA will conduct a preliminary investigation to determine the accuracy of the evidence presented, the level of support or opposition of the petition by the domestic industry, and the public interest involved.


If an investigation is warranted, GOM will:-


  • notify all interested parties (foreign government/manufacturers concerned, local importers) of the decision to initiate the relevant investigation as the case may be;

  • publish a notice of initiation of investigation, and gazette the same;

  • seek the required information, which includes but not limited to information on prices and injury factors from the identified foreign producers or exporters and local importers;

  • At a time to be determined, conduct verification visits on the questionnaire respondents to verify the information received;

  • in the case of a safeguards investigation, hold a public hearing;

  • publish the required statutory disclosures;

  • consider all points made by interested parties and stakeholders


before making a final determination on this matter. As Malaysia is a WTO member, its trade remedies law is expected to conform to the minimum standards set under WTO law.


The Crystal Ball


In the last eight years, Malaysia has been an active user of trade remedies, with an average of 3-5 investigations per year, from 0- 1 investigation per annum.


The steel industry, in particular, has filed anti-dumping and safeguards petitions (interim and sunset reviews) for products ranging from hot rolled coils, cold-rolled coils, steel wire rods, rebars, galvanised iron, galvalume, and stranded wires. Other industries like the PET, ceramic tiles and cement sheets industries are catching up.


The Malaysian domestic industry has also attempted to use rules of origin investigations and the introduction of standards to control the alleged inflow of imported goods.

Newton’s Third Law states that for every action, there is a reaction. As Malaysia’s profile as a new trade remedies user gained steady traction, we observe that more and more Malaysian exporters are targeted overseas, particularly in India, the United States, Australia, Vietnam, the EU and Turkey.


With the WTO Appellate Body in a state of flux and better-informed companies, we also noticed that aggrieved exporters are more willing to review the decisions to impose trade remedies duties in the domestic High Court.


We conclude by observing that Malaysia has not initiated any countervailing investigations to date. However, with the increased scrutiny on Malaysian exporters in this respect overseas, it is a matter of time before the GOM initiates the first countervailing investigation. The experience gained from responding to multiple foreign countervailing investigations will come in handy when that happens.




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