IMPLEMENTATION OF MANDATORY STANDARD ON METAL PRODUCTS MINISTRY

IMPLEMENTATION OF MANDATORY STANDARD ON METAL PRODUCTS MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY (MITI) 3/16/2018 OUTREACH PROGRAMME 1

PURPOSE To provide latest updates on MITI policies on implementation of mandatory standards on metal products 3/16/2018 OUTREACH PROGRAMME 2

SCOPE…. WHAT WILL BE PRESENTED? • Introduction to Mandatory Standards • Objectives of Mandatory Standards • Chronology of Implementation • Implementation of Mandatory Standards • Exemption of COA • Simplification of Application Procedures • Updates on the Implementation of Mandatory Standards • Conclusion 3/16/2018 OUTREACH PROGRAMME 3

INTRODUCTION OF MANDATORY STANDARDS • Under the IMP 3 (2006 -2020): - develop, introduce and enforce mandatory standards on iron and steel products; and - enter into MRAs with trading partners. • The absence of mandatory standards has caused difficulties in ensuring the required quality for locally produced and imported products. • Mandatory Malaysian Standards on iron and steel products will be imposed in stages for both imported and locally produced products of iron and steel as stipulated under IMP 3. 3/16/2018 OUTREACH PROGRAMME 4

OBJECTIVES OF MANDATORY STANDARDS • To ensure only products of acceptable quality are imported or produced locally; • To protect the interests of local industries, consumers and environment; and • Safeguard product quality, safety, technical standards to meet health, safety and environment requirements. 3/16/2018 OUTREACH PROGRAMME 5

CHRONOLOGY OF IMPLEMENTATION • On 19 June 2003, the Government introduced Malaysian Mandatory Standards on 4 tariff codes of wire products: - 7217. 10. 000; 7308. 40. 900; 7312. 10. 000; and 7314. 39. 000. • Any products fall under these tariff codes must get Certificate of Approval (COA) issued manually by CIDB. 3/16/2018 OUTREACH PROGRAMME 6

CHRONOLOGY OF IMPLEMENTATION (Cont. ) • Effective 15 November 2008, mandatory standards have been enforced on 57 tariff codes of iron and steel products: - Billets; - Steel bars; - Wire rods; - Angles, shapes and sections; and - Non-alloy steel. • Effective 1 August 2009, mandatory standards were enforced on 627 tariff codes: - HRC (Hot Rolled Coils); - CRC (Cold Rolled Coils); and - Pipes and tubes. • Effective 13 August 2009, MITI has temporarily suspended the imposition of mandatory standards enforced on 1 August 2009 to address implementation issues. 3/16/2018 OUTREACH PROGRAMME 7

CHRONOLOGY OF IMPLEMENTATION (Cont. ) • On 13 October 2009, mandatory standards on 187 tariff lines for iron and steel were enforced and superseded earlier Orders: - 57 tariff lines made mandatory on 15 Nov. 2008; and - 627 tariff lines made mandatory on 1 st August 2009. • Products include intermediate raw materials such as: - HRC; - CRC; - Steel bars; - Billets; - Sections; - Wire rods; - Pipes and tubes; - Scaffodling; - Sheet piles; - Rails; and - anhole covers. 3/16/2018 OUTREACH PROGRAMME 8

IMPLEMENTATION OF MANDATORY STANDARDS • Importation enforcement under Customs Order (Import Prohibition). • Importation must acquired CERTIFICATE OF APPROVAL (COA) issued based on testing and verification for standard compliances. • Enforcement agencies/Issuance bodies: - CIDB for construction products; and - SIRIM QAS Intl. for non-construction & manufacturing products. COA = 3/16/2018 Certificate issued by SIRIM QAS Intl, or CIDB certifying that imports conform to the requirements of Malaysia Standards or other International Standards where Malaysia not available. OUTREACH PROGRAMME 9

IMPLEMENTATION OF MANDATORY STANDARDS (Cont) • Testing Bodies ü SIRIM Berhad ü IKRAM QA Services Sdn. Bhd; and ü Any accredited laboratories/testing bodies as recognised by Standards Malaysia • KKR is amending the CIDB Act 1994 which will impose mandatory standards on imported and local materials for usage in construction sector: üpassed at the Parliament on 12 July 2011; and üscheduled for implementation in 2012. 3/16/2018 OUTREACH PROGRAMME 10

EXEMPTION FROM THE COA REQUIREMENT (a) Automatic Exemption • Manufacturers with Licensed Manufacturing Warehouse (LMW) status and companies operating in Free Industrial Zones (FIZ); or • Importation per item weighing 500 kg and below 3/16/2018 OUTREACH PROGRAMME 11

EXEMPTION FROM THE COA REQUIREMENT (Cont) b) Based on application basis • Manufacturers (Tier 1 & Tier 2) who are directly involved in oil and gas, automotive, gas automotive maritime or shipbuilding, aerospace and E&E shipbuilding sectors; and • Steel service centres, the exemption will be centres considered only for products imported for the consumption of oil and gas, automotive, maritime or shipbuilding, aerospace and E&E sectors. 3/16/2018 OUTREACH PROGRAMME 12

SIMPLIFICATION OF APPLICATION PROCEDURES • Online COA application via Dagang Net since 13 October 2009; • Testing and verification prior to the issuance of COA will take 1 -3 working days; days • To avoid delays and additional charges in customs clearance at customs entry points, SIRIM and CIDB will issue temporary COA to importers to transport the imported products to their factory premises, prior to product premises testing and verification process; 3/16/2018 OUTREACH PROGRAMME 13

SIMPLIFICATION OF APPLICATION PROCEDURES • The measure to recognise testing and verification reports from accredited foreign laboratories under the mutual recognition arrangement (MRA) is encouraged to simplify MRA compliance to mandatory standards, subject to the approval from the Department of Standards; and • Rate of charges for testing and verification, as well as issuance of COA, has been reduced by SIRIM by 39% in 2009.

UPDATES ON THE IMPLEMENTATION OF MANDATORY STANDARDS Committee for application of COA exemption has been established to discuss issues arising from the implementation of mandatory standards. Committee members - officials from SIRIM QAS Intl, CIDB, MOF, Customs, MIDA and Standards Malaysia. The Committee will be chaired by Senior Director, Sectoral Policy & Investment Affairs, MITI. TOR of the Committee are: ü to verify applications received by MITI for COA exemption; ü to address and discuss any issues with respect to the implementation of COA; ü To update & monitor the issuance of COA by SIRIM QAS Intl and CIDB; and ü to review the procedures and guidelines for COA. 3/16/2018 OUTREACH PROGRAMME 15

IMPLEMENTATION OF MANDATORY STANDARDS ON ALUMINIUM PRODUCTS • Only products comply with mandatory standards are allowed to be imported and produced locally; • To ensure raw materials in end products meet the quality and safety requirements; • To monitor importation of sub-standards products; • To enhance competitiveness and quality of local aluminium industry; and • To reduce dependency on imported products as local producers are able to meet required standards. 16 3/16/2018 OUTREACH PROGRAMME 16

üAluminium usage powerlines Cooking Equipment packaging furniture 3/16/2018 Construction OUTREACH PROGRAMME Transport 17

üAluminium products for Mandatory Standards HS Code HS 7606 11 000 HS 7606 12 000 HS 7606 91 000 HS 7606 92 000 3/16/2018 Description Application Aluminium plates, sheets and strip; of a thickness exceeding 0. 2 mm, rectangular (include square), whether alloyed or unalloyed Building material, signage, fabrication Other aluminium plates, component and sheets & strips; of a thickness other engineering exceeding 0. 2 mm: whether applications Standard Application MS 2040: 2007 alloyed or unalloyed OUTREACH PROGRAMME 18

üAluminium products for Mandatory Standards (Cont. ) HS Code HS 7607 11 000 HS 7607 19 000 Description Application Standard Application Aluminium foil (whether or not printed or backed with paper, paperboard, plastics or similar backing materials), of a thickness (excluding any backing) not Material for exceeding 0. 2 mm, not backed: manufacturing of air rolled but not further worked -cond, building insulation and other MS 1848: 2005 Other aluminium foil (whether or types of food not printed or backed with paper, packaging paperboard, plastics or similar backing materials), of a thickness (excluding any backing) not exceeding 0. 2 mm not backed 3/16/2018 OUTREACH PROGRAMME 19

üSchedule of Implementation 1 st November 2011: ENFORCEMENT Aug-Sept 2011: Outreach Programmes by SIRIM and CIDB September 2011: Gazette of the mandatory standards on 6 aluminium products 3/16/2018 OUTREACH PROGRAMME 20

üEnforcement Agencies/Issuance Bodies • To be enforced based on the current procedures for mandatory standards on iron & steel: ü Importation enforcement under Customs Order (Import Prohibition). ü Enforcement will be divided into construction and manufacturing products. Importation must acquired CERTIFICATE OF APPROVAL issued based on testing and verification for standard compliances: - CIDB for construction products; and - SIRIM QAS Intl. for non-construction & manufacturing products. 3/16/2018 OUTREACH PROGRAMME 21

CONCLUSION • Implementation of mandatory standards will: ü minimise importation of sub-standards products; ü ensure consumer’s safety and health; and ü support development and competitiveness of local producers by producing high quality products that meet international standards. The absence of mandatory standards had caused difficulties in ensuring the required quality for locally produced and imported products. Mandatory Standards on metal products would be accelerated, implemented and enforced in stages for both imported and locally produced products. 3/16/2018 OUTREACH PROGRAMME 22

Thank You 3/16/2018 OUTREACH PROGRAMME 23