MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY (MITI)

1. IMPLEMENTATION OF MANDATORY STANDARD ON METAL PRODUCTS MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY (MITI) OUTREACH PROGRAMME

2. PURPOSE To provide latest updates on MITI policies on implementation of mandatory standards on metal products OUTREACH PROGRAMME

3. 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 OUTREACH PROGRAMME

4. INTRODUCTION OF MANDATORY STANDARDS • Under the IMP3 (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 IMP3. OUTREACH PROGRAMME

5. 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. OUTREACH PROGRAMME

6. 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. OUTREACH PROGRAMME

7. 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. OUTREACH PROGRAMME

8. 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 1st 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. OUTREACH PROGRAMME

9. 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 = 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

10. IMPLEMENTATION OF MANDATORY STANDARDS (Cont) • Testing Bodies • SIRIM Berhad • IKRAM QA Services Sdn. Bhd; and • 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: • passed at theParliamenton 12 July 2011; and • scheduled for implementation in 2012. OUTREACH PROGRAMME

11. 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 500kg and below. OUTREACH PROGRAMME

12. 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, maritime or shipbuilding, aerospace and E&E sectors; and • Steel service centres, the exemption will be considered only for products imported for the consumption of oil and gas, automotive, maritime or shipbuilding, aerospace and E&E sectors. OUTREACH PROGRAMME

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

14. 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 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.

15. 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: • to verify applications received by MITI for COA exemption; • to address and discuss any issues with respect to the implementation of COA; • To update & monitor the issuance of COA by SIRIM QAS Intl and CIDB; and • to review the procedures and guidelines for COA. OUTREACH PROGRAMME

16. 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. OUTREACH PROGRAMME 16

17. Aluminium usage powerlines Cooking Equipment packaging Transport furniture Construction OUTREACH PROGRAMME

18. Aluminium products for Mandatory Standards OUTREACH PROGRAMME

19. Aluminium products for Mandatory Standards (Cont.) OUTREACH PROGRAMME

20. Schedule of Implementation OUTREACH PROGRAMME

21. Enforcement Agencies/Issuance Bodies • To be enforced based on the current procedures for mandatory standards on iron & steel: • ImportationenforcementunderCustoms Order (Import Prohibition). • Enforcement will be divided into construction and manufacturing products. Importation must acquiredCERTIFICATE OF APPROVAL issued based on testing and verification for standard compliances: • - CIDB forconstructionproducts; and • SIRIM QAS Intl. fornon-construction & manufacturingproducts. OUTREACH PROGRAMME

22. CONCLUSION • Implementation of mandatory standards will: • minimise importation of sub-standards products; • ensureconsumer’s safety and health; and • supportdevelopment and competitiveness of local producers by producing high quality products that meetinternationalstandards. • 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. OUTREACH PROGRAMME

23. Thank You OUTREACH PROGRAMME