Malaysia

In Malaysia, intellectual property (IP) is no longer confined to private enterprise, it has become an increasingly valuable asset within the public sector. Government agencies, statutory bodies, and public universities generate significant IP through publicly funded research, administrative innovation, and service delivery improvements. The National Intellectual Property Policy (NIPP) provides the overarching framework, while the Intellectual Property Corporation of Malaysia (MyIPO) administers the regulatory regime. However, the practical management of IP in the public sector is largely decentralised, raising important legal and policy considerations. This article examines the importance and function of IP policy within the Malaysian public sector, with particular emphasis on the protection of publicly funded assets, the facilitation of commercialisation, and the establishment of legal certainty in ownership and entitlement.     Importance of IP Policy in the Malaysian Public Sector   An IP policy is a strategic tool presented as a single written document that provides frameworks for the administration and management of an organisation's intellectual property. It covers critical areas such as IP creation, ownership, utilisation, and protection, while also defining the rights and obligations of employees and the nature of interactions with third parties. The primary purpose of such a policy is to establish clear guidelines for the registration, disclosure, and commercialisation of assets, ensuring that an organisation can effectively pursue its missions and visions through its IP activities.   Protection of Publicly Funded Intellectual Assets   Public sector entities are custodians of innovations generated using state resources. Institutions such as Universiti Malaya and Malaysian Agricultural Research and Development Institute routinely produce patentable inventions, proprietary data, and copyrighted works.   In the absence of a structured IP policy:   Ownership may be ambiguous Rights may be inadvertently waived or lost Public assets risk misappropriation   A well-defined IP policy ensures that such assets are properly vested, protected, and enforceable, consistent with statutory regimes such as the Patents Act 1983 and Copyright Act 1987.   Enabling Commercialisation and Revenue Generation   A key policy objective under the NIPP is the commercial exploitation of IP. Public sector IP policies provide the legal and procedural infrastructure necessary to:   License technology to industry players Facilitate joint ventures and public-private partnerships Establish spin-off entities   This is particularly relevant where agencies collaborate with investment-focused bodies such as Malaysian Investment Development Authority, which emphasise IP protection as a factor in attracting foreign direct investment. From a legal standpoint, IP policies function as risk allocation instruments, clarifying rights prior to commercial engagement.   For instance, Universiti Putra Malaysia (UPM), supported by annual grants of approximately RM50 million to RM60 million from government ministries and industry partners, has successfully commercialised 278 intellectual properties across various sectors, generating an estimated RM82.78 million in gross sales while maintaining a portfolio of 385 IP assets. Through royalty and licensing arrangements ranging from 1% to 5%, UPM demonstrates how a structured IP framework enables publicly funded research to be translated into tangible economic and commercial outcomes.   Further, innovation initiatives within the public sector, such as the Kumpulan Inovatif dan Kreatif (KIK), similarly underscore the necessity for a structured and coherent IP policy framework. Whilst KIK has been effective in fostering creativity, efficiency, and process-driven improvements across government agencies, the absence of clear and standardised IP guidelines may give rise to uncertainty as to ownership, insufficient legal protection, and the underutilisation of innovations produced thereunder. Accordingly, a comprehensive IP policy remains imperative to ensure that such outputs are properly identified, duly protected by law, and, where appropriate, systematically developed, managed, and commercially exploited.   Certainty in Ownership and Revenue Allocation   One of the most critical functions of an internal IP policy is to resolve proprietary entitlement.   Typical issues include:   Whether IP vests in the Government, the agency, or the individual creator The extent of employer rights over employee-created works Distribution of royalties or commercial proceeds   Clear policy provisions mitigate disputes and align with principles of employment law and fiduciary duty. More importantly, they serve as incentive mechanisms, ensuring that innovators within the public sector are adequately recognised and rewarded.     Conclusion   In conclusion, while innovation initiatives within the Malaysian public sector continue to generate valuable outputs, it is the existence of a coherent and structured IP policy framework that ultimately determines whether such outputs can be effectively protected, managed, and leveraged. The NIPP provides essential direction at the national level, but greater consistency in implementation across government agencies remains necessary.   As demonstrated through initiatives such as UPM’s successful IP commercialisation efforts and innovation-driven programmes like KIK, the existence of a clear and structured IP policy framework is crucial in bridging the gap between research output and market application. Ultimately, a robust IP policy not only safeguards public assets but also enhances economic value creation, encourages collaboration with industry, and ensures that innovation within the public sector is sustainably managed and equitably rewarded.     Written by: Ahmad Hafiz Zubir (Partner) [email protected] Nur Alya Azahan (Trainee Solicitor) [email protected]     Corporate Communications Azmi & Associates 24 April 2026

As Malaysia accelerates its pursuit of net-zero carbon emissions by 2050, a fundamental question surfaces: should nuclear power form part of the nation’s energy strategy? Industrialisation, rapid urbanisation, and the expansion of digital and manufacturing sectors are intensifying Malaysia’s electricity needs, even as the country commits to ambitious global climate goals under the Paris Agreement and the UN Sustainable Development Goals (“SDGs”). At present, Malaysia’s dependence on fossil fuels, primarily coal and natural gas, remains the backbone of its energy infrastructure. Yet these sources are also the primary contributors to national greenhouse gas emissions. Balancing economic growth with climate commitments has therefore revived the debate over nuclear energy, prompting policymakers, experts, and the public to reconsider its role in Malaysia’s transition to cleaner power.     Policy Context and Strategic Significance   Malaysia’s energy mix is heavily tilted toward fossil fuels, which account for more than 80% of total electricity generation.1 While this reliance has long underpinned industrial development, it now undermines Malaysia’s capacity to reduce carbon emissions. Renewable sources, such as hydropower, solar energy, and biomass, account for only a modest share of the national grid. Although solar power is expanding rapidly, its intermittent nature limits its ability to meet the continuous, large-scale energy demand.   Against this backdrop, nuclear power has re-emerged as a serious policy consideration. Malaysia’s participation in World Atomic Week 2025 in Moscow, with Malaysian representatives from the Ministry of Energy Transition and Water Transformation (“PETRA”) and the Atomic Energy Licensing Board (“AELB”) engaging with the International Atomic Energy Agency (“IAEA”) to explore cooperation, capacity building, and safety regulation.2   This renewed interest has since progressed beyond preliminary discussion and is now reflected in formal policy planning. Under Strategy A1.5 of the Thirteenth Malaysia Plan 2026–2030, nuclear energy has been identified as a potential source of clean electricity within the national energy mix, with implementation expected to begin operations by 2031.3 This strategy signals the government’s intention to explore nuclear power as a long-term option to support energy security, economic growth, and climate commitments.   To support this initiative, MyPOWER Corporation (“MyPOWER”), a special purpose agency under PETRA, has been designated as the Nuclear Energy Programme Implementing Organisation. In this capacity, MyPOWER will be responsible for the governance and coordination of Malaysia’s national nuclear programme in accordance with standards set by the International Atomic Energy Agency.4 This institutional framework reflects a structured and cautious approach, emphasising regulatory compliance, capacity building, and public engagement.     Regional and Global Context   Southeast Asia’s Growing Interest   Across Southeast Asia, nations are reassessing nuclear power as part of their clean energy transitions.   The Philippines has revived the Bataan Nuclear Power Plant project and has partnered with the United States and the IAEA to update the feasibility and safety assessments.5   Indonesia is exploring SMR deployment with international partners, aiming to operationalise its first reactor in the early 2030s.6   East Asia’s Established Leaders   In contrast, other countries such as Japan represent mature nuclear economies. Despite the Fukushima disaster, Japan has restarted several reactors after implementing rigorous safety reforms, reaffirming nuclear power as central to its decarbonisation and energy security strategy.7   Given this landscape, Malaysia’s entry into nuclear power would occur within a region rich in technological expertise and regulatory experience, offering valuable partnerships for training and system development.     The Case for Nuclear Integration   A Low-Carbon Energy Source   Proponents of nuclear power emphasise its unparalleled capacity to generate low-carbon electricity on a large scale. According to the World Nuclear Association (2024), the life-cycle carbon footprint of nuclear energy ranges between 12 and 15 grams of CO₂ per kilowatt-hour (“kWh”), accounting for emissions from planning, uranium mining, construction, operation, and decommissioning, rather than from the nuclear fission process itself.8   In comparison, gas-powered generation emits approximately 450 gCO₂/kWh, while coal-fired power produces around 1,050 gCO₂/kWh, making them roughly 30 and 70 times more carbon-intensive, respectively.   In Malaysia’s fossil-heavy energy landscape, incorporating nuclear power could substantially lower national carbon emissions while sustaining industrial growth. Experts note that countries with rising energy demands but limited renewable capacity, such as Malaysia, stand to gain significantly from the stable, continuous, and clean output that nuclear energy provides.9   Stable and Reliable Base-Load Power   Unlike solar and wind power, which fluctuate with weather conditions, nuclear reactors operate continuously, offering stable base-load power. This reliability is crucial for Malaysia’s energy-intensive industries, digital infrastructure, and expanding urban population. As the country’s electricity consumption surges, particularly with the rise of data centres and manufacturing, nuclear energy offers a consistent and round-the-clock power supply.10 This stability would enhance grid resilience and mitigate blackout risks during periods of low renewable output.   Long-Term Economic Competitiveness   Although the initial capital cost of nuclear infrastructure is substantial, its operational lifespan is typically 40 to 60 years, making it a cost-effective long-term investment. The IAEA estimates that once construction and safety measures are in place, nuclear-generated electricity is price-competitive with fossil fuels, particularly when factoring in long-term operational and maintenance costs. For Malaysia, this translates to stable energy prices, reduced exposure to volatile global fuel markets, and improved economic resilience. PETRA officials position that nuclear energy could act as a strategic hedge against global energy shocks, ensuring affordable and predictable electricity for future generations.11   Technological Advancements and Safety Improvements   Public scepticism toward nuclear power often stems from a legacy of past disasters like Chernobyl and Fukushima Daiichi accidents. However, modern nuclear technology has evolved significantly in the decades since. Generation III and IV reactors feature passive safety systems that automatically shut down during emergencies. Furthermore, the Small Modular Reactors (“SMRs”) offer flexible, scalable, and safer options that require less land and infrastructure. The IAEA has commended these innovations, describing next-generation systems as designed to minimise the risk of accidents while maximising efficiency. For Malaysia, adopting smaller, safer reactors tailored to its scale could represent a pragmatic and forward-looking approach to nuclear integration.12     Challenges for Malaysia   A balanced view requires acknowledging that nuclear energy is not without challenges. For Malaysia to proceed responsibly, several critical issues must be addressed.   Establishing a Strong Legal and Regulatory Framework   A robust and comprehensive legal and regulatory system is the cornerstone of any nuclear energy programme. In Malaysia, this responsibility primarily lies with the AELB, which oversees the safe use of nuclear technology for medical, industrial, and research purposes. However, transitioning from these limited applications to full-scale power generation demands significant regulatory strengthening.   From a legal standpoint, adopting nuclear energy requires Malaysia to restructure and modernise its statutory environment. This includes clear and comprehensive legislation governing reactor licensing, radiation protection, nuclear safety and security, radioactive waste and spent fuel management, emergency preparedness, and long-term liability for nuclear damage. Such a framework must be capable of regulating the entire nuclear lifecycle, from construction and operation to decommissioning, while ensuring public safety and environmental protection at every stage.   Encouragingly, Malaysia has already taken concrete steps in this direction. The Atomic Energy Licensing (Amendment) Act 2025 introduced significant enhancements to the existing regulatory regime, most notably by introducing a mandatory permit system for the import, export, transhipment, and transit of radioactive and nuclear materials. Specifically, under the newly inserted Section 12A of the Atomic Energy Licensing Act 1984, it is stated that:   “Permit   12A. (1) Without prejudice to the requirements of any other law, no person shall –   (a)  import radioactive material, nuclear material, nuclear related item or nuclear related technology; or (b)  export, tranship or bring in transit radioactive material or nuclear material,   unless he is the holder of a valid permit issued under subsection 16A(2) by the Director General for such purpose as specified in the permit.”   This amendment broadens regulatory oversight beyond domestic activities and strengthens state control over nuclear-related materials, reflecting Malaysia’s alignment with international nuclear safety and security norms.   While these amendments reflect growing regulatory readiness, further reforms will be necessary if Malaysia proceeds with nuclear power generation, including alignment with international instruments such as the Convention on Nuclear Safety and IAEA safety standards.   Enhancing Public Education and Transparency   Public understanding and acceptance are essential for the success of a nuclear energy initiative. Many Malaysians continue to associate nuclear power with radiation risks due to past accidents.   Addressing this concern is both a legal and technical imperative. Public transparency, accountability, and access to information are central principles of administrative law and good governance. The government must therefore conduct open consultations, publish the findings of feasibility studies, and ensure that nuclear decision-making follows fair and transparent procedures. A legally sound process enhances legitimacy, builds public trust, and reduces the risk of future litigation or political resistance.   Investing in Infrastructure and Skilled Workforce Development   The establishment of nuclear power plants requires substantial infrastructure and a highly skilled workforce. This extends beyond engineers and scientists. Malaysia will also require legal specialists trained in nuclear law, environmental law, international compliance, energy regulation, and contract negotiation. Lawyers will play a vital role in drafting legislation, reviewing regulatory requirements, structuring public-private partnerships, managing cross-border agreements, and advising on liability regimes. A strong domestic legal talent pool is therefore essential to a safe and sustainable nuclear energy programme.     Why Law Matters in Malaysia’s Nuclear Future   As Malaysia considers integrating nuclear energy into its national electricity mix, the legal profession will play a central role in shaping this transition. Lawyers will be involved in drafting comprehensive nuclear legislation, negotiating international cooperation, advising on environmental and safety compliance, and ensuring that regulatory processes meet global best practices. The future of nuclear energy in Malaysia ultimately depends on a transparent, robust, and well-enforced legal framework that reflects the fundamental connection between energy policy, governance, and the rule of law.     Conclusion   The debate over nuclear energy in Malaysia reflects a broader global challenge of meeting rising energy demand while reducing carbon emissions. While nuclear power offers stable, low-carbon and cost-competitive energy, it also demands strong governance, rigorous safety standards, and public trust. For Malaysia, any move towards nuclear energy must be gradual, transparent, and grounded in legal, environmental, and technical responsibility. With appropriate policies, stakeholder engagement, and legal safeguards, nuclear power could support Malaysia’s transition towards a sustainable, secure, and low-carbon energy future.     Ministry of Natural Resources, Environment & Climate Change, Malaysia Energy Transition Outlook (IRENA, 2023) <https://www.law.ox.ac.uk/sites/default/files/migrated/oscola_4th_edn_hart_2012quickreferenceguide.pdf> accessed 22 November 2025. The Sun, ‘Nuclear Power – the road to net zero?’ The Sun BIZ & FINANCE (Petaling Jaya, 25 October 2025), 13 <https://thesun-ipaper.cld.bz/publication/20251025/12/#zoom=true> accessed 22 November 2025. Ministry of Economy, Thirteenth Malaysia Plan 2026–2030 (2025) <https://www.investmalaysia.gov.my/media/m3eamxey/thirteenth-malaysia-plan-2026-2030.pdf> accessed 1 January 2026. Adoracion M. Navarro, ‘Nuclear Power in the Philippines: The Need to Address Institutional Gaps’ (Fulcrum, 14 May 2025) <https://fulcrum.sg/nuclear-power-in-the-philippines-the-need-to-address-institutional-gaps/> accessed 3 January 2026. Nuclear Business Platform, ‘Indonesia Developing Indigenous SMR Technology’ (Nuclear Business Platform, June 2021) <https://www.nuclearbusiness-platform.com/media/insights/indonesia-developing-indigenous-smr-technology> accessed 30 December 2025. Koh Ewe, ‘Japan restarts world’s largest nuclear plant as Fukushima memories loom large’ (BBC, 22 January 2026) <https://www.bbc.com/news/articles/cq6v0v32rg1o> accessed 27 January 2026. World Nuclear Association, ‘Carbon Dioxide Emissions from Electricity’, (World Nuclear Association, 3 September 2024) <https://world-nuclear.org/information-library/energy-and-the-environment/carbon-dioxide-emissions-from-electricity> accessed 28 December 2025. Dhana Raj Markandu, ‘Cover Story: Should Malaysia give nuclear power the green light’ (Institute of Strategic & International Studies (ISIS) Malaysia, 21 February 2025) <https://www.isis.org.my/2025/02/21/cover-story-should-malaysia-give-nuclear-power-the-green-light/> accessed 3 January 2025. World Nuclear News, ‘Malaysia launches nuclear energy feasibility study’ (World Nuclear News, 19 August 2025) <https://www.world-nuclear-news.org/articles/malaysia-launches-nuclear-energy-feasibility-study> accessed 27 November 2025. International Atomic Energy Agency, ‘IAEA Mission Observes Commitment to Safety at Research Reactor in Malaysia, Recommends Further Improvement’ (International Atomic Energy Agency, 20 June 2025) <https://www.iaea.org/newscenter/pressreleases/iaea-mission-observes-commitment-to-safety-at-research-reactor-in-malaysia-recommends-further-improvement> accessed 4 January 2026.     Written by: Norhisham Abd Bahrin (Partner) [email protected] Muhammad Amsyar Akif Amran (Trainee Solicitor) [email protected]     Corporate Communications Azmi & Associates 6 May 2026

In recent years, the issue of sanctions has become highly relevant in shipping and international trade due to geopolitical developments. This article will focus on sanctions implemented by the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury, and the manner in which Malaysian courts engage with U.S. sanctions law. Ship-to-Ship (“STS”) Transfers for Sanctioned Cargoes Owing to its geographical position, sheltered offshore waters, and proximity to major international shipping lanes, Sungai Linggi — located along the west coast of Peninsular Malaysia north of Port Klang within the Strait of Malacca — has developed into a significant maritime operating zone for offshore marine activities.1 In particular, Sungai Linggi has seen an increase in STS operations involving liquid bulk cargoes such as fuel oil and petroleum blends over the past few years.2 One reason for the increased popularity of STS operations is that they can be conducted offshore without the need for berthing at a jetty, which in turn allows parties to obscure the provenance of cargoes during such operations.3 The problem, however, arises when some of these cargoes, reportedly of Iranian, Russian, or Venezuelan origin often loaded onto vessels bound primarily for China,4 are used to evade sanctions.5   In the Malaysian High Court case of Orin Energy v Futura,6 the learned YA Ong Chee Kwan (as he then was) considered whether cargo that was arguably subject to U.S. secondary sanctions could be treated as such under Malaysian law even though neither transacting parties was on the OFAC’s ‘Specially Designated Nationals’ (“SDN”) list. From the perspective of U.S. sanctions law, it was argued that if the ‘blocked property’ becomes ‘unblocked’ merely by virtue of being transacted to non-U.S. persons, this could create a perceived ‘loophole’ whereby the cargo is effectively ‘laundered’ of its U.S.-sanctioned status.     Background Facts of Orin Energy v Futura   To understand His Lordship’s judgment and to provide the necessary context, the brief facts of the case are as follows:   Orin Energy Investments Ltd (“Orin Energy”), a Labuan incorporated company, entered into a sales contract with Futura Asia Ltd (“Futura”), a Hong Kong incorporated company, for the purchase of approximately 700,000 barrels of fuel oil (“Sales Contract”);   The fuel oil originated from Venezuela, and was supplied by PDVSA Petroleo SA (“PdVSA”), a Venezuelan state-owned oil company;   It was agreed that the delivery of the fuel oil was to be effected via a STS transfer from the tanker MT Eser K to a vessel chartered by Orin Energy, MT Nordic Sirius (a vessel owned by NAT Bermuda Holdings, a subsidiary of Nordic American Tankers Ltd, a U.S. entity) (“MT Nordic Sirius”), at Sungai Linggi, Malaysia;   The STS operation commenced in September 2020, but the Master of the receiving vessel, MT Nordic Sirius, refused to complete the transfer after learning of the fuel oil’s Venezuelan origin, raising claims related to U.S. sanctions risk; and   As a result, Orin Energy alleged, among other allegations, that Futura had breached the Sales Contract by supplying fuel oil of Venezuelan origin, which Orin Energy claimed to be ‘blocked property’. Futura, however, countered that neither it nor Orin Energy were U.S. persons nor designated on the SDN list, and as such, the fuel oil is not ‘blocked property’.     Judicial Interpretation of Foreign Law In reaching his conclusion, His Lordship made the following findings:   First, for non-U.S. persons to be caught under the relevant Executive Orders issued by the White House,7 there must first be a determination by the U.S. Secretary of the Treasury, in consultation with the Secretary of State, that the non-U.S. person falls within the scope of the sanctions regime, i.e., designated under the SDN list. Once such a determination is made, all property and interests in property of that SDN are treated as ‘blocked’ when they come within the possession or control of a U.S. person. It was undisputed that PdVSA is listed as a SDN. However, its property would constitute ‘blocked property’ only when it comes within the possession or control of a U.S. person. Since neither Orin Energy nor Futura are U.S. persons, therefore, any transactions of the fuel oil are also not ‘blocked’;   Second, both Orin Energy and Futura were not, at all material times, determined by the U.S. Secretary of the Treasure, in consultation with the Secretary of State, as SDNs. In addition, His Lordship also held that a single commercial purchase of fuel oil from PdVSA by Futura in itself does not contravene the Executive Orders as it does not amount to having ‘materially assisted, sponsored, or provided financial, material or technological support’ to the Government of Venezuela and it does not suffice to characterise the buyer as operating in the oil sector of Venezuela; and   Third, His Lordship emphasised that to treat the fuel oil as ‘blocked property’ solely by reason of its Venezuelan origin would effectively amount to OFAC imposing a total embargo or blanket prohibition on all products originating from Venezuela, thereby preventing all persons worldwide from dealing in such products. Such an outcome, His Lordship observed, would constitute an ‘impermissible exercise by a country of extraterritorial coercive powers’, which would in any event be practically unenforceable.   These findings illustrate that His Lordship did not decline to engage with U.S. sanctions law, but rather exercised the Court’s judicial responsibility to determine the content and scope of foreign law as a matter of fact. In doing so, His Lordship preserved the distinction between recognising foreign sanctions as part of the factual matrix of a dispute and enforcing them as binding rules of law within the Malaysian legal system.     Conclusion: Not a ‘Loophole’ in the context of Malaysian Law Malaysia is not a unilateral sanctions-imposing state. As such, U.S. sanctions do not have direct legal force in Malaysia.8 Importantly, the learned YA Ong Chee Kwan (as he then was) observed that a unilateral enforcement to U.S. sanctions would effectively transform them into a worldwide embargo, extending their reach beyond U.S. jurisdiction and into states that have not enacted corresponding sanctions regimes. His Lordship did not, however, decline to consider U.S. sanctions altogether. Rather, His Lordship undertook a substantive examination of the applicable OFAC regime as a matter of foreign law and determined that the fuel oil did not constitute ‘blocked property’. This judicial approach accords with Malaysia’s position as a sovereign jurisdiction that does not give automatic domestic effect to unilateral sanctions regimes. What may appear, from a U.S. sanctions perspective, to be a regulatory ‘loophole’ is more accurately understood under Malaysian law as an expression of sovereignty.     Shipnext, ‘Port of Sungai Linggi’ (Shipnext) <https://shipnext.com/port/603747a660e63cd6c47ebb34> accessed 5 February 2026. Marcus Hand, ‘Dark fleet ship-to-ship transfers off Malaysia more than double’ Seatrade Maritime News (27 January 2026). Anish, ‘What Is Ship-to-Ship Transfer (STS) and Requirements to Carry Out the Same’ (Marine Insight, 6 May 2021) <https://www.marineinsight.com/maritime-law/what-is-ship-to-ship-transfer-sts-and-requirements-to-carry-out-the-same/> accessed 5 February 2026; and Reuters, ‘Malaysia seizes $1.299 million crude oil tankers suspected of illegally transferring’ Reuters (Singapore, 1 February 2026). Marcus Hand, ‘Dark fleet ship-to-ship transfers off Malaysia more than double’ Seatrade Maritime News (27 January 2026). Office of Foreign Assets Control, ‘Sanctions Advisory for the Maritime Petroleum Shipping Community’ (US Department of the Treasury, 2020) <https://ofac.treasury.gov/media/933556/download?inline> accessed 5 February 2026. Orin Energy Investments Ltd v Futura Asia Ltd [2024] MLJU 2347 (unreported). Executive Order 13850 of November 1, 2018, Blocking Property of Additional Persons Contributing to the Situation in Venezuela, Federal Register, Vol. 83, No. 213, 55243 (2 November 2018); and Executive Order No. 13884 of August 5, 2019, Blocking Property of the Government of Venezuela, Federal Register, Vol. 84, No. 152, 38843 (7 August 2019). Bernama, “Malaysia does not recognise unilateral sanctions, remains non‑aligned to any sides” New Straits Times (Putrajaya, 8 May 2022).     Written by: Philip Teoh (Partner) [email protected] Evelyn Ng Can Fei (Senior Associate) [email protected]     Corporate Communications Azmi & Associates 13 May 2026

Introduction The evolution of international trade and governance can be traced through the development of the former provisional agreement, the General Agreement on Tariffs and Trade (“GATT”). It has then transformed into the current World Trade Organisation (“WTO”). Emerging from discussions at the 1944 Bretton Woods Conference, the idea of a global trade body had first taken shape as the proposed International Trade Organization (“ITO”). As support for ITO waned from the U.S Congress, GATT was subsequently established in 1947 as a temporary framework among 23 nations. After decades of negotiations and reforms, the Uruguay Round (1986–1994) led to the creation of the WTO in 1995, which now governs nearly all global trade and provides a more structured and authoritative system. By 2003, the WTO had expanded to 146 members— representing nearly 97 percent of global trade.1 Malaysia, being a member of the WTO since 1 January 1995 and a signatory to the GATT 1947 shortly after its independence since 24 October 1957,2 is committed to promoting fair and transparent trading practices and has further entered into an Agreement on Implementation of Article VI of GATT (“Implementation Agreement of Article VI of GATT”). Malaysia is thus, guided by the Implementation Agreement of Article VI of GATT with regard to the conditions, scope, and procedures for imposing trade remedies. Trade remedies would include antidumping duties, countervailing duties, and safeguard measures. All of which are designed to protect domestic industries from unfair or injurious foreign competition while adhering to international trade rules.3 Anti-Dumping   Under the WTO Anti-Dumping Agreement, which was formerly known as the Implementation Agreement of Article VI of GATT, a framework is provided for member countries to address issues of dumping. Dumping occurs when goods are exported at prices below their normal value in the home market and this practice subsequently causes material injury to domestic industries in the importing country. Following the provisions of the Agreement, WTO member countries that are affected by dumping will be able to take retaliatory actions in the form of imposing a balanced anti-dumping obligation. However, an antidumping duty can be imposed by an importing country only when there is evidence that foreign firms have sold their products below normal value and that this practice has caused harm to the domestic industry.4 Consequently, when dumping has taken place and the importing industry is affected, an increase in price to a certain level may be undertaken by the exporting company to avoid an anti-dumping import duty.5   Building on these global rules, Malaysia has established its Countervailing and Anti-Dumping Administration to investigate and take remedial measures against unfair trade practices by foreign manufacturers or exporters.6 In doing so, Malaysia follows the principles recognised by the WTO and GATT, which condemn the dumping of goods into another country at prices below their normal value when such practices cause or threaten material injury to the established domestic industries.   The Ministry of International Trade and Industry (“MITI”) considers a product to be dumped if it is sold at a price below its normal value. A product is deemed to be sold below normal value if its price is:7   Less than the comparable price of the like product in the course of trade for consumption in the exporting country; or,   In the absence of such a domestic price, less than either: -   (i) The highest comparable price of the like product for the export country in the ordinary course of trade, or (ii) The costs of production of the product in the country of origin, plus reasonable allowances for selling costs and profits.   Between January 2017 and June 2022, Malaysia initiated 25 anti-dumping cases according to the most recent WTO notification.8 As of 30 June 2022, Malaysia has 25 anti-dumping measures in force with iron and steel being the primary products that are affected.   The practical application of Malaysia’s anti-dumping laws was recently illustrated in the Federal Court case of Menteri Kewangan & Ors v Diler Demir Celik Endustru Ve Ticaret AS9 (also known as Diler Iron and Steel Co Inc). The case had arisen from investigations into the import of Turkish steel sold in the Malaysian market, relating to Diler Iron & Steel Turkey Steel Imports. The Court had held that Sections 17 and 18 of the Countervailing and Anti-Dumping Duties Act 1993 must be read together to uphold the Parliament’s intent—to ensure a fair comparison between export price and normal value, which is generally determined at the ex-factory level within reasonable limits.     Subsidies and Countervailing Measures   The Agreement on Subsidies and Countervailing Measures (“SCM Agreement”) governs both the granting of subsidies and the countervailing measures. Both measures are what countries may apply to offset their adverse effects. According to Article 1.1 of the SCM Agreement, subsidies exist when there is a financial contribution by a government or any public body within the territory of a Member State that confers a benefit.10 On this, Article VI of the GATT 1994 and the SCM Agreement define countervailing duties as a special duty that is levied to offset any subsidy bestowed either directly or indirectly, upon either the manufacture, production, or export of any merchandise.11   Despite these provisions, Malaysia has rarely applied countervailing duties. To date, Malaysia has not initiated any countervailing investigations reported to the WTO. This trend is similar in other Regional Comprehensive Economic Partnership members such as Singapore, Thailand, and the Republic of Korea.12 Countervailing duties may be used sparingly because in most competitive markets, foreign subsidies benefit consumers. They are only justified in imperfectly competitive markets, where domestic producers incur losses that outweigh consumer benefits. Consequently, countries apply countervailing duties selectively, targeting cases of clear harm to domestic industries.13     Safeguard Measures   A safeguard measure refers to a temporary tariff or quota that is imposed to protect a domestic industry from serious injury caused by a sudden surge of imports resulting from fair foreign competition.14 Unlike anti-dumping or countervailing duties, which are designed to address unfair trade practices such as dumping or subsidisation, safeguard measures may be applied even when foreign exporters compete fairly.15 Their purpose is to provide domestic industries with temporary relief and time to adjust to the impact of increased imports.16   Safeguard measures are governed by the Safeguards Act 2006 and the Safeguard Regulations 2007, which regulate their investigation, imposition, and revocation, with MITI overseeing such matters.17   Safeguard measures derive their legal authority from Article XIX of GATT. Initially, these measures were seldom used, as some governments preferred implementing “grey area” measures as an alternative.18 Nevertheless, these measures were subsequently superseded by the WTO Safeguard Agreement, which subjects any safeguarding actions to a time limit (also known as sunset clauses).19     Conclusion   Coming full circle, Malaysia’s application of the WTO framework in its own laws demonstrates its commitment to upholding fair and transparent trade practices while safeguarding the interests of domestic industries. As aforementioned, though active steps have been taken in addressing dumping activities by way of anti-dumping laws, other trade remedies, such as countervailing measures have yet to be invoked. This leaves room for further development in Malaysia’s trade remedy practice. Given that the global trade dynamics will inevitably shift along with emerging challenges, Malaysia is likely to see a growing body of cases that test and refine the practical application of its trade laws and the remedies provided in ensuring fair trade practices.     Crowley, Meredith A. ‘An introduction to the WTO and GATT.’ Economic Perspectives 27, no. 4 (2003), 43. World Trade Organization, ‘Malaysia and the WTO’ <https://www.wto.org/english/thewto_e/countries_e/malaysia_e.htm> accessed 27 November 2025. Ministry of International Trade and Industry, ‘Trade Remedies’ <https://www.miti.gov.my/index.php/pages/view/1672?mid=1029> accessed 27 November 2025. Crowley, Meredith A (n 1) 52. World Trade Organization, ‘Briefing note: Anti-dumping, subsidies and safeguards’ https://www.wto.org/english/thewto_e/minist_e/mc9_e/brief_adp_e.htm accessed 27 November 2025. Royal Malaysian Customs Department, ‘Malaysia National Trade Repository (MNTR)’, http://mytraderepository.customs.gov.my/en/ntm/ctp/an_dump/Pages/an_dump.aspx accessed 27 November 2025. Ibid. World Trade Organization, ‘Trade Policy Review’ (WTO, 16 June 2023) WT/TPR/S/436/Rev.1 < https://web.wtocenter.org.tw/file/PageFile/386100/WTTPRS436R1.pdf> accessed 27 November 2025. [2025] MLJU 3103. Cen, Jia Zhen, ‘Disciplining the responses to cross-border subsidies: the case study of EU and US trade remedy investigations against products from Indonesia and Thailand’ (2024) < https://digital.car.chula.ac.th/cgi/viewcontent.cgi?article=13344&context=chulaetd> accessed 27 November 2025. World Trade Organization, ‘Subsidies and Countervailing Measures” (WTO) <https://www.wto.org/english/tratop_e/scm_e/scm_e.htm> accessed 27 November 2025. Koesnaidi, Joseph Wira, and Yu Yessi Lesmana, ‘Trade Remedies Chapter’ (2022) (Jakarta: Economic Research Institute for ASEAN and East Asia) < https://www.eria.org/uploads/media/discussion-papers/FY22/Trade-Remedies-Chapter.pdf> accessed 13 November 2025. Crowley, Meredith A (n 1) 42-57. World Trade Organization (n 12). Crowley, Meredith A (n 1) 42-57. World Trade Organization, ‘Safeguard Measures’ (WTO) <https://www.wto.org/english/tratop_e/safeg_e/safeg_e.htm> accessed 27 November 2025. World Trade Organization (n 8). H. H. Weiler, Sungjoon Cho, Isabel Feichtner, and Julian Arato, International and Regional Trade Law: The Law of the World Trade Organization, Unit XV: Safeguard Measures (New York: NYU School of Law, 2016). Ibid.     Written by: Philip Teoh (Partner) [email protected] Nik Aisha Tasnim Nik Syahril (Trainee Solicitor) [email protected]     Corporate Communications Azmi & Associates 26 January 2026