What is the penalty for Malaysian firms using forced labour components?

Question

Accepted Answer

No Specific Penalties for Malaysian Firms Using Forced Labour Components Detailed

Malaysian firms using components produced by forced labour are not explicitly subject to specific penalties under the Malaysia-US Agreement on Reciprocal Trade (ART) as it currently stands. The agreement primarily focuses on Malaysia’s commitment to implement measures prohibiting the import of such goods within two years of the ART entering into force. The broader implication for the country, as indicated by the US imposing a 10 per cent tariff on Malaysian imports, stems from a lack of existing legislation and mechanisms to prevent the entry and use of forced labour-produced materials.
Timeline for Implementing Import Restrictions

Malaysia has been granted a two-year period to establish legislative measures that will prohibit the import of goods manufactured using forced labour. This timeframe commences once the Malaysia-US Agreement on Reciprocal Trade (ART) officially enters into force. The entry into force is contingent upon both Malaysia and the United States completing their respective domestic legal procedures and exchanging formal written notifications confirming this completion, a process expected to occur 60 days after ratification.
Existing Legal Framework and Gaps

While Malaysia possesses laws that address the employment of undocumented foreign workers, it currently lacks a dedicated legal framework or mechanism specifically designed to prevent the importation of goods produced through forced labour from other countries. Furthermore, there is no explicit provision outlined to stop these overseas-sourced materials or components from being incorporated into products manufactured within Malaysia.
US Tariff Imposed on Malaysian Imports

The United States has imposed a 10 per cent tariff on imports from Malaysia. This measure was a consequence of an investigation by the US into countries that were not enforcing restrictions on goods produced with forced labour. Malaysia secured a preferential tariff rate of 10 per cent, lower than the 12.5 per cent applied to some other economies, by committing to implement the necessary import restrictions under the ART.

Reading history

Hide →

This history is cleared when the page is closed.

What is the penalty for Malaysian firms using forced labour components?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

1

0

0

Share with friends