STA – restriction or facilitation?

Putik Lada
By KONG SI YING

The Dewan Rakyat passed the Strategic Trade Bill on April 5, committing the country to the monumental and painful task of ensuring the non-proliferation of weapons of mass destruction.

POST-9/11, the term “weapons of mass destruction” (WMD) was frequently bandied about. To many civilians who were fortunately not affected by certain world events, it was easy to feel disconnected from the fear and the hype.

Thus when the Strategic Trade Act 2010 (STA) was introduced, many could be forgiven for dismissing its relevance to their everyday lives. Its stated purpose, after all, was the non-proliferation of WMD.

Also known as export control, it involves a centralised system monitoring the movement of items, technology and knowhow that could potentially be used to make, store or deploy WMD.

The STA’s effects are extremely far-reaching. Certain semiconductors, metals, chemicals and many more that are used regularly in industry for civilian applications are unfortunately also raw materials for weapons and their delivery systems.

Such items are known as “dual-use items” for their military and civilian applications.

Export control is a monumental and painful task, for both the regulator and the regulated. Permits or registration to export, transship, bring in transit, broker and transmit strategic items and technologies will be required upon the STA coming into force. Transmissions merely routed through Malaysia will also be caught.

Malaysia is seeking to move up the value chain and increase high-value trade, so why are we, a terrorism-free nation, bending over backwards and diverting resources for this anti-terrorism regime that hinders trade?

Let us first take a step back.

In the 80s BBC television series Yes Minister, the lovable minister, James Hacker MP, learns that British weapons are being sold to Italian terrorists, and exclaims to his Permanent Secretary who refuses to interfere, “Humphrey, I can’t believe it. We’re talking about good and evil!” Sir Humphrey Appleby replies, “Ah, Church of England problem.”

In reality, many industrialised nations had already actively approached this question of “good and evil”, except that export control was perhaps born from the ideological tensions post-World War II, rather than absolute notions of good and evil.

As ideological tensions eased, the industrialised world remained vigilant, through the Australia Group, the Nuclear Suppliers Group, the Wassenaar Arrangement, etc.

However, none of these established universal mandatory obligations, until in 2004 the UN Security Council unanimously adopted UNSCR 1540, imposing obligations on all member states, including Malaysia, to effect legal and regulatory measures for the non-proliferation of WMD.

But do all countries who commit themselves do so as a matter of good and evil? If not, why are we doing it?

On April 5, 2010, when the Dewan Rakyat passed the Strategic Trade Bill, Minister in the Prime Minister’s Department Datuk Seri Mohamed Nazri Aziz clarifyed that the Bill was not introduced in haste, but had been five years in the making since 2005.

He was correct. The Bill had been in the pipeline in the Attorney General’s Chambers since UNSCR 1540 was adopted.

But the timing of the Bill’s quick passage through the Dewan Rakyat also coincided with our Prime Minister’s upcoming attendance at the Nuclear Security Summit in Washington. The Obama administration had further extended a coveted bilateral meeting invitation. The view that the Bill was a political olive branch inevitably arose.

In preparation for the implementation of the STA, when the private sector was engaged, substantial concerns brewed over the practicality of these stringent controls over such a wide range of goods, technologies and transmissions.

Moreover, affected businesses, such as semiconductor companies, constitute a massive portion of Malaysian manufacturing. Logistics providers were also anxious of their potential responsibility when handling customers’ goods.

The line to be drawn between what was acceptable or otherwise was being desperately sought, largely due to the STA’s unprecedented statutory penalties. The smallest fine for not complying with the STA’s permit obligations is RM5mil and the shortest imprisonment term is five years.

Despite the STA’s seemingly restrictive stance, one must look beyond the picture. The STA is intended to protect Malaysia and Malaysian exporters from being exploited by proliferators.

There is no intention of compromising legitimate trade. On the contrary, unless Malaysia demonstrated its seriousness about non-proliferation, its trade would suffer.

Malaysian businesses would continue to be black-listed by major trading partners, desirable free trade agreements with parties such as the EU would be unattainable, and we would be denied precious technologies such as nuclear energy.

After all, why would a country offer us anything if it would just be smuggled out our back door, probably to kill its own citizens?

The Government recognises that export control is a challenging undertaking and has actively sought to educate and consult the private sector while it carves out the regulations under the STA.

When the STA comes into force, it will be administered by the Strategic Trade Controller and his Secretariat in the Ministry of International Trade and Industry.

Malaysia has received generous assistance from other jurisdictions and is learning from them. Make no mistake, implementation will be difficult. When Singapore introduced its own export control in 2003, it took years to settle down.

Although terrorism has thankfully yet to reach our beautiful shores, Malaysia can no longer be a mere onlooker. We have been inadvertently involved, and so must get involved. Our reputation cannot be held hostage by those who would seek to profit from bloodshed and violence.

To conclude, whatever the timing, Malaysia inevitably had to step up and play its part in the non-proliferation of WMD. The reasons – moral, economic or political – are ultimately for the better.

The world has grown more complex than James Hacker’s simple view of good and evil, but we cannot be the Sir Humphrey Appleby’s of the world either.

> The writer is a member of the National Young Lawyers Committee of the Bar Council. Putik Lada, or pepper buds in Malay, captures the spirit and intention of this column – a platform for young lawyers to articulate their views and aspirations about the law, justice and a civil society. For more information about the young lawyers, please visit www.malaysianbar.org.my