Strong message against WMD trade

  • Nation
  • Sunday, 12 Dec 2010

The Strategic Trade Act 2010 specifically restricts trade in WMD and materials that might be used in the making of WMD.

MALAYSIA was drawn into the WikiLeaks saga when the website released a secret US diplomatic cable alleging that two Malaysian companies tried to buy missile guidance systems from a Chinese firm on behalf of Iran.

The charge was denied by Home Minister Datuk Seri Hishammuddin Tun Hussein last week. Hishammuddin said the Government had been monitoring the two companies since 2008 and that they were not a threat to national security nor involved in any terrorism-related activities.

WikiLeak’s disclosure is only part of a much larger story. The United States has been accusing Iran of using Malaysian middlemen to circumvent trade restrictions to obtain military equipment and technology from America, China and other countries in recent years.

To prevent the country from being perceived as a centre for trade in weapons of mass destruction (WMD), Malaysia’s Parliament passed the Strategic Trade Act 2010 (STA) in April.

The STA places an absolute ban on trade in WMD including biological weapons, biological agents, chemical weapons, toxins and nuclear weapons, according to corporate law firm Azmi & Associates.

“The Act also restricts the provision of any technical assistance and prohibits the design, development and production of WMD and their delivery systems,” says its legal executive Daniel Saville.

The law has a delicate task of balancing the need to control WMD proliferation and ensuring genuine exporters are not burdened with onerous red tape.

“Objects which potentially have applications as components in the production of WMD, including products and materials commonly used in civilian applications such as electronics, computers and avionics, are likely to be classified as ‘strategic items’,” says Anthony Tan, an associate of Azmi & Associates.

“It is important to remember that there are many millions of shipments of restricted goods which leave Malaysia every year while only a very tiny fraction is ever used in the construction of WMD,” adds Saville.

A new Strategic Trade Controller office will be created and businesses and brokers will be required to obtain a permit before they can export goods and technologies.

Several days after the WikiLeaks disclosure, the United States placed sanctions on 10 businesses linked to Iran’s state-owned Bank Mellat, the Islamic Republic of Iran Shipping Lines and five individuals.

One of the firms, Pearl Energy Company, has a business address registered in Labuan. The International Trade and Industry Ministry (Miti) says it is looking into Pearl Energy’s case.

“We are verifying the information and then we will engage with all the necessary parties,” says a senior Miti official, who declined to be named.

Until the STA comes into effect in July 2011, there is no Malaysian legislation which specifically restricts trade in WMD and materials that might be used in the construction of WMD.

“However, despite the lack of Malaysian controls over the trade in WMD materials presently, such trade worldwide remains difficult. Countries such as the US offer controls which act to restrict trade,” says Saville.

The STA is a powerful piece of legislation, imposing heavy punishment for breaches, including fines of up to RM30mil for companies. Individuals charged under the Act face capital punishment and life imprisonment.

Malaysia will compile a list of prohibited and restricted end-users made up of known individuals and companies involved in the trade of WMD. “The Act will prohibit the trade of strategic items to parties on the prohibited end-user list,” says Saville

Authorised officers will be given power to conduct arrests without a warrant, search and seizure without a warrant, interception of communications and access to computerised data, according to Azmi & Associates.

While the heavy penalties will reduce and deter illegal transhipments of WMDs, it is not 100% fool-proof. “For example, it is entirely possible, after the implementation of the STA, that household electronics will be made in Malaysia, and exported abroad, where they may be adapted such as to become components in WMD,” says Tan.

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