Timber and timber products can be classified as traded commodities, this is why the Malaysia timber export or import requirements are highly regulated by local state authority. In Malaysia, The three state forestry Malaysia Timber Industry Board (MTIB), Sabah Forestry Department (SFD), and Forestry Department Sarawak (FDS) are key gatekeepers from which traders and manufacturers have to seek guidance from.
The state authorities have a comprehensive guide to assist traders and manufacturers in Malaysia, what is written below is an overall summation of the resources gathered from the MTIB, FDS, and SFD.
We like to disclaim that the written guide below does not serve as absolute advice, rather as a pointer towards how a would-be trader, harvester, or manufacturer should apply for the timber import and export license in Malaysia. Of course, planning for your shipment has to begin with consulting the relevant state authorities first.
Table of Contents
Relevant Governmental Agencies, Ministries, Councils, Departments and Trade Association
|Ministry of Primary Industry and Commodities (MPIC)
|Ministry of Water, Land and Natural Resources (KATS)
|Ministry of International Trade and Industry (MITI)
|Ministry of Urban Development and Natural Resources (MUDeNR), Sarawak
|Department, Agencies and Councils
|Forestry Department Peninsular Malaysia (FDPM)
|Sabah Forestry Department (SFD)
|Forestry Department Sarawak (FDS)
|Malaysia Investment Development Authority (MIDA)
|Malaysia Timber Industry Board (MTIB)
|Sarawak Timber Industry Development Corporation (STIDC)
|Malaysia Timber Council (MTC)
|Malaysia Timber Certification Council (MTCC)
|Sarawak Forestry Corporation (SFC)
|Harwood Timber Sdn Bhd
|Timber Exporters Association Malaysia (TEAM)
|Malaysian Wood Industries Association (MWIA)
|Persatuan Pengusaha-Pengusaha Kayu Kayan dan Perabot Bumiputera Malaysia (PEKA)
|Malaysian Panel Product Manufacturers’ Association (MPMA)
|Malaysian Wood Mouldings & Joinery Council (MWMJC)
|Malaysian Furniture Council (MFC)
|Malaysia Pulp and Paper Manufacturing Association (MPPMA)
|Sarawak Timber Association (STA)
|Sabah Timber Industries Association (STIA)
|Timber Association of Sabah (TAS)
MTIB is the licensing authority for the export and import of all timber products that originate from Peninsular Malaysia.
The Sabah Forestry Department has a much wider scope. The SFD can license the import and export of all timber products from Sabah, it also is responsible for the forest management, control of harvesting operations as well as royalty collection.
The Sarawak Timber Industries Development Corporation (STIDC) is responsible for licensing the trade of timber and timber products to and from Sarawak.
Regulated Timber and Timber Products for Export and Import
Based on the Harmonised Tariff Code (HTC), the Chapters that requires the approval from relevant licensing authorities are: –
|Woods and Articles of Wood
|Pulp of Wood or From Other Fibrous Cellulosic Material
|Paper and paperboard; articles of paper pulp, of paper or paperboard
|Furniture & prefabricated buildings
In Peninsular Malaysia, Any export of timber and timber products listed in the table below incurs an export cess, collected by MTIB.
|Logs (including baulks and roughly squared) – Subject to provisions by the MTIB
|Railways or tramway sleepers
|Plywood, veneered panel and similar laminated wood, blockboard
CESS payment will vary depending on the products that are exported. The penalty for not paying CESS is the amount not exceeding tenfold of the initial CESS due and/or a jail term not exceeding 3 years.
The CESS rate due is based on the cubic meters exported, not the net weight.
For example: –
|Sawn Timber (all sizes of Rubberwood) – Chapter Heading 4407
|RM 125.00 per cubic meter or part thereof, either Kiln Dried* (KD) or Air Dried** (AD)
|87 cubic meters
|Cargo Net Weight
|RM 125.00 x 87m3 = RM 10,875.00
*Kiln Dried – Woods that are dried over an controlled environment, often with the use of an oven/kiln
*Air Dried – Woods that are dried by exposing the wood to open air over an extended period of time.
Based on the example above, an exporter is responsible to pay RM 10,875.00 to the RMCD department before exporting the cargo.
For shipments from Peninsula Malaysia, all exporters that require an export license are obligated to apply for an online register with MTIB (MCS Registration).
Once timber exporters have registered with MTIB, they are required to open a CESS deposit account. Exporters have to pay all CESS due via this online MCS, as well as applying for the required export licenses.
Peninsular Malaysia Timber and Timber Products Export Procedures
Export Process Flow for Timber Products In Malaysia
Timber and Timber Products are a controlled item that MTIB regulates, according to the MTIB Act.
Note that Products controlled by the MTIB only apply to exports from the Peninsula of Malaysia only. It does not include the states of Sabah and Sarawak.
In our above summary, there are only four main chapter headings (HS Code) that are regulated under the Timber Board. (Chapter 44, 47, 48, 94)
Our opinion is that it is better to break down exported timber or timber products into four main categories in order to understand it’s export licensing requirements.
Timber and timber products that are controlled and have an export quota require special approval from the timber board MTIB before exporting.
Products that require special approval require special attention, examples of certain products that are regulated are unprocessed rattan, coconut trunks, oil palm trunks, and plantation logs.
However, under certain strict conditions, these cargos are allowed for export. Conditions such as international exhibitions, research and development, and market explorations are allowed by the Timber Board under this special approval requirement.
Business owners can register on the MCS MTIB website to do so, all of the approval processes are made online, which makes the process simpler and more efficient.
MYTLAS also stands for Malaysia Timber Legality Assurance System is a way for the government of Malaysia to combat illegal logging and the trade in illegal timber and timber products
The scope of MYTLAS covers cargos under the chapter heading 44 and 94; (Woods and article of Woods and Furniture Products)
Sample MYTLAS Export License.
List of Products Covered under MYTLAS.
There is a subtle difference between TLAS and MYTLAS that is worth mentioning.
TLAS, or Timber Legality Assurance System, is part of the EU FLEGT action plan that attempts to prevent illegal log imports into the EU, promote the supply of legal timber, and increase awareness and demand for legal timber.
Malaysia is a member of a Voluntary Partnership Agreement (VPA) that actively implements the EU FLEGT action plan.
Consequently, the MYTLAS licensing requirement is, insofar, only for the export of the timber products covered above bound to the European Union.
Similarly, Sabah and Sarawak have its own compliance requirements, although under a different certification body.
Sabah Forestry Department issues a Sabah TLAS Certification of Compliance (STCC) in accordance with the TLAS guidelines.
Forestry Department Sarawak (FDS), on the other hand, promotes Sarawak Timber Legality Verification System (STLVS)
Malaysia is one of the Contraction Nations of CITES or the Convention of International Trade in Endangered Species of Wild Fauna and Flora.
The aim of CITES, as the name suggests, is to protect and control the international trade of endangered species of flora and fauna.
The link below provides a scheduled list of species and specimens under the protection of CITES.
CITES, in the context of this article, protects wild flora, or endangered plants. However, the scope of CITES also covers the trade of endangered animals or animal products.
The export of any specimen of a species under the CITES protection requires prior grant and presentation of an export permit.
The difference between CITES permit and other licensing requirements is that products that are “in-transit” also require a CITES permit.
Hence, although a protected specimen or species arrives at the Ports in Malaysia, the specimen is intended for another destination in another country. The exporter in Malaysia is not excluded from the mandatory CITES permit application.
CITES permit application is also made simple, a legitimate exporter that meets all necessary requirements may apply online via the MCS website too. A fee of RM 50.00 is imposed on each CITES application.
Products that do not require Export Licenses
Wooden furniture products, listed under the chapter heading 94, are excluded from any export license requirements (so far).
This is on the condition that the cargo being exported is exempt from MYTLAS, CITES, or any Special Approval requirements.
Exporters that utilizes the chapter heading 94 do not need to apply via MCS MTIB.
MTIB Inspections and arrangement
For all exportation that requires an export permit, whether it be under Special Approval permit, MYTLAS or CITES, the MTIB reserves the right to carry out physical inspections of the cargo at site.
Because of that, the physical inspection will be carried out before the cargo arrives at the Port of Loading.
Exporters need to tread carefully to both meet the vessel’s closing time and meet the physical inspection requirements imposed by MTIB.
Like every permit or license application, the MTIB physical inspection arrangement can be arranged online via the MCS MTIB website.
It is entirely up to the MTIB enforcement team to decide whether your cargo needs to undergo a physical inspection. In some cases, the export license is approved even without a physical inspection.
There are three types of online registration that are processed via the MCS MTIB web portal.
- Special Approval
- Process Registration
- Import Registration
- Export Registration
- Grader’s Registration
The conditions for registration for any types of timber licenses, whether for trading, exporting, importing or grading are straight forward. Apart from two distinct requirements, which are the company structure and the requirement to participate in one or more associations recognised by MTIB: –
- Timber Exporters Association Malaysia (TEAM)
- Malaysian Wood Industries Association (MWIA)
- Persatuan Pengusaha-Pengusaha Kayu Kayan dan Perabot Bumiputera Malaysia (PEKA)
- Malaysian Panel Product Manufacturers’ Association (MPMA)
- Malaysian Wood Mouldings & Joinery Council (MWMJC)
- Malaysian Furniture Council (MFC)
Other Documents required for MCS Registration
The documents required for a special approval registrations are: –
- Form 24
- Form 49
- Corporate information (For those registered under the new SSM guidelines)
- Any form of association’s certificate
- Company structure details and employee details
- Memorandum and Article of Association
Sabah Timber and Timber Products Export Procedures
Difference between Timber and Log
Logs are chopped trees that undergo minimal processing. Whereas timbers are processed, or chopped into sizes. Timbers are basically processed logs that are readily used for home construction or carpentry works.
To date, Sabah state has banned the export of log woods, the ban is placed in order to promote local upstream wood industries such as furniture and woodworking industry.
With that being said, the state authorities are constantly re-evaluating the effectiveness of the log export ban. It may be the case sometime in the future that exports of logs are permitted.
Processed Timber Export Royalty
|Belian Sawn Timber
|RM 100 per cubic meter
|Sawn Timber of Other Species
|RM 10 per cubic meter
|RM 5 per cubic meter
|RM 10 per cubic meter
|RM 5 per cubic meter
Inspection fees and certification charges on imported timber
Processed Timber Export License runs at RM 2500.00 per month.
Registration as a Timber Exporter in Sabah
Prospective Exporters have to register with the Sabah Forestry Department (SFD) or “Jabatan Perhutanan Sabah” (JPS) prior to engaging with any exporting activities.
Documents required for registration
- Memorandum and Company’s Article of Association
- Certificate of Incorporation (Form 8)
- Certificate of Incorporation on Change of Name of Company (Form 13)
- Shareholder’s List (Form 24)
- Return giving particulars in Register of Directors, Managers and Secretaries and changes of particulars (Form 49)
- Contract copy between the exporter and the timber/log supplier
- Paid Up Capital of RM 100,000 minimum
- Any other supporting documents and log harvesting licenses as required by the state authority
Firstly, a potential exporter has to fill in a form (Form FD/EIS), the form can be acquired from the Sabah Forestry Department.
The state authorities will deliberate the application. If all the necessary requirements are met, the state authority will issue an approval letter and impose a registration fee towards the applicant.
Note that the registration requires periodical renewal, depending on the validity of a company’s registration. Only an approved exporter is allowed to apply for an export license to export timbers and timber products. The export license is done on a per shipment basis.
Each export license application requires the following documents
- Customs Declaration Form (K2 – export, K3 – export to other states of Malaysia)
- Shipping Documents (Invoice, Packing List, Bill of Lading)
- CITES permit (if any)
- STCC Permit (If any)
- Receipt for Timber Royalties Paid
- Physical Inspection Report from the SFD
Sarawak Timber and Timber Products Export Procedures
The underlying procedures are relatively similar to the procedures we have in Peninsular Malaysia and Sabah. Whereby the prospective exporters are required to register with local state authorities as a timber, log or timber products exporter.
Once an entity is registered as an exporter, they can proceed to apply individual licenses suited that are required for that particular product. Each application is only valid on a per shipment basis only.
For Saraak, the local state authority that regulates such export activity is the Sarawak Timber Industry Development Corporation (STIDC).
Of course, the requirements of CITES and MYTLAS also apply for any export operations in Sarawak as well.
Similar to the requirements in Peninsular Malaysia and Sabah, each export shipment is subject to a physical inspection by the STIDC.
However, the finished goods such at finger joints, dowels and mouldings require mandatory inspections prior to export.
Peninsular Malaysia Timber and Timber Products Import Procedures
The process of importing timber and timber products into Malaysia can be daunting, and it is inherently so in order to: –
- Control and regulate the trade of timber and timber products, to weed out illegal timber trade
- Protect the local timber and timber products market.
Whatever is written in this article can only be described as a brief outline of requirements for timber import.
Firstly, regulations under the CITES convention still apply, and are patrolled by respective authorities in Sabah (SDF), Sarawak (FDS), and Peninsular Malaysia (MTIB).
Once again, the main HS Chapter heading that requires an Import License is chapter 44.
|Logs; wood in the rough, whether or not stripped of its bark or merely roughed down; wood roughly squared or half-squared but not further manufactured; and baulks
|Poles and piles of Bakau (Mangrove) (Rhizophora spp)
|Plywood, veneered panel and similar laminated wood
Chapter 44 – Logs, Mangrove Piles, Sawn Timber, Particle Board, Fiber Board, Plywood, Veneered Panel and similar laminated woods.
List of documents required to import the above mentioned products are: –
- Import License (JK69)
- Registered Importer Letter (MCS MTIB)
- Malaysian Quarantine and Inspection Services Permit (MAQIS Permit)
- Certificate of Origin (COO)
- Shipping Documentations (Bill of Lading, Invoice, Packing List)
Similar to the export requirements in Malaysia, importers of the above-mentioned products are required to have an appointment with the State Forestry Departments to undergo physical inspection.
During the inspection, the state authorities have the right to further investigate and trace the legality of the imported cargo. This is why importers have to provide additional supporting documents to prove the cargo’s legality.
- FLEGT licence; or
- Certificate of Timber Certification (PEFC, MTCS) ; or
- Certificate of Voluntary Legality Scheme; or
- Legality Document issued by recognised Agency/Body/Association related: or
- Self-Declaration recognised by a Competent Third Party; or
- Copy of Customs Declaration from exporting country.
MAQIS Import Permit Requirement
As a brief introduction, the Malaysia Quarantine and Inspection Services (MAQIS) is an organization that enforces inspection and quarantine requirements for any relevant cargoes that come in and out of Malaysia.
We specifically chose to use the term “relevant” cargoes, as MAQIS enforces inspection and quarantine rules and regulation that spans multiple governing agencies.
This provides a one-stop solution to importers and exporters that trades with Malaysia, in the sense that any permit required from the below-listed governing agencies are issued and monitored by one single entity.
- Department of Agriculture (DOA)
- Department of Veterinary Services (DVS)
- Federal Agricultural Marketing Authority (FAMA)
- Department of Fisheries (DOF)
- Fisheries Development Authority of Malaysia (LKIM)
Back to the term “relevant” cargoes, any cargoes that require quarantine and inspection upon arrival or departure of cargo including: –
- Animal or Fish Carcasses
- Plant Products
- Animal Products
For any timber and timber products, it falls under the jurisdiction of the DOA (Plant Quarantine Act 1976), hence we need to apply for an import permit for the listed regulated products via MAQIS.
|Bamboo, or any form of Bamboo products
|Pet Bedding, Wood Pallets, Saw dusts,
|Processed Rattan or Rattan Products
|Sawn Timber/LSS, Logs, Wood Chips
**LSS Timber refers to Large Scanting Squared Timbers
MAQIS follows the strict definition of the term “Plant” according to the Plant Quarantine Act 1976, which is defined as : –
“any species of plant or any part thereof whether living or dead and includes the stem, branch, tuber, bulb, corn, stock, budwood, cutting, layer, slip, sucker, root, leaf, flower, fruit, seed or any other part or product whatsoever of a plant whether severed or attached but does not include any plant product that has undergone a process of heat and drying treatment”
There are two conclusions that can be drawn from this definition: –
According to the term “Plant” adopted by MAQIS, timber and timber related products are categorized as plants, hence it is under the jurisdiction of the Plant Quarantine Act 1976.
In addition, MAQIS permit only applies for imported timber or timber products under the HS Code Listed above (4401, 4407, 4415) that do not undergo heat treatment.
Sabah Timber and Timber Products Import Procedure
To start, the first thing an importer has to do is to register with the forestry department as a licensed timber/timber product importer.
The document requirements are listed above, the state authority has the right to request any additional supporting documents to substantiate the registration application.
The basic tenets of document requirements are similar to those of the export documents.
As of the time of this article, the application processing fee is at RM 50 per application.
Only a registered timber or timber product importer is allowed to import those products from approved ports and jetties.
An importer has to apply for an import permit for every shipment arranged, the application has to take place at least days prior to the cargo’s arrival to any approved ports and jetties.
The Sabah Forestry Department then determines if a physical inspection of the cargo is necessary.
What separates Sabah’s import permit administration from that of the Peninsular Malaysia (MTIB) is the additional requirement of a Good Behavior Bond or RM 10,000. The importers have to post this bond prior to importing the cargo as a sign of goodwill.
Finally, every importer has to prepare a monthly imported timber products report to the Forestry Department.
Sarawak Timber and Timber Products Import Procedure
Similar to both the state of Sabah and the Peninsular Malaysia, any would-be importer has to register as a licensed timber or timber product importer before starting any import of timbers and logs.
The difference is that the governance of any import and export activities in Sarawak is administered by the Sarawak Timber Industry Development Corporation (STIDC).
To understand further, please refer to the official website: –