Quick Guide on Foreign Exchange Policy

A Resident Exporter (REx) shall receive the proceeds of its Export of Goods (PEG) in Malaysia:

(a)

in Ringgit (RM) or foreign currency (FCY) which shall be placed in a RM account or Trade Foreign Currency Account, as the case may be, maintained with a Licensed Onshore Bank (LOB)

(b)

in full value excluding any:

(i)

approved deductions related to the Export of Goods as listed below (refers to any one or more):

(ii)

amount spent for approved offsetting or writing-off arrangements as listed below where it enters into:

1.

agency commission including advertising or promotion expenses;

(A)

an offsetting arrangement with any Non-Resident (NR) to offset the REX’s PEG with:

2.

handling charge including freight and insurance or Takaful costs;

1.

import of goods and services by the REx;

3.

administrative error;

2.

warranty claim by the buyer;

4.

discount by the REx;

3.

dividend payment by the REx;

5.

quality and/or quantity claim;

4.

other Current Account Transactions; or

6.

short-shipment;

5.

repayment of FCY borrowing obtained by the REx in accordance with Foreign Exchange Policy Notice 2.

7.

shut-out;

(B)

a writing-off arrangement with a NR buyer of the exported goods to write-off the REx’s outstanding PEG due to:

8.

write-off arising from fraud;

1.

liquidation of the NR buyer; or

9.

goods that the REx does not own but is receiving payment for value added input; or

2.

REx is unable to receive the PEG from the NR buyer after at least twenty four (24) months from date of shipment despite following up with the NR buyer.

10.

buyer is under liquidation.

(c)

earlier than or in accordance with the payment date of the export contract which shall not exceed six (6) months from the date of shipment. However, where any of the circumstances stated below applies, the REx may receive the PEG up to 24 months from the date of shipment:

1.

The REx has no control over the delay in receiving the PEG due to unexpected circumstances, including but not limited to:

(i)

buyer in financial difficulties;

(ii)

buyer cancels, delays, disputes or does not respond to request for payment;

(iii)

restriction on foreign exchange transactions in the buyer’s country;

(iv)

quality and/or quantity claims; or

(v)

incidence of fraud.

2.

The REx has exported goods on credit terms of up to 24 months from the date of shipment to the buyer for:

(i)

consignment sale; or

(ii)

goods that involve testing and commissioning.

Non-receipt of PEG is allowed for goods exported ……

(d)

under a border trade agreement entered into by the government of Malaysia with any foreign government; or

(e)

where the goods are not for sale, as follows:

(i)

gift, donation, personal effects or business sample;

(ii)

goods that are exported for further processing, testing, repairing, exchange or exhibition, and subsequently will be imported back to Malaysia; or

(iii)

goods belonging to a NR that are exported after an exhibition in Malaysia or upon expiry of a lease or rental.

Reporting Requirement

(f)

Where a REx’s annual gross Export of Goods exceeds RM250 million equivalent in the preceding year, the REx shall submit a report on Export of Goods to Bank Negara Malaysia (BNM) via https://bnm.my/fep as and when required by BNM.

(g)

Where any PEG as referred to under item (c) above is not received by the REx within 24 months from the date of shipment, the REx shall notify BNM on the outstanding PEG within twenty-one (21) days after the end of each calendar year via https://bnm.my/fep.