REGULATORY REQUIREMENTS FOR CROSS-BORDER TRANSACTIONS IN MALAYSIA TAKING A LEAP FORWARD WITH ACTS

KUALA LUMPUR: A New Era for Regional Trade in Southeast Asia

The Association of Southeast Asian Nations (Asean) Customs Transit System (ACTS) has revolutionized the way goods are transported across member countries, simplifying a complex process that was previously plagued by multiple customs declarations and costly border clearances.

How ACTS Works

• Enables businesses to lodge e-transit declarations directly with customs authorities
• Allows for real-time tracking of goods from end to end
• Facilitates a single transit journey across participating countries

Benefits of ACTS

• Reduces transaction costs by 10% by 2020
• Improves regional trade and reduces border clearance costs
• Enables businesses to track their goods from loading at departure to delivery at the final destination, leading to lower prices for consumers

Challenging the Status Quo: A Seamless Adoption of ACTS

While some traders are hesitant to adopt the new system, citing comfort with existing arrangements, others have reported significant savings. According to Pigaga, a 27% reduction in costs for cross-border movement of goods using the ACTS is a promising start.

The Impact of ACTS on Regional Trade

Similar to what was seen in Europe after the removal of regulatory barriers nearly 20 years ago, the impact of ACTS on regional trade is expected to be significant. Ernst & Whinney found that the removal of regulatory barriers in Europe improved overall regional trade by up to 3% or €15 billion.

In the context of Asean, similar savings could be expected if regulatory requirements are streamlined and eased. As Pigaga noted, “It is a recognised phenomenon that such measures, along with provision of improved infrastructure, will in themselves result in increased trade flows as traders take advantage of a more benign environment.”