How Malaysian Companies Can Avoid U.S. Sanctions

Jeff Leong

Malaysian companies engaging in international trade are well advised to seek legal guidance on sanctions, export control and international trade law and policy given the current intense geopolitical rivalry that may adversely disrupt global supply chains.

“Prime Minister Anwar Ibrahim recently positioned Malaysia as a neutral hub for the semiconductor supply chain amid the US-China tech war, aiming to attract US$100 billion in new investments.

However, experts warn that Malaysia’s aim of maintaining geopolitical neutrality while expanding its semiconductor industry could expose local firms to sanctions.”

Read more here: https://www.freemalaysiatoday.com/category/nation/2024/06/03/us-slaps-sanctions-on-malaysian-semiconductor-firm/

To manage the risk of U.S. sanctions, Malaysian companies must take proactive steps.

  1. Understand Sanctions

1.1 Stay Informed: Regularly review U.S. sanctions administered by the Office of Foreign Assets Control (OFAC).

1.2 Check Lists: Frequently consult the Specially Designated Nationals (SDN) list and other OFAC lists to ensure compliance.

  1. Conduct Due Diligence

2.1 Verify Partners: Perform due diligence on all potential business partners, customers, and suppliers to ensure they are not subject to U.S. sanctions.

  1. Implement Compliance Programs

3.1 Develop Programs: Create a robust sanctions compliance program tailored to your industry and geographic footprint.

3.2 Train Employees: Educate employees on sanctions regulations and the importance of compliance.

  1. Monitor Transactions

4.1 Red Flags: Monitor transactions for any red flags that might indicate potential sanctions violations.

4.2 High-Risk Reviews: Establish controls to scrutinize transactions involving high-risk countries or entities.

  1. Seek Legal Advice

5.1 Consult Experts: Work with legal experts who specialize in U.S. and other sanctions to ensure compliance with the latest regulations.

5.2 Update Counsel: Keep your corporate or in-house counsel informed about any new developments or changes in your business that might impact compliance.

  1. Maintain Records

6.1 Document Efforts: Keep detailed records of all due diligence efforts, compliance measures, and transactions.

6.2 Ensure Accessibility: Make records accessible for audits or investigations.

6.3 Protect Privilege: Safeguard records with Solicitors Client Privilege.

  1. Report Violations Promptly

7.1 Notify Board: Report potential violations to your Board of Directors immediately.

7.2 Correct Issues: Seek legal advice and correct any issues.

  1. Stay Updated

8.1 Updates: Stay informed about changes in sanctions programs and regulations.

8.2 Training: Attend industry training sessions on sanctions compliance.

Sanctions risks and compliance are critical issues for companies engaged in exports and international trade, particularly for those planning IPOs on Bursa Malaysia and other stock exchanges.

At JLPW, our Sanctions and Corporate Compliance teams assist clients in assessing sanctions risks and conducting due diligence to address, pre-empt, mitigate, rectify, and manage sanctions compliance across various industries.

#sanctions #USSanctions #law #compliance #US #Malaysia #lawyers #corporatecompliance #semiconductors #exports #jlpw #internationaltrade

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www.jlpw.com.my

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Published by Jeff Leong

I am the senior partner of Messrs Jeff Leong, Poon & Wong, Malaysia. I am also serving with the Law Association For Asia And The Pacific (LAWASIA), the peak body for national bar associations and law societies in more than 40 jurisdictions in the Asia Pacific region as Chair of the Corporate, Securities & Investment Law and Co Chair of the Belt And Road Initiative Standing Committees. I lead a Special Projects team, structure and run complex M&A deals, resolve critical problems faced by clients such as crisis management, regulatory investigations, shareholder fights and board tussles and advise founders, business owners and senior management on business transactions. With numerous IPOs and M&A deals over 30 years, I am often consulted by clients in Shipping and Logistics, Technology and Digital Economy, Oil & Gas and other heavily regulated industries on complex, urgent and critical matters. I have been included on Asia Business Law Journal’s A List of Malaysia’s Top 100 Lawyers and Legal 500’s Hall of Fame for Corporate and M&A for Malaysia. I am an accredited Mediator of the Malaysian Mediation Centre, the International Commercial Mediation Centre For the Belt And Road Initiative, Benchmark Chambers International & Benchmark International Mediation Centre, Shenzhen Qianhai International Commercial Mediation Centre, CCPIT/CCOIC Hangzhou Mediation Centre and Hainan International Arbitration Court. I founded JLPW in 1999 during the 1997 Asian Financial Crisis with 2 other founders. We were deep into corporate rescues and mergers of banks, insurance companies and stockbrokers to resuscitate the bleeding Malaysian economy, working on some of the major corporate rescues of the 1997 Asian Financial Crisis. Affiliations with Deacons Graham & James 2001- 2012 and Dacheng (now Dentons China) 2012-2016 quickly followed. In 2012, we founded JLPW CROSSBORDER ASIA, a regional law firm network. In JLPW, we developed the current due diligence system adopted and used by industry participants in capital markets transactions in 1999. I assisted the review of the 2020 Due Diligence Guide for Malaysia with investment bankers, accountants, capital market lawyers and other industry participants. I currently lead our Japan Services Group, assisting Japanese companies venturing into Malaysia and South East Asia with market entry strategies, M&As and post merger integration advisory together with our Japanese speaking team. I am also leading our China Services Group and regional JLPW Belt and Road Services Group assisting Chinese companies investing and undertaking Belt and Road projects in Malaysia and other ASEAN countries. As leader, strategist, chief talent scout, builder and problem solver, I have initiated and developed various practice groups in JLPW and am now leading our Legal Tech initiatives to better support our clients in the new Digital Economy.

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