Malaysia makes contingency plans for agriculture exports under EU deforestation rules

KUALA LUMPUR: Malaysia has contingency plans in place to remain competitive in European markets as it works to avoid being classified as a “standard risk” country under the European Union’s new deforestation rules, the commodities ministry said on Tuesday (Aug 26).

If Malaysia fails to acquire “low risk” status, engagement sessions will be conducted with all industries that export agricommodity products to Europe to ensure they comply with EU requirements, the Ministry said in a parliamentary reply.

Malaysia is currently classified by the European Union as a “standard risk” country under its new Deforestation Regulation (EUDR), alongside Indonesia and Brazil.

Under the EU regulations, 3 per cent of shipments from “standard risk” countries need to be inspected by the authorities, while “low risk” countries face less stringent due diligence rules.

The four “high risk” nations – Belarus, Myanmar, Russia and North Korea – face the strictest compliance checks.

The EU law, which is expected to come into effect in December, applies to soy, beef, palm oil, wood, cocoa and coffee, and some downstream products like leather, chocolate and furniture.

The Malaysian government has previously expressed concern about the “standard risk” classification, saying that it was based on old data.

The ministry will also ensure that the qualitative assessment elements for the country benchmarking system implemented by the EU can be fulfilled, it said.

Via the Special Committee for EUDR Implementation, it will also propose solutions for issues that span multiple jurisdictions of various ministries and agencies, it added.