Policy on AP from MITI

Just got this "Policy On Approved Permit (AP) For Motor Vehicle" from the MITI website:

1. Import Licensing through Approved Permit (AP) was introduced in 1970 with the objective of promoting and providing opportunities for bumiputera entrepreneurs in the automotive sector.

2. In 1987, a review was undertaken on the AP policy involving all 269 AP holders:


DECISIONS
* There will be no APs considered to new non franchise companies with immediate effect. Allocation of APs is restricted to new franchise companies only.
* Allocation of APs for 153 companies were withdrawn due to:
- business not in operation;
- no showroom and service facilities;
- misuse of AP, i.e. selling of APs;
- improper management of account i.e. allowing unauthorised parties including non AP holders to manage the account.
* Continue APs allocation to existing 116 companies, comprising:
- 76 Open AP Holders (to import any brand of car from any country); and
- 40 Franchise Holders (to import specific brands and makes from its principal).
* Encourage the existing quota holders to join/form consortia:
- to enhance efficiency; and
- to be more viable in terms of access to financial, after sales service and showroom facilities.

CURRENT POLICY

3. COMPLETELY KNOCKED DOWN (CKD)
* APs for importation of CKD packs by manufacturers, assemblers or contract assemblers are based on requested by the companies.
* Companies must have valid Manufacturing License or Contract Assembly approval.
* Companies that are in direct competition with models produced by national manufacturers are required to export 80 per cent of production. Performance of export must be submitted to MITI on monthly basis.

4. COMPLETELY BUILT-UP UNIT (CBU)
* APs on Passenger Cars are divided into 2 categories:
- non-franchise APs (open APs) for new/used passenger car and multipurpose vehicle (MPV).
- franchise APs for specific makes and models of passenger car and MPV.
* A new franchise company is evaluated based on:
- valid franchise agreement between importer and the principal/manufacturer;
- direct importation of vehicles from the principal/factory overseas;
- the models have not been assembled/ marketed in Malaysia;
- 70 per cent bumiputera equity holding;
- proven financial and management capability; and
- availability of sales/showroom facilities and after sales service.
* Import restriction (parallel import) is granted on brands under exclusive franchise agreement.

5. ADMINISTRATION OF APs
* Allocation of APs
- For new franchise companies, annual allocation of APs is based on the number of distributors and dealers appointed.
- Subsequent annual allocation is based on previous year’s performance of import and sales.
- Company to submit the import and sales performance report by the 10th of every month.
- Documents to be submitted are copies of:
- Form JK69 (AP) – Approved Permit (AP) issued by MITI
- Form K1/K8 – Import declaration issued by Kastam DiRaja Malaysia
- Sales Invoice – Issued by AP Holders to the distributors/buyers
- Certificate of Vehicle Registration (JPJ); and
- Letter of Undertaking – Issued by the financial institution.
- APs will not be allocated if company fails to submit the relevant documents and information.
* Issuance Of APs
- APs will only be issued upon submission of original Bill of Lading.

6. IMPORTS FROM ASEAN
* Effective 1 January 2005 all categories of vehicles imported from ASEAN are subject to import duty of zero to 20 per cent:
- CKD for all vehicles – zero import duty.
- CBU for Passenger Car/MPV/4WD/Van/Bus – 20 per cent import duty.
- CBU for Motorcycle – 20 per cent import duty.
* Importation of new motor vehicles from ASEAN requires APs for the purpose of monitoring and collection of data.
* APs will be issued based on quantity requested by Franchise Holders.

7. IMPORTS FROM NON ASEAN
* Effective 1 January 2005 all categories of vehicles imported from Non ASEAN are subject to import duty of 10 to 50 per cent:
- CKD for Passenger Car/MPV/4WD/Van – 10 per cent import duty.
- CKD for Bus and Lorry – zero import duty.
- CKD for Motorcycle – zero to 10 per cent import duty.
- CBU for Passenger Car/MPV/4WD/Van – 50 per cent import duty.
- CBU for Bus – 30 per cent import duty.
- CBU for Lorry – 35 to 50 per cent import duty.
- C BU for Motorcycle – 40 per cent import duty.
* Current arrangement on import requirements from Non ASEAN will continue.