Under a national cabotage policy, domestic shipping is exclusively reserved for Malaysian ships unless suitable local tonnage is not available. Domestic shipping is defined as shipment or carriage of passengers or provision of shipping services between any port or place in Malaysia to another port or place within Malaysia or in the Malaysian EEZ.
To operate in this sector, a ship must possess a domestic shipping licence (DSL) issued by the Malaysian Ministry of Transport. The licences are issued for up to 2 years for ships under 10 years old and for older ships shorter periods of between three months to a year. The owners, master or operators of a vessel risk a fine up to RM 10,000 or imprisonment up to one year if found guilty of operating in the domestic sector without a licence.
Generally all ships registered under the Malaysian Ship Registry qualify for a DSL as of right while foreign ships are allowed on case by case basis. Foreign vessels, particularly those engaged in off shore oil and gas activities can apply for exemptions to operate in this domestic sector where suitable local tonnage is unavailable. Of late there are calls for liberalization and scrapping of the policy. The Firm monitors developments and advises its international clients on domestic shipping policy and law and attends to license applications.
The information herein is for general guidance only, may have been superseded, circumstances may have changed and does not in any way represent or replace professional legal advice which must be obtained in each individual case.