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Update on MLI – Impact of ratification on Malaysia’s treaty network

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1. Malaysia signed the MLI on 24 January, 2018 and deposited its instrument of ratification on 18 February, 2021, as a result of which, MLI shall enter into force for Malaysia on 01 June, 2021.

2. At the time of signing of the MLI, Malaysia had notified 73 CTAs. The number of notified CTAs has remained the same at 73 at ratification. The complete list of CTAs notified by Malaysia is at Annex 1 of Enclosure. Out of these 73 CTAs, 49 jurisdictions have notified Malaysia as a CTA under their respective MLI position at the time of signing/ratification, as the case may be. A complete list of these 49 CTAs is at Annex 2 of Enclosure. Out of the remaining 24 jurisdictions, Austria, Czech Republic, Germany, Norway and Switzerland have not notified Malaysia under their respective MLI position, whereas, Bangladesh, Brunei Darussalam, Iran, Kyrgyzstan, Lao People's Democratic Republic, Lebanon, Mongolia, Myanmar, Namibia, Philippines, Sri Lanka, Sudan, Syria, Thailand, Turkmenistan, Uzbekistan, Venezuela, Viet Nam, Zimbabwe are not signatories to the MLI as of now.

3. Malaysia’s other notifications at the time of ratification of the MLI have remained more or less the same as made at the time of signing of the MLI. Broadly, various treaties of Malaysia shall be modified by the following MLI provisions (depending upon the notifications made/to be made by the respective treaty partner at the time of ratification already made/to be made by them):-

- Provisions in regard to transparent entities, as contained in para 1 and modified by para 3 of Article 3 to apply;

- The preamble text described in Article 6(1) would be included, being a minimum standard;

- PPT provisions described in Article 7(1) to apply, being a minimum standard;

- Provisions in relation to DAPE; when an agent is to be considered and not to be considered as an independent agent, as contained in Article 12 of the MLI, to apply;

- Option A and anti-fragmentation provisions in relation to artificial avoidance of PE status through the specific activity exemptions, as contained in Article 13 of the MLI, to apply;

- Definition of a Person Closely Related to an Enterprise provided in Article 15 of the MLI to apply;

- MAP provisions shall be updated, being a minimum standard;

- Provisions contained in Article 17 of the MLI to apply in certain treaties;

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