Malaysia May Permanently Waive Rules for Foreign Ships Working on Undersea Cables

Malaysia reinstates cabotage waivers for foreign ships repairing undersea cables, aiming to enhance the digital economy and connectivity.By Rozanna Latiff, Reuters
March 1, 2024

KUALA LUMPUR, March 1 (Reuters) – Malaysia has decided to reverse an earlier decision and allow foreign vessels to repair undersea cables in its waters, its transport minister said on Friday, adding the move may be made permanent to encourage tech investments and support the digital economy.

The government had revoked permission for international vessels from conducting such work in 2020, citing the outflow of foreign funds via freight payments and the need to develop the domestic shipping industry.

Major tech companies including Facebook, Google, Microsoft and Amazon had previously sought a reinstatement of the cabotage waiver, due to potential delays in submarine cable repair and maintenance. Such rules regulate shipping or trade activities in a country's waters or airspace.

Transport Minister Anthony Loke told reporters the government had agreed to restore the exemption following discussions with international technology and telecommunications industry participants.

“We will do everything necessary to ensure (the industries) that there is certainty in terms of this policy… and to attract more international investment not only on undersea cables but also in data centres,” Loke said.

Loke also announced other changes to Malaysia's shipping rules, including reinstating its cabotage policy on vessels shipping cargo from the country's peninsula to Sarawak state on Borneo island.

All local and foreign ships carrying out cargo services in Malaysian waters will also be required to apply for a domestic shipping license due to national security concerns, Loke said, while adding that approval processes will be eased.

The new rules are expected to come into effect within the next two months, he said.

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