The Malaysian Bar - 2011/2012 Trade in Legal Services Committee Interim Report

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Trade In Legal Services (formerly known as GATS)

2011/2012 Trade in Legal Services Committee Interim Report

Thursday, 10 November 2011 04:09pm

The Trade in Legal Services Committee (“TILS”), previously known as the General Agreement on Trade in Legal Services (“GATS”) Committee, adopted the name change as its work involves a wide array of issues regarding trade in legal services, and not just GATS.

The objectives of TILS are to:

(1) monitor the developments of the trade in services industry, and educate and update Members of the Malaysian Bar on these developments; and

(2) liaise with, and assist, the Ministry of International Trade and Industry (“MITI”) and its entities in trade matters affecting the legal profession.

As with previous terms, the major focus for TILS for 2011/2012 was the liberalisation of the legal services sector. Throughout 2011/2012, TILS worked with Attorney General’s Chambers (“AGC”) and Bank Negara Malaysia (“BNM”) to ensure that the liberalisation of the legal services sector in Malaysia would be carried out in a systematic and well-planned manner.

6th ASEAN¹ Law Forum

The 6th ASEAN Law Forum (“Forum”) was held in Bandar Seri Begawan, Brunei Darussalam, on 13 and 14 Apr 2011. Bar Council sent representatives to the Forum at the invitation of the organisers and AGC. The representatives from Malaysia were:

(1) Muzalmah Mustapha Kamal, Head of Bilateral Trade, ASEAN and International Finance Unit, AGC;

(2) Nor Lina Elias, Federal Counsel;

(3) Hon Kai Ping, Chairperson, TILS;

(4) Andrew Khoo Chin Hock, Co-Deputy Chairperson, TILS; and

(5) Chiam Ter Ping, then-Officer, Bar Council.

The theme for the Forum was “Progressive Liberalisation of Trade in Legal Services in ASEAN”. The theme of the Forum was based on Brunei Darussalam’s proposal paper at the 12th ASEAN Senior Law Officials Meeting (“ASLOM”) and the 7th ASEAN Law Ministers Meeting (“ALAWMM”), which were held on 17 and 18 Oct 2008, and 19 and 20 Oct 2008, respectively, in Bandar Seri Begawan, Brunei Darussalam.

The original paper was intended to provoke thought amongst government legal officers within ASLOM on what seemed to be the impending need to look into the progressive liberalisation of trade in legal services in ASEAN.

The programme of the Forum was tailored to enable the ASEAN Secretariat, countries that had made commitments on trade in legal services, and countries that had not, to make their views known to each other. The main programme of the Forum was as follows:

13 Apr 2011

Opening Speech by Datin Paduka Hjh Hayati POKSDSP Hj Salleh, Attorney General of Brunei Darussalam;

Presentation on “General Framework of Trade Liberalisation in ASEAN”, by Tan Tai Hiong, Senior Officer, ASEAN Secretariat;

Presentations from ASEAN Member States that Have Made Commitments on Legal Services in ASEAN by Cambodia, Indonesia, Malaysia, Thailand and Vietnam; and

Presentations from ASEAN Member States that Have Not Made Commitments on Legal Services in ASEAN by Brunei Darussalam, Philippines and Singapore.

14 Apr 2011

Presentation on “Singapore’s Recent Experience in the Law Reform of its Legal Profession”, by Eunice Tan, Deputy Director, Industry Development Division, Ministry of Law, Singapore and Jeffrey Chan Wah Teck SC, Deputy Solicitor-General, Attorney-General’s Chambers, Singapore; and

Presentation on “Experience of the European Union in the Regional Liberalisation of its Trade in Legal Services”, by Mickael Laurans, member of the Law Society of England and Wales, and the Council of the Law Societies and Bars of Europe.

At the Forum, Malaysia explained its progress as a service-orientated economy. Total trade in services in 2009 amounted to RM195 billion. Malaysia’s Gross Domestic Product for the services sector increased from 55.2% in 2008 to 57.4% in 2010.

Malaysia had made a commitment to develop and promote the services sector, which would have a lead role in driving economic growth. Malaysia had made careful and progressive plans for the liberalisation of services, which include:

(1) Tenth Malaysia Plan 2011-2015;

(2) Third Industrial Master Plan 2006-2020; and

(3) Third Outline Perspective Plan 2001-2010.

These plans will drive development in eight services subsectors, including, among others, business and professional services such as legal services.

Some of the challenges linked to the liberalisation of the legal services sector in Malaysia include the task of maximising the benefits of liberalisation and protecting domestic legal services providers. The Government is currently working with Bar Council to ensure that liberalisation is done in a gradual, controlled and structured manner.

It is hoped that through liberalisation, domestic legal services providers may obtain direct, formal and real transfer of technology.

At the forum, Hon Kai Ping moderated the session titled “Singapore’s Recent Experience in the Law Reform of its Legal Profession”, during which Singapore explained the steps, challenges and responses it faced in the liberalisation of the Singaporean legal services sector.

Consultation with AGC on the Liberalisation of the Legal Profession

For 2011/2012, Bar Council, through TILS, continued to work with AGC to ensure that liberalisation of the legal services sector was carried out in the best possible way.

Based on previous consultation meetings with TILS, AGC submitted the latest copies of the drafts for Clause 40A to Clause 40N of the Legal Profession (Amendment) Bill 2011, and Legal Profession (Licensing of International Partnership and Qualified Foreign Law Firms and Registration of Foreign Lawyers) Rules 2011, to TILS for reading before arranging for a meeting on 11 July 2011 at AGC, Putrajaya to finalise issues pertaining to the two documents. The purpose of the meeting was to obtain TILS’s final feedback on these documents before they were presented to the Cabinet.

AGC made it clear that the meeting would be the final one with Bar Council regarding the liberalisation provisions in the Legal Profession (Amendment) Act 2011. AGC expressed the hope that Bar Council would be able to give its final feedback on outstanding issues in the provisions, and that both parties would next meet at the launch of the international partnerships and qualified foreign law firms models to the public.

The Bar Council representatives gave their feedback to AGC, which were duly noted. AGC promised to inform the Cabinet of Bar Council’s views on the Legal Profession (Amendment) Act 2011.

The Legal Profession (Licensing of International Partnership and Qualified Foreign Law Firms and Registration of Foreign Lawyers) Rules 2011 was also discussed at the meeting.

Before the meeting ended, Bar Council requested that AGC consider the possibility of allowing Malaysian law firms to recruit foreign lawyers to work for them, as this would enable those firms that may not wish to establish an international partnership, to benefit from the liberalisation of the legal sector in Malaysia.

Consultation with BNM

BNM has also consulted Bar Council on the liberalisation of the legal profession in Malaysia, as licences will be given to qualified foreign law firms to practise in the area of international Islamic finance. The consultation was done as BNM realised that liberalisation of the legal profession would have a potentially positive impact on the Malaysian International Islamic Financial Centre (“MIFC”).

The first consultation for 2011/2012 was held on 12 Aug 2011 at Bank Negara, with a follow-up meeting on 17 Aug 2011. At these two meetings, Bar Council was represented by the Office Bearers and TILS.

A third meeting was held on 18 Aug 2011 at the Bar Council Secretariat, chaired by Lim Chee Wee, President of the Malaysian Bar. At that event, Tan Sri Dato’ Sri Dr Zeti Akhtar Aziz, Governor of Bank Negara, spoke at length to Members of the Malaysian Bar about BNM’s view regarding the liberalisation process and how it would impact MIFC.

During the session, BNM noted that Bar Council’s proposal for qualified foreign law firms was restricted to international Islamic finance. BNM then briefed all those present on the proposal by MIFC to expand the scope of qualified foreign law firms to encompass non-Malaysian laws on all matters, provided that they expertise in at least one of the following areas:

Cross-border Islamic finance transactions;
Non-Ringgit Malaysia denominated sukuk;
International fund and wealth management (especially establishment of international trusts and investment vehicles);
International treasury and deposit transactions; and
International takaful and retakaful.

Only three qualified foreign law firms would be permitted, and they would not be allowed to appear before Malaysian courts or take up conveyancing matters, unless the firms elected to employ Malaysian lawyers.

Through these consultations and briefings, both BNM and Bar Council were able to exchange ideas and viewpoints, and propose solutions to challenges that would affect the liberalisation process.

Promoting the Malaysian Lawyer

It has been one of the tenets of TILS that the local Malaysian lawyer should be given the opportunity to grow and reach full potential in any field or arena. Thus, TILS is a strong advocate for the promotion of the “Malaysian Lawyer” as a brand.

On 18 June 2011, members of Bar Council and TILS attended a talk by Cecil Abraham on how a Malaysian lawyer could take advantage of available opportunities and make an impact at regional and international levels.

In meetings with AGC, BNM, Malaysian Industrial Development Authority and other bodies, TILS and Bar Council have consistently championed that these bodies should allow Malaysian lawyers to be part of their delegations to other countries, as well as to apportion work to Malaysian lawyers. TILS and Bar Council believe that Malaysian lawyers have the experience and ability to handle cases on behalf of these bodies at an international level.

Acknowledgment

I wish to extend my appreciation and gratitude to my able Co-Deputy Chairpersons, Andrew Khoo and Christopher Leong, and members of TILS, for their support and contributions. My thanks also go to the Bar Council Secretariat staff, in particular Chiam Ter Ping, the officer-in-charge, for his invaluable contribution and assistance rendered throughout the term thus far.

Hon Kai Ping

Chairperson

Trade in Legal Services Committee

Date: 15 Sept 2011

(1) Hon Kai Ping (Chairperson)

(2) Andrew Khoo Chin Hock (Co-Deputy Chairperson)

(3) Christopher Leong Sau Foo (Co-Deputy Chairperson)

Members:

(1) Anita Sharma

(2) Balbir Singh s/o Singhara Singh

(3) Chen Kah Leng

(4) David Dev Peter