Post 1 March 2018, new Labuan companies that intend to trade in Non-Petroleum commodities are not required to be part of the GIFT programme.
The transition period has already been given which started from the issuance date of 8 March 2018 and will end on 30 September 2018. Henceforth, the revised Guidelines takes effect beginning 1st October 2018.
Non-Petroleum LITCs granted transition arrangements by LFSA to retain their licence are required to comply with the revised Guidelines’ requirements.
The revised Guidelines have expanded the parameter in recognising Professional Traders which include Principal Officer and officers performing senior management functions in specified areas such as risk management, procurement and etc.
The revised Guidelines take effect on 1st October 2018 and Non-Petroleum LITCs have been granted transition arrangement according to the specified dates. Notwithstanding, these companies have the option to opt out from the GIFT programme by surrendering their LITC licences prior to the specified dates.
• The Non-Petroleum has been carved out from the GIFT programme in line with the issuance of the Revised Guidelines. Any trading of Non-petroleum shall be undertaken under a separate Labuan structure.
• Similarly, for transitioned Non-Petroleum LITC that want to expand its commodities portfolio to include Petroleum commodities, a separate Labuan company would need to be registered and licensed under the GIFT programme to undertake the trading of Petroleum and Petroleum-related commodities.
The policy expectation on the compliance to the Guidelines’ would be made on practical basis i.e. a Petroleum or Petroleum related LITC will be assessed against a full’s year’s operation as regards the annual quantitative requirements.
LITCs that are not able to achieve the minimum requirement of USD50 million for turnover would be treated as non-compliance to the Guidelines and be dealt with accordingly under the Labuan Financial Services and Securities Act 2010. LITCs are advised to engage with Labuan FSA early should they foresee that they are not able to meet any of the quantitative requirements.
The definition of Professional Traders has been expanded under the revised Guidelines in which Principal Officer and any officer performing senior managerial functions in specified areas are now recognised as Professional Traders.
Existing Non-Petroleum LITCs have been granted transition arrangement according to the specified dates from the GIFT programme and hence may maintain the operational office up to that date.
The LITC is only allowed to undertake the trading of Petroleum and Petroleum-Related commodities as deliberated under Para 5.1. Para. 7.6 is to cater for LITCs that are undertaking business that are ancillary to the trading of Petroleum and Petroleum-Related commodities such as leasing, trading, consultancy etc.