# Forced Labour Compliance and Export Exposure > The s.90B offence, the law that actually prohibits passport retention, recruitment-fee liability, and the US and EU import bans that give all of it commercial teeth. - Category: employment - Language: en - Status: published - Updated: 2026-07-20 - Canonical: https://negaraku.md/en/employment/forced-labour-compliance-malaysia --- Between 2019 and 2022, US Customs and Border Protection blocked imports from eight Malaysian glove and palm oil producers. Companies repaid more than USD85 million in withheld wages to get the orders lifted. That is the commercial reality of forced labour compliance in Malaysia, and it is why this is a trade question before it is an HR one. ## The Malaysian offence **Section 90B of the Employment Act 1955** catches an employer who "threatens, deceives or forces an employee to do any activity, service or work **and** prevents that employee from proceeding beyond the place or area where such activity, service or work is done". Fine up to **RM100,000**, imprisonment up to **two years**, or both. Read the conjunction carefully, because it is the whole section. The *means* limb is disjunctive — threatening, deceiving or forcing will each suffice. The *confinement* limb is joined by **"and"**. Coercion alone is not s.90B; coercion plus restriction of movement is. One correction worth making loudly: s.90B was inserted by **s.41 of the Employment (Amendment) Act 2022 (Act A1651)** and came into force on **1 January 2023** under P.U.(B) 394/2022, which revoked an earlier order that had set 1 September 2022. The "List of Amendments" table printed in the Act's own updated text attributes s.90B to Act A1419 with effect from 1 April 2012. **That table row is wrong** — A1419 inserted s.90A, protection of officers. Anyone dating the offence to 2012 has read the index rather than the amending Act. Above s.90B sits the **Anti-Trafficking in Persons and Anti-Smuggling of Migrants Act 2007 (Act 670)**, where "exploitation" **includes** forced labour or services, and s.12 carries up to twenty years' imprisonment. Two features matter in practice: s.16 makes the victim's consent no defence, and s.17A removes any need to prove movement or conveyance. Act A1644, in force 22 February 2022, widened the definition from "means" to "includes" and deleted the definition of "coercion" altogether. ## Passport retention Every ESG questionnaire asks about it; almost every Malaysian article cites the wrong law. **The Employment Act 1955 does not mention passports.** Not once. The prohibition is **s.12(1)(f) of the Passports Act 1966**: possessing, without lawful authority, a passport issued for the use of another person. Fine up to RM10,000, imprisonment up to five years, or both. Section 12(1)(e) closes the consent route by making it an offence to let another person hold your own passport where you know it may be used by them. JTKSM states the position directly in its foreign worker FAQ. The soft spot is the phrase "without lawful authority", which no reported decision appears to construe in the safekeeping context. Voluntary employer custody is legally untested — which is a reason to provide individually keyed lockable storage instead, and Act 446 already requires exactly that. ## Recruitment fees Here Malaysian law runs against the international standard rather than with it. The **Employer Pays Principle is not law in Malaysia.** The **Private Employment Agencies Act 1981 (Act 246)** caps worker-paid fees rather than banning them: a placement fee of up to **25% of the first month's basic wages** from a job seeker, and up to **one month's basic wages** from a non-citizen employee, with registration fees of RM50 outside Malaysia and RM30 within. Section 14B(2) permits the employer to pay instead, and where it does, nothing may be demanded from the worker — permissive, not mandatory. Charging above the schedule is an offence under s.28, up to RM50,000 or one year. So an employer can be entirely compliant with Malaysian law and still fail a buyer's audit, because recruitment fees charged to workers are ILO indicator territory — debt bondage — regardless of what Act 246 permits. The eleven ILO indicators are: abuse of vulnerability, deception, restriction of movement, isolation, physical and sexual violence, intimidation and threats, retention of identity documents, withholding of wages, debt bondage, abusive working and living conditions, and excessive overtime. The ILO's own caveat is that a single indicator may in some cases imply forced labour. Malaysia ratified ILO Convention 29 in 1957 and its 2014 Protocol on 21 March 2022. It **denounced Convention 105 in 1990** and has not re-ratified. ## The export exposure Section 307 of the US Tariff Act of 1930 (19 U.S.C. 1307) bars goods made wholly or in part by forced labour. Until 2016 a "consumptive demand" exception let such goods in where domestic supply was short; the Trade Facilitation and Trade Enforcement Act of 2015, signed 24 February 2016, repealed it. CBP now detains under a withhold release order and seizes under a Finding. Malaysia's record since then: **WRP Asia Pacific** (2019, gloves), **Top Glove** (2020, escalated to a Finding in March 2021), **FGV Holdings** (2020, palm oil, modified 15 January 2026), **Sime Darby Plantation** (2020, escalated to a Finding in January 2022), **Supermax** (2021), **Smart Glove** (2021), **Brightway** (2021) and **YTY Industry** (2022). **All have since been modified or revoked** — CBP's published dataset as at 23 June 2026 contains no Malaysian entry, so there is no active US order today. The next wave is European. **Regulation (EU) 2024/3015** entered into force on 13 December 2024, but Article 39 applies the market ban itself from **14 December 2027**. The provisions already live are institutional — guidelines, the database, the single portal — not obligations on exporters. Malaysian palm oil, gloves, electronics and garments all appear on the US Department of Labor's 2024 List of Goods Produced by Child Labor or Forced Labor, which is where EU authorities will start looking. ## Common mistakes **Reading s.90B as an offence of coercion alone.** The confinement limb is conjunctive. **Dating s.90B to 2012.** The Act's own amendment table is defective; it commenced 1 January 2023. **Citing the Employment Act on passports.** It says nothing. The Passports Act 1966 does. **Assuming compliance with Act 246 fee caps satisfies a buyer.** It satisfies Malaysian law and fails the ILO debt bondage indicator. **Treating the lifting of the US orders as the end of it.** The EU ban applies from 14 December 2027 and works on a different mechanism. ## What's next Audit against the eleven ILO indicators, not against Malaysian statute — the two do not align, and the buyers who can stop your shipments use the ILO list. Start with the three that produced every Malaysian withhold release order: recruitment fees, identity document retention, and accommodation conditions. ## Sources - Employment Act 1955 (Act 265), s.90B, updated text as at 1 January 2023 — https://jtksm.mohr.gov.my/sites/default/files/2023-11/Akta%20Kerja%201955%20(Akta%20265)_0.pdf (Jabatan Tenaga Kerja Semenanjung Malaysia) - Adakah pasport pekerja asing boleh disimpan oleh majikan? — https://jtksm.mohr.gov.my/ms/soalan-lazim/penggajian-pekerja-asing/adakah-pasport-pekerja-asing-boleh-disimpan-oleh-majikan (Jabatan Tenaga Kerja Semenanjung Malaysia) - ILO Indicators of Forced Labour — https://www.ilo.org/publications/ilo-indicators-forced-labour (International Labour Organization) - Withhold Release Orders and Findings — https://www.cbp.gov/trade/forced-labor/withhold-release-orders-and-findings (US Customs and Border Protection) - List of Goods Produced by Child Labor or Forced Labor, 2024 edition — https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods (US Department of Labor, Bureau of International Labor Affairs) - Regulation (EU) 2024/3015 on prohibiting products made with forced labour on the Union market — http://data.europa.eu/eli/reg/2024/3015/oj (European Union) --- Source of truth: https://github.com/negaraku-md/NegaraKu.md License: CC BY-SA 4.0