The recent amendment of the Atomic Energy Licensing Act 1984 (“AELA”)—now retitled the Atomic Energy Act 1984 (“AEA”)—represents a fundamental shift in Malaysia’s regulation of atomic energy activities. Key provisions came into force in phases commencing 1 December 2025.
Beyond Nuclear Power
Although associated with nuclear power, the AEA does not primarily serve as a mandate for developing nuclear energy. Instead, it provides the necessary regulatory backbone for the safe use, security, and disposal of radioactive materials across diverse sectors, including healthcare, manufacturing, industrial testing, oil and gas, and research.
Consequently, the amendments operate less as an energy-policy directive and more as a modernised governance framework. The AEA supports the continued development of radiation-based technologies while aligning Malaysia with international regulatory best practices. Unlike the AELA, which focused narrowly on licensing specific activities, the AEA adopts a holistic view, governing the full lifecycle of radioactive and nuclear-related materials.
The table below sets out a summary of significant amendments under the AEA and its implications for companies.
|
Key Regulatory Area |
Previous Position (AELA) |
New Requirement (AEA) |
Commercial Impact |
|
Licensing Scope |
Limited scope: Only specified installations/activities required to be licensed. |
Expanded scope (s.12): All dealings with radioactive material, nuclear material, or radiation generators now required to be licensed. |
Wider regulatory net: Persons handling and generally dealing with radioactive materials in previously ambiguous areas now fall squarely within the licensing framework. |
|
Import, Export and Transit |
No explicit permit requirement for the cross-border movement of radioactive or nuclear materials. |
Mandatory permits (s.12A) required for the import, export, transhipment, or transit of radioactive materials, nuclear materials, or nuclear-related technologies. |
Supply chain interruptions: Failure to secure the necessary permits risks interruptions to the cross-border movement of goods. Logistics providers and just in time manufacturers must audit their supply chain immediately. |
|
Licence Validity |
Short-term validity: Licences valid for a maximum of 3 years |
Extended validity (s.16): Licences and permits may be valid for up to 40 years. |
Investment certainty: De-risks investments by locking in long-term regulatory approval for new projects. |
|
Decommissioning & Waste |
Limited framework: Limited regulatory obligations on disposal and decommissioning |
Detailed framework (ss.26A–27B): A detailed regulatory framework now governs decommissioning plans, radioactive waste management, spent fuel handling, and restricts disposal or reuse. |
Improved compliance: Strict “cradle-to-grave” accountability for radioactive materials to improve environmental accountability. |
|
Emergency Preparedness |
No explicit requirement for emergency-response planning. |
Mandatory emergency plans (s.21A): Licensees must prepare and submit emergency-response plans for regulatory approval. |
Elevated safety protocols: Persons handling and generally dealing with radioactive materials must integrate approved emergency plans into their safety protocols. |
|
Security & Safeguards |
Limited security measures: Focus on safety rather than security |
Global security standards: Introduces nuclear material accounting, 24-hour reporting, International Atomic Energy Agency (“IAEA”) inspection access, non-proliferation provisions, and a radioactive waste fund, among others. |
Adopting global standards: Aligns Malaysia with global standards, significantly raising the compliance bar for corporate security systems and internal reporting. |
|
Institutional Governance |
No advisory body: Administrative processes and appeal mechanisms less defined. |
Enhanced governance structure: Establishes the Atomic Energy Advisory Council to advise on policy and refines the Appeal Board mechanism for regulatory disputes. |
Transparency & accountability: Increases transparency in policy development and provides clearer recourse for regulatory decision-making. |
|
Offences & Penalties |
Lighter penalties: · General penalty of imprisonment up to 10 years and/or fine up to RM100,000. · Directors/ Officers liable for corporate offences.
|
Severe penalties: New offences introduced with substantially heavier penalties:
· Procedural breaches: Fines up to RM500,000 and/or 10 years’ jail. · Security/ Weapons offences: Death penalty or 30–40 years’ imprisonment (and min. RM30 million fine for companies). · Directors/ Officers’ liability is retained and carries significantly higher risks.
|
Existential corporate risks: The death penalty and significant fines make compliance critical to business survival. Company boards must prioritize strengthening internal controls and legal oversight to mitigate existential corporate risks and legal liabilities. |
A New Compliance Landscape for Dealing in Radioactive Materials
The AEA marks a pivotal shift in Malaysia’s atomic energy regulatory environment, expanding its scope to encompass more businesses while introducing stricter compliance obligations and severe penalties, including potential operational suspension and severe criminal liability. However, this rigorous framework is balanced by the introduction of long-term licensing options and the adoption of global standards, which provide industry participants with the regulatory predictability needed to make long-term investment decisions.
To navigate this new landscape, organizations must immediately audit cross-border supply chains to secure newly mandatory transit permits and avoid operational stoppages. With the stakes raised by severe criminal penalties, company boards should also prioritize strengthening internal controls and legal oversight to mitigate existential corporate risks and legal liabilities. Finally, industry stakeholders are encouraged to engage regulators early to leverage the new long-term licensing options, thereby securing greater regulatory certainty for future investment decisions.
By aligning with global best practices, the AEA not only ensures the protection of public health and the environment but also prepares Malaysia for a future where atomic technologies are central to commerce and daily life. For all stakeholders—from investors seeking opportunities to legal and professional advisors navigating new advisory areas—the amendments represent an essential step towards a resilient economy where economic growth and safety standards remain mutually reinforcing.
About the authors
Shaun Lee Zhen Wei
Senior Associate
Corporate & Capital Markets
Halim Hong & Quek
shaun.lee@hhq.com.my
.
Carmen Lee Kar Mun
Associate
Corporate & Capital Markets
Halim Hong & Quek
carmen.lee@hhq.com.my
.
Zoe Lim Zi Yi
Pupil-in-Chambers
Corporate & Capital Markets
Halim Hong & Quek
zoe.lim@hhq.com.my
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