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The Digital Omnibus has amended the EU AI Act. European companies in Malaysia face revised compliance deadlines and new obligations. Here is what has changed.

The European Commission has confirmed that the EUDR will not be reopened and that the December 2026 application deadline stands — closing the door on further legislative delay. The April 2026 Simplification Package restructures how due diligence obligations are distributed across the supply chain, but offers limited relief for Malaysian businesses: Malaysia's standard risk classification means that smallholders remain subject to full geolocation and traceability requirements, and legal due diligence under Malaysian law – land titles, environmental permits, MPOB licensing – remains the most time-intensive and underestimated element of EUDR compliance. Malaysian exporters who have not yet started should act now.

Geopolitical developments such as Middle East escalation can significantly impact pricing and supply chains, but the real risk for businesses lies in how their existing Malaysian-law contracts allocate these risks. Many contracts lack effective price adjustment mechanisms, and concepts such as force majeure or commercial hardship often do not provide relief for increased costs. As Malaysian courts generally enforce contracts as agreed, businesses should proactively review and strengthen their contractual frameworks to better manage volatility and avoid disputes.

The EU’s new Packaging and Packaging Waste Regulation (PPWR) reshapes market access for exporters. From August 2026, packaging must meet stricter recyclability, recycled content, reuse and PFAS standards. Malaysian exporters should audit packaging, strengthen documentation, and engage EU buyers early to safeguard continued access to the EU market.