Malaysia’s position as a regional trading and logistics centre depended partly on confidence in its customs procedures, cargo controls and trade documentation.
PETALING JAYA: Malaysia should address concerns raised by the United States over the possible misuse of its ports for tariff avoidance while safeguarding the country’s reputation as a regional trading and shipping hub, said maritime industry observer Datuk Seri Jeyenderan Ramasamy.
Jeyenderan said authorities should examine any specific allegations carefully and rely on evidence when determining whether individual companies or shipments had breached applicable laws or regulations.
“We should not become defensive about the US report. Ask for the evidence. Investigate it properly. Identify the companies and cargo involved. Then take action based on facts and the law,” he said.
He said Malaysia’s position as a regional trading and logistics centre depended partly on confidence in its customs procedures, cargo controls and trade documentation.
Jeyenderan said any concerns regarding certificates of origin or cargo declarations should therefore be addressed through appropriate verification, while ensuring legitimate trade and transshipment activities were not unnecessarily affected.
“Once international partners start questioning our certificates of origin or our cargo controls, genuine Malaysian businesses could be affected. Transshipment itself is not illegal.
“Malaysia is a major trading nation and cargo must be able to move through its ports. At the same time, legitimate transshipment should be distinguished from any attempt to misrepresent the origin of goods,” he said.
He said authorities could examine potential discrepancies between bills of lading, customs declarations, certificates of origin, commercial invoices and records relating to the movement or handling of cargo.
Jeyenderan said shipments involving goods originating from other countries and subsequently repacked, relabelled or processed in Malaysia could warrant closer scrutiny where there were questions over their declared country of origin.
“Changing a label or packaging does not, by itself, necessarily determine the origin of a product. Authorities should establish whether the relevant requirements for a change in origin, including any applicable processing or transformation criteria, have been met,” he said.
He said any investigation should also consider the wider supply chain and relevant parties involved in a shipment, rather than focusing solely on individual containers.
This could include importers, exporters, manufacturers, freight forwarders, customs agents, warehouse operators and commodity traders, depending on the circumstances of each case, he said.
“If a company is found to be deliberately misusing Malaysia to misrepresent the origin of goods, the appropriate action should be taken against that company. The entire Malaysian port industry should not be judged based on the conduct of individual businesses,” he said.
Jeyenderan also called for the Royal Malaysian Customs Department (RMCD) to continue strengthening risk-based screening, including through the use of information such as compliance records, shipment patterns, declared values, countries of origin, changes in consignees and unusual routing arrangements.
Rather than relying solely on physical inspections, he said data analysis could help authorities identify shipments or companies that warrant additional documentary or physical checks.
He also suggested greater information-sharing among Customs, port operators, shipping lines, enforcement agencies and relevant ministries to improve the traceability of higher-risk cargo throughout the supply chain.
“The authorities should be able to establish, where necessary, where goods originated, who handled them in Malaysia, whether any processing took place and where they were subsequently exported,” he said.
Jeyenderan said post-clearance audits could also play a role in ensuring compliance, particularly for shipments that were subsequently exported to markets where different tariff arrangements applied.
At the same time, he cautioned that enforcement measures should be proportionate and should not create unnecessary burdens for legitimate Malaysian manufacturers, exporters and logistics companies involved in international supply chains.
“Malaysia must be protective of its reputation, rather than resistant to scrutiny. Proper checks should strengthen confidence in our systems,” he said.
He said any businesses found to have breached the law should be dealt with based on the evidence and applicable regulations, while legitimate trade should continue to receive appropriate protection.
Jeyenderan said a transparent, evidence-based and company-specific approach would allow Malaysia to address concerns raised by international trading partners while protecting the credibility of its ports and legitimate businesses.
