Customs officers aiding cigarette and liquor smugglers, claims whistleblower

A whistleblower has claimed that import licences are being misused to smuggle liquor and cigarettes into the country with the assistance of Customs Department officers, in return for “coffee money” of up to RM50,000.

However, the department has denied this.

The whistleblower told Malaysiakini that the modus operandi involves the department allegedly helping new companies register for import licences.

"The smugglers work in cahoots with several high-ranking Customs officers, who issue new import licences," the whistleblower claimed, adding that currently, there are at least 500 applications for cigarette and liquor import licences being processed.

"A lot of new companies, established without any capital and which only exist in name and without any operating premises, can import cigarettes and liquor worth hundreds of millions of ringgit.

"After obtaining operating licences, these companies bring in cigarettes and liquor from other countries into duty-free zones in our country, on the pretext of exporting to other destinations overseas.

"However, the contraband are then smuggled into the Malaysian market, without paying any Customs duty, thanks to help from several department officers.

“The companies involved will wind up after making tens of millions of ringgit in profit, only to resurface later, bearing different names and a separate board line-up," the whistleblower claimed.

According to the whistleblower, this modus operandi had only become popular in the last two years, since the Customs (Prohibition of Import) Order 1988 was amended in 2017.

The amendment made it compulsory for liquor and cigarette importers to show an import licence when declaring their goods to Customs.

Approval given to import up to 2.3m hectolitres

Malaysiakini has sighted several documents shown by the whistleblower as evidence for the claims. Among others, the documents showed an individual applying for 20 import licences between mid-2018 and 2019.

Furthermore, a new company that was established last year was granted permission in January this year to import up to 2.3 million hectolitres of liquor. One hectolitre equals 100 litres.

This quantity is far higher than that of established companies, which on average are allowed to import between 300,000 and 400,000 hectolitres annually.

The whistleblower also claimed that some companies, which have been in this business for more than two decades, were only given import licences for three months, despite having paid billions of ringgit in excise duty for alcohol.

Excise duty is a tax imposed on certain imported goods, including liquor.

The whistleblower also alleged that new companies that had never paid excise duty before were granted approval to import liquor for between six months and a year.

"Where is the Customs Department's transparency in giving cigarette and liquor import licences?

"Every new import licence application is charged 'coffee money' of between RM30,000 and RM50,000 by state Customs Department officials who support the applications.

"What is even more worrying is that even companies which have court cases related to import activities are still being given new licences," claimed the whistleblower.

Customs denies allegations

When contacted, Customs Department acting director-general Paddy Abdul Halim denied the allegations.

"I strongly deny the claims. The question of giving out licences without due diligence does not arise.

"We have a panel to approve new import licences. The panel scrutinises every document and the background of the company that applies for a permit. Thus, the question of giving licences to unqualified companies does not arise," Paddy said. - Mkini