Chinese-linked businesses in PKFZ are not evidence of tariff evasion

 PKFZ chairman Lim Lip Eng says it operates within a highly regulated customs and trade compliance framework.

The Port Klang Free Zone remains committed to ensuring that its facilities are occupied by legitimate, compliant and commercially sustainable businesses, said its chairman Lim Lip Eng. (File pic)

PETALING JAYA:

The presence of Chinese-linked businesses or international cargo at the Port Klang Free Zone (PKFZ) should not be interpreted as evidence of tariff evasion or illegal transshipment, Lim Lip Eng said.

The PKFZ chairman said Malaysia is a major regional manufacturing and logistics hub, adding that legitimate international trade naturally involves global supply chains, intermediate processing, consolidation and re-export activities.

As a Free Zone and integrated logistics hub, PKFZ operates within a highly regulated customs and trade compliance framework, he said.

“All investors, manufacturers, traders and logistics operators seeking to establish operations within PKFZ are subject to stringent screening, due diligence and regulatory requirements.

“Their operations must comply with applicable Malaysian laws, customs requirements, free-zone regulations and the requirements imposed by the relevant government authorities,” Lim said in a statement.

He was responding to news reports that Malaysia has been classified as a Tier 2 country associated with elevated illegal transshipment risk.

The report, titled “The Great Transshipment Scam: Rise, Scope and Costs”, alleged that Malaysia functioned as both a production “microhub” and maritime gateway, including through PKFZ.

However the report – published by the White House Office of Trade and Manufacturing Policy – acknowledged that the shift in US import sourcing away from China did not prove that all displaced Chinese trade had been illegally rerouted.

Lim went on to say that matters relating to the origin of goods and export certification were governed by the appropriate national authorities and are not determined by PKFZ.

When it came to the issuance of Non-Preferential Certificates of Origin (NPCO) for exports to the US, the matter was handled by the investment, trade and industry ministry (Miti).

According to Lim, the certification process is comprehensive, with Miti requiring, among others, cost analysis, statutory declarations, company and manufacturing information.

He said Miti also works together with the customs department to address potential transshipment offences.

“PKFZ remains committed to ensuring that its facilities are occupied by legitimate, compliant and commercially sustainable businesses.

“Where there are regulatory concerns or indications of non-compliance, we will fully cooperate with Miti, the customs department and other relevant authorities and take appropriate action,” he added. - FMT