Customs legislation and the legal framework in Malaysia has largely remained unchanged since the late sixties/early seventies, with the exception of implementation of WTO valuation rules, setting up of Customs Appeal Tribunal, introduction of Advance Customs Rulings in 2000, and the Strategic Goods Act in 2010. Customs laws are administered by the Royal Customs Department of Malaysia, an agency under the Ministry of Finance.
Malaysia Customs has a growing focus on post import audit activities and retroactive duty claims as a result of incompliance or weak classification and valuation positions. Duty revenue is reducing due to its fast expanding Free Trade Agreements network in recent years, perhaps causing Customs to take a more pro-active approach to assessing compliance.
The Ministry of International Trade and Industry (MITI) is the key regulator of trade policy including trade remedies (antidumping and countervailing, safeguard measures). MITI is responsible for regulation of the manufacturing sector, issues import / export license (amongst several other authorities), is the lead agency in negotiation of Free Trade Agreements and the authority for the endorsement of Preferential Certificates of Origin. The Strategic Trade Secretariat, the office that administers Export Controls, is also MITI.
In response to the development of more sophisticated business models, basic regulations and prescribed procedures (some introduced more than 30 years ago) are often complemented with a number of administrative procedures or “guidelines/schemes” to facilitate trade, with growing reliance on on-line processes. However, some of these procedures or modifications are not always reflected in legislation or are well documented in up-to-date, reliable materials. Therefore, in practice, consultation initiated by a company with the Authorities followed by a written “approval” is often necessary to obtain clarity.
Manoeuvring through the legal framework and these administrative procedures is often not a straightforward process and can be frustrating for companies to balance sustainability, optimise processes, and continue compliance.