Port Klang Free Zone (PKFZ) chairman Lim Lip Eng responded today to a US report linking Malaysia to illegal transshipment risks, denying that the presence of Chinese-linked companies or international cargo in Malaysian free zones automatically indicates tariff evasion or illegal activity [1, 2, 3].
The US report, titled "The Great Transshipment Scam: Rise, Scope and Costs," ranked Malaysia in Tier 2 for transshipment scale and Chinese integration, citing over 40 countries at risk of illicit trade practices including Malaysia [1, 2, 3].
Lim emphasized that PKFZ operates fully under Malaysia's customs and trade compliance framework. All investors, manufacturers, traders, and logistics firms in the zone undergo screening, due diligence, and regulatory controls [1, 2, 3]. He clarified that PKFZ does not determine goods' origin or issue export certificates, roles reserved for government authorities [1, 2, 3].
Since May 6, 2025, Malaysia's Ministry of Investment, Trade and Industry (MITI) has been the sole body issuing Non-Preferential Certificates of Origin (NPCO) for US-bound exports, replacing chambers of commerce and business associations [1, 2, 3]. MITI applies rigorous certification standards, including cost analyses, statutory declarations, production details, raw material verification, and commercial documentation [1, 2, 3].
MITI has enhanced audit and verification mechanisms and cooperates closely with Royal Malaysian Customs to tackle potential transshipment offenses [1, 2]. PKFZ welcomed increased scrutiny and stronger enforcement against genuine trade fraud and pledged full cooperation with relevant authorities on regulatory issues [3].
Lim’s comments mark a public rebuttal to the US report’s warnings. PKFZ’s stance underscores Malaysia’s formal controls over free zone operations and export certifications.
The next scheduled milestone remains ongoing MITI-led audits and enforcement actions to ensure trade compliance and address risks of illegal transshipment flagged by international observers.
