Malaysia tightens rules on transshipment of foreign goods amid growing scrutiny by US authorities

SINGAPORE – Malaysia is imposing stricter rules to ensure exports to the US are properly documented, in a bid to curb the trans-shipment of products that do not originate in Malaysia.

The move comes amid growing scrutiny by the US authorities of countries such as China, which seek to sidestep American tariffs by routing exports via another country to disguise their true origin.

This practice, known as trans-shipment, has become a focal point in ongoing trade enforcement efforts by US Customs officials since the Trump administration unveiled its so-called “Liberation Day” tariffs on April 2.

Malaysia’s Ministry of Investment, Trade and Industry (Miti) announced on May 5 that with effect from May 6, it will be the only body that will issue non-preferential certificates of origin (NPCOs) for shipments to the US, stopping the issuance of these certificates by Miti-appointed organisations like local business councils, chambers or associations.

The NPCO is a document that helps to identify the origin of goods for international shipments in order to satisfy Customs or trade requirements of the countries the products are shipped to, the Federation of Malaysian Manufacturers said on its website.

The government’s new measure aims to eliminate loopholes that could enable the misuse of Malaysia as a conduit for goods seeking to bypass tariffs imposed by US trade regulations. Miti said in its statement that “it is unequivocally committed to upholding the integrity of international trade practices”.

“As such, the government views any attempt to circumvent tariffs through wrong or false declaration, whether related to the value or origin of goods, as a serious offence,” it added.

Malaysia faces a 24 per cent reciprocal tariff on its exports to the US, which is expected to come into force in July.

In the May 5 statement, Miti said it will also take