Independent review, not blind denial, needed to address US transshipment claims, says maritime trade expert

Malaysia should undertake an independent investigation into US allegations of transshipment activities to accurately identify violations and safeguard the nation's reputation, according to maritime trade expert Datuk Seri R. Jeyenderan. The review must trace the full journey of the cargo, encompassing the manifest, bill of lading, Customs paperwork, certificate of origin, storage records, any blending or processing, and the final declaration prior to export.

This approach mirrors the stance taken during the K8 matter, where concerns were raised regarding cargo movement, documentation, storage, blending, and final classification. Jeyenderan emphasized that a thorough examination and explanation of the findings are necessary to restore confidence. He advised the government to make the methodology and results public while safeguarding confidential commercial information.

Malaysia's lack of response to the issue could be seen as either a lack of ability or unwillingness to address it, potentially leading to heavier inspections, delayed clearance at ports, increased compliance costs, and heightened scrutiny over certificates of origin. This situation extends beyond a single US report and pertains to the credibility of Malaysia's ports, Customs controls, and trade documentation.

Jeyenderan urged Malaysia to respond promptly with evidence, independent verification, and a clear enforcement stance. Defending the country's interests does not imply shielding individuals who may have violated regulations; rather, it involves safeguarding legitimate Malaysian businesses by uncovering the truth and taking appropriate action.

He stressed that lawful transshipment is a part of international trade, while falsifying a product's origin or conducting minor processing to evade tariffs is not. The government should thoroughly investigate any credible allegations. If companies have broken the rules, they should be held accountable; if the allegations lack support, Malaysia should challenge them openly with evidence.

Blindly denying the allegations will not protect the nation's reputation; transparency will. Jeyenderan acknowledged that businesses may attempt to exploit legitimate transshipment activities to avoid tariffs, but it would be irresponsible to accuse the entire industry without evidence. He explained that the distinction lies in traceability; if goods simply pass through Malaysia or undergo repacking, relabelling, re-invoicing, or minor processing, this must be investigated.

However, if genuine manufacturing and substantial transformation occur in Malaysia, it constitutes legitimate Malaysian trade. Authorities must differentiate between these two scenarios using proper documentation and physical verification, not assumptions.