ROYAL MALAYSIAN CUSTOMS

BY
AHMAD SAFWAN HADI BIN ABD KHALIL MUHAMMAD ZAAKHIR BIN ZAKARIA MUHAMMAD AZZRAM BIN ABDUL AZIZ AHMAD KHAIRUL IZHHAM BIN AZMI TARMIZI BIN MOHAMAD SASITHEREN A/L SHAMUGANATHAM 02DLS11F1044 02DLS11F1051 02DLS10F2068 02DLS11F1038 02DLS11F1032 02DLS11F1008

BACKGROUND OF ROYAL MALAYSIAN CUSTOM

The Royal Malaysian Customs (RMC) / (Malay: Kastam Diraja Malaysia (KDRM)) is the government agency responsible for administrating the nations indirect tax policy. In other words, KDRM administers seven main and thirty-nine subsidiary laws. Apart from this, KDRM implements eighteen laws for other government agencies. Before any Western powers ever set foot in this land, a tax administration system had actually existed, that is during the heyday of the Melaka and JohorRiau Sultanate. In the era of the Melaka Sultanate, maritime and harbor laws existed along with matters pertaining to a tax structure involving the foreign and local merchants. The portfolio in charge of tax collection was the Harbor Master. He was entrusted by the king with the power to enforce rules and Harbor Laws. On September 16, 1963, the structure of the Customs and Excise Department administration was reshuffled again with the inclusion of Sabah, Sarawak and Singapore into Malaysia. The Customs department was divided into three main territories, that is the Peninsular Malaysia (West Malaysia), Sabah and Sarawak, where each territory were led by a Regional Comptroller of Customs and Excise.

ROLE OF ROYAL MALAYSIAN CUSTOM

The roles of Enforcement Division are as follows: 1. Carry out intelligence operations on smuggling activities to increase enforcement against smuggling and irregularities. 2. Carry out operations to eradicate smuggling in an integrated and coordinated manner through land and sea patrols, road blocks and inspection of suspected premises and outlets. 3. Carry out investigations on smuggling activities as a result of information received, public complaints or intelligence reports and to complete investigations in the stipulated time frame. 4. Carry out operations against targets or smuggling black areas to wipe out syndicate through raids, searches, operations and propaganda. 5. Open investigation papers on cases obtained for punitive action either through court prosecution or offer of compound. 6. 7. Manage the storage and disposal of seized goods efficiently. Carry out anti-smuggling campaigns to give awareness to the public regarding dangers of smuggling and build cooperation and networking with other local and overseas enforcement agencies. 8. Carry out enforcement tasks against offences involving Intellectual Property Rights (IPR), Anti Money Laundering and Terrorist Financing Act 2001, Anti Trafficking in Persons Act 2007, and Weapons of Mass Destruction (WMD).

Tasks The main tasks of Enforcement Division are as follows: Preventive and Seizure Carry out smuggling prevention tasks on land and sea. Management of seized and forfeited goods

Investigation Carry out investigation on cases Monitor status of high profile investigation papers Monitor investigation papers Assess strength and weakness of investigation paper Resolve cases through decision of round table discussion Carry out investigation in an integrated manner to speed up investigation of important cases. Prosecution Assess weakness and strength of investigation Carry out prosecution Study and propose amendments to legislation administered by Department Study judicial decision for bench marking purpose Carry out case study

Narcotic Plan drug enforcement and intelligence policy and program of Department to be in line with National Drug Strategy. Carry out drug detection in all land, sea and air entry gates of the country. Plan drug intelligence activities. Provide instruction and advice on drug enforcement and case investigation to states Provide adequate supplies and equipment and trained drug sniffer dogs for carrying out drug detection activities effectively. Issue circular letter, alert order, intelligence notice and case study on drugs enforcement. Intelligence Coordinate intelligence activities between states/station and headquarters. Study intelligence report and profiles sent by states/stations for further action. Study and analyze smuggling activities for purpose of planning and setting enforcement strategy. Study and analyze information on smuggling received and collected from various sources and plan strategy and issue order for further action. Prepare and distribute enforcement circular letters, alert order, intelligence notice and case study. Build and improve cooperation and networking with other local and overseas enforcement agencies.

Issue operation order to states for implementation to tackle smuggling when required and prepares result report of the operation.

Provide assistance to states/stations and other local and overseas enforcement agencies.

RULES AND REGULATIONS

Customs duty is a tax levied on imports by the customs authorities of a country to raise state revenue, and/or to protect domestic industries from more efficient competitors from abroad. In Malaysia, all goods dutiable on import are put through customs duty according to Customs Duties Order, 1996. The types of duties are import duty, sales tax, and export duty. The duty rates depend on the types of goods imported or exported. Royal Customs and Excise gives concession in the tariff rates for a range of goods along the lines of Malaysias dedication arising from the bilateral and multilateral trade negotiations with other Association of South East Asian Nations (ASEAN) members. Many goods deriving from other ASEAN members are eligible for admission into Malaysia at special rate of duty. Importers who wish to claim the special rate of duty must submit at the time of lodging an import entry certificate of origin given by a suitable authority of the exporting country. Goods imported for use as raw material in particular industries are exempt from customs duty. A tourist may bring in personal goods in reasonable quantities without paying duties subject to conditions. A Malaysian who has lived abroad or foreign nationals who have been permitted to reside in Malaysia are allowed to import used household belongings duty free, subject to conditions.

Raw materials used directly in the manufacture of approved products for export are exempt from customs duty, including packaging materials and casings. Trafficking of illegal drugs is a grave offence leading to death penalty. Items like 200 cigarettes, maximum 1 liter of wine, cosmetics, perfumes, soaps amounting to maximum value of Ringgit Malaysia (RM) 200, etc. can be imported duty-free if the items are imported by the visitor on his person or baggage or residents of Malaysia who have left the nation for more than 120 hours. All goods from Israel and South Africa and any item having an imprint of any currency note or bank note issued currently or at any time in any nation are prohibited. Free export of tobacco products and alcoholic beverages in reasonable quantities is allowed. Goods for export, whether dutiable or otherwise, must be displayed at the place of export or another place as decided by the Customs. Export goods can be declared by the owner, exporter, consignor or an agent allowed by the owner or exporter and approved by the Customs.

PROCEDURE IMPLIMENT BY ROYAL MALAYSIAN CUSTOM FOR EXPORT OR IMPORT

Objective 1. Work Specialization Flow is introduced to standardize imported goods release process. 2. To accelerate the process of imported goods release where other agencies such as the Pharmacy, Agricultural, Health and Veterinary Department has a part in this work specialization flow. Trading Importation Through Work Specialization Flow Trading importation procedure through this system involves a few stages as follow: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Form submission; Form inspection with document; Registration; Manifest inspection; Reference to other agencies; Inspection instruction; Goods inspection; Classification/ evaluation; Import tax payment; Release.

Importer's Role Royal Malaysian Customs Department expects cooperation from the importer to declare correctly and enclose complete supporting documents as follow : 1. 2. 3. 4. 5. 6. 7. 8. 9. Invoice; Packaging list; Delivery letter; Leaflet, catalogue and other related documents; Insurance certificate, if concerning; Loading bill/ Airway Bill; Letter of Credit; Permit, licenses/certificates; and Proof of fare payment.

The correct declaration form and precise supporting documents will assist in accelerating trading release.

EXAMPLE OF ROYAL MALAYSIAN CUSTOMS CUSTOM DECLARATION FORM