Starting Tuesday, the Ministry of Investment, Trade and Industry (MITI) will be the sole issuer of certificates of origin for exports to the US to prevent illicit transshipment through Malaysia.
Issuance of such certificates by business councils, chambers or associations appointed by Miti will cease immediately, according to the ministry’s statement on Monday. The move tightens the control over the documents that prove the origin of goods for customs or trade requirements.
The change is necessary as the ministry continues its investigation into questionable transshipment practices — particularly in the solar sector, minister Tengku Datuk Seri Zafrul Abdul Aziz said on the sidelines of the Dewan Rakyat’s special parliamentary sitting on Monday.
The decision follows reports that certain exporters may have used Malaysia as a transshipment hub to bypass US tariffs on third-country goods — especially Chinese-made products.
“Given the widely reported cases and our preliminary findings, we believe this step is necessary,” Zafrul said. “We feel that we have to do this and we have to do audits and do more checking.”
The extent of Malaysia’s involvement in transshipment activities is still being quantified, Zafrul said. “For now, we are taking back that power,” he added.
Earlier on Monday, Datuk Mohd Shahar Abdullah, chairman of the Backbenchers Club and Paya Besar Member of Parliament urged the government to take over issuing certificates of origin to prevent “origin washing” that will damage Malaysia’s trade reputation.
Origin washing refers to the practice where companies reroute or re-label goods through third countries to hide their true origin and avoid tariffs, especially those imposed by the US on Chinese products.
Miti said it will also enhance audits on applicants of certificates of origin, investigate and take the necessary action in collaboration with the Royal Malaysian Customs Department to curb any transshipment offences to the US.
“The Madani government would like to reiterate that it is unequivocally committed to upholding the integrity of international trade practices,” it said.
“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”.
The US had earlier announced a 24% reciprocal tariff on Malaysian goods, a rate lower than those imposed on some other Asean nations, such as Vietnam (46%) and Indonesia (32%). However, the plan has since been paused for 90 days and a 10% standard tariff is applied in the interim.
Malaysia recorded a US$24.8 billion (RM109.5 billion) trade surplus with the US in 2024, according to the US Bureau of Economic Analysis. In 2024, the US was Malaysia’s third-largest trading partner and top export market, with RM199 billion in exports and RM126 billion in imports, resulting in a RM72 billion trade surplus.
- The Edge Markets