KUALA LUMPUR, Aug 26 (Bernama) — Transhipment activities have not yet been fully clarified in terms of enforcement implementation as the United States (US) has not outlined in detail the categories of such activities, said the Ministry of Investment, Trade and Industry (MITI).
MITI, in a written reply published on the Parliament website today, said that on July 31, 2025, US President Donald Trump announced a new executive order on reciprocal tariff rates, with Malaysia being imposed a 19 per cent rate effective Aug 7, 2025.
“The latest US executive order stipulates that goods identified by the United States Customs and Border Protection (CBP) can be subject to tariffs of up to 40 per cent instead of the original reciprocal rate,” it said.
The ministry noted that transhipment activities do not conflict with the laws of any country as they are part of a global business strategy.
“However, transhipment involving the abuse of Certificate of Origin (COO) to circumvent or avoid import duties is an act that violates regulations,” it said, replying to a question from Senator Rita Sarimah Patrick Insol regarding the impact of US tariffs on the volume of transhipment cargo handled at Malaysia’s main ports.
MITI said the ministry has fully taken over the issuance of Non-Preferential Certificates of Origin (NPCO) for Malaysian products exported to the US, effective May 6, 2025, which were previously issued by business entities.
Among the improved NPCO criteria are that goods must be sourced or produced entirely in Malaysia, have at least 25 per cent local content, and undergo significant changes in tariff classification.
MITI has also tightened controls by increasing audits of exporting companies, working with the US authorities to combat “origin-washing”, and reminding the industry that false origin information can damage the country’s reputation and carry the risk of trade sanctions.
The ministry said the government will continue to monitor current developments to ensure the country remains a transparent and trusted logistics hub with integrity in the Southeast Asian region.
— BERNAMA
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