Federal audit finds controls of imported vehicles via approved permits lacking at ports

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Federal audits showed there was no coordination in the issuance of permits between the Ministry of International Trade and Industries (Miti) and the Customs Department (JKDM) in charge of this. — Picture by Shahnaz Fazlie
Federal audits showed there was no coordination in the issuance of permits between the Ministry of International Trade and Industries (Miti) and the Customs Department (JKDM) in charge of this. — Picture by Shahnaz Fazlie

KUALA LUMPUR, Sept 28 — Imported vehicles that arrived at Malaysian ports under open approved permit scheme — better known by its Malay initials as APKT — were not monitored well, the Auditor-General said in the second series of the 2019 report released today.

Federal audits showed there was no coordination in the issuance of permits between the Ministry of International Trade and Industries (Miti) and the Customs Department (JKDM) in charge of this.

According to the Auditor-General's Report 2019 Series 2, officials from Customs and Puspakom who conducted a physical inspection at Port Klang (North) on July 23, 2020 to evaluate the entry of imported used vehicles into the licensed warehouse found that they had been cleared without the proper paperwork.

Following the physical inspection, the audit team obtained a list of vehicles in Port Klang (North) as of July 31, 2020. The list showed that 26 APTK companies imported 139 used cars on that date.

However, an audit check based on the chassis number found that 11 out of the 139 imported vehicles did not have the APTK.

Of the 128 that passed muster, the audit team found that the APTK for 12 were made only after the vehicles arrived at the port here. Four of them had different importer names based on port records and that logged in the ePermit system.

The remaining 11 vehicles did not have APTK and had been stuck at Port Klang (North) for 17 to 38 months.

“This does not comply with the APTK Policy Guidelines set that APTK (Form JK69) must be obtained before the vehicle arrives at the port. The Audit further found that the BL (Bill of Landing) date recorded in the ePermit system for the nine vehicles was later/equivalent to the date of arrival at the port.

“This record shows the occurrence of non-compliance with the APTK Policy Guidelines where importation should be carried out by the APTK company itself without an intermediary company. As of July 31, 2020, the Audit found that JKDM has not yet taken action enforcement of this matter,” the A-G said in the report.

The audit report also found that Miti was unable to detect cases of non-compliance with import conditions as Miti was not involved in vehicle monitoring at the port.

They said Miti only processes applications based on documents locked in by the APTK company into the ePermit system without cross-checking with records maintained by JKDM/Zone Authority.

“This can increase the risk of dumping of vehicles without APTK at the port and the APTK application is approved even if it does not meet the prescribed conditions,” the A-G said in the report.

The audit report recommended that Miti ensure that all agencies related to APTK perform their respective roles effectively as well as strengthen enforcement activities to increase the level of compliance of APTK companies with the rules and guidelines set.

“JKDM has established a monitoring mechanism through the system to ensure the collection of tax revenue and import duties are implemented more efficiently

“An integrated information system is established between Miti and JKDM to ensure control and monitoring of the use of APTK can be implemented effectively,” the A-G said.

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