CUSTOMS CLEARANCE FREQUENTLY ASKED QUESTIONS (FAQ)
✓ Inform SF Global Express if there are any changes to your company setup, address, person in charge and any changes on any clearance exemptions or restriction
✓ Regularly communicate with your overseas shipper to ensure all information and documentation provided is accurate
✓ Know the content of the items orders and the restrictions imposed by the Government of Malaysia
✓ Include the breakdown of freight and any discounts offered in shipment invoice
✓ Declare all items in the shipment including free gifts and additional samples
✓ Declare product details and description as specific as possible. Placing the Harmonized Code for the items in the shipment is strongly encouraged
✓ Ensure all required documents are kept as per the document retention requirement. Do Not wait for an audit to have a proper document control process in your company
✘ Declare a nominal value of the item. There is no such thing a “Free” when it comes to the value of an item. Companies must practice acceptable valuation method
✘ Declare the port of loading as the country of origin. Goods must be declared based on the true origin or the actual origin where the manufacturing was performed
✘ Declare items differently from the actual shipment content
Q1: Is SF Global Express Malaysia able to perform customs clearance for shipments imported into Malaysia?
Yes, SF Global Express has already appointed Clearance Agent who will be performing customs clearance for all shipments imported into Malaysia using SF Global Express network.
Q2: Is an importer required to appoint SF Global Express as a Clearance Agent?
No, an importer does not need to appoint SF Global Express as a Clearance Agent as it is not required by RMCD (Royal Malaysian Customs Department) for Express Courier Companies via KLIA, but it is advisable to do so if importer Clearance Agent is still within the MY Customs limit because there are certain activity which can only be perform by the appointed agent only.
Q3: When does SF Global Express initiate the customs clearance process?
Customs clearance process will start when we (SF Global Express at Destination Country) receive the invoice and other relevant document image from SF Global Express at the origin country.
Q4: What are the necessary documents needed for a normal import shipment into Malaysia?
In order to perform customs clearance, a full set of complete Commercial Invoice and the air waybill are required. If the item shipped is a controlled/restricted or prohibited, additional permit/license may be required by the authority.
Q5: How long does it take for a shipment to be cleared?
In Malaysia, shipment will only be cleared and released once all payment of duties and taxes have been paid. A shipment may be released by Customs before shipment arrival. Otherwise, if there are any issues with the shipment and documentation, shipment release may take 24 till 48 hours after shipment arrival.
Q6: Is SF Global Express allowed to perform any pre clearance prior to the arrival of the shipment?
Yes, this is allowed by Customs. Shipments which are controlled and restricted may require clearance to be completed after arrival as there may be customs examination required and additional documentation needed from the importer.
Q7: What is the declaration form provided for customs clearance in Malaysia?
Customs Form No 1 (K1)
Importation into Malaysia to a Principal Customs Area
Customs Form No 2 (K2)
Exportation from Malaysia to Overseas
Customs Form No 3 (K3)
Movement from Peninsular Malaysia to East Malaysia or vice versa
Customs Form No 8 (K8)
Bonded Movement of Dutiable and Non-Dutiable Shipments in Malaysia (FTZ to FTZ)
Yes, importation of shipments may attract duties or taxes or both.
Q8: Are there any duties and taxes imposed for importation into Malaysia?
SALES TAX (SST)
• Import Duties are imposed to shipments based on the items (0% to 30%)
• Calculated based on the CIF value of the shipment
• Duties are exempted if importer is in bonded area, designated area, Licensed Manufacturing Warehouse
• Excise Duties are imposed on controlled items defined by RMCD
• Cigarettes, tobacco, alcohol, spirit, liquor, gambling equipment, vehicles
• SST is imposed on all imported shipments
• 5% or 10% unless item is listed as Non-Taxable Goods or the importer has exemption under Person Exempted from Payment of Tax Order
• SST is not chargeable if shipment is moved to a Special Area/Bonded Area
Q9: Are there any shipments that will not incur any duties and taxes for importation into Malaysia?
Yes, for non-controlled and non-restricted items with a CIF value of below RM500, which is entering Malaysia via International Airport, therefore no duties and taxes will be imposed. This is referred to as a de minimis value.
Q10: What is De minimis and its facilitation in Malaysia?
De minimis shipments are also known as Direct Release shipments.
De minimis shipments are when imported shipments do not attract any duties and taxes due to its CIF value of below RM500 and is entering Malaysia via International Airport. Having said that, shipments must still be declared from customs using a simplified format with lesser data elements than formal clearance.
In Malaysia it is known as a K4 manifest which provides consolidated information of the shipments arriving into Malaysia.
However, any items under the Customs (Prohibition of Imports) Order 2017 must not be declared as a de minimis shipment regardless of its value.
Q11: What are items that are prohibited and controlled for importation under Malaysian Law?
Under Malaysian Law stated in the Customs (Prohibition of Import) Order 2017, there are Absolute Prohibition and Conditional Prohibition. You may refer to Order as per Appendix 1 for the full list. Below is a guide for items related to SF Global Express.
Absolute Prohibition – The importation of the items into Malaysia is absolutely prohibited
- Any items sensitive to any religion, belief in Malaysia or may disrupt the peace and harmony of the country.
- Pornographic Material items include but not limited to sex toys, sex dolls, illicit prints such as books, magazines, digital print and paintings etc.
- Reproduction of any currency note, bank note, or coin which are currently been issued in any country.
- Indecent printings, paintings, photographs, books, cards, lithographic, engravings, films, video tapes, laser discs, colour slides, computer disc and any other media.
- Any device which intended to be prejudicial to the interest of Malaysia or unsuited with peace.
- All genuses of Piranha fish.
- Turtle eggs.
- Cocoa pods, Rambutans, Pulasan, Longan, and Nam Nam fruits from Philippines and Indonesia.
- Intoxicating liquors containing more than 3.46 milligrams per litre in any lead or in any compound of copper.
- Daggers and flick knives.
- Broadcast receivers capable of receiving radio communication within the ranges (68 - 87) MHz and (108 - 174) MHz
- Sodium arsenate.
- Cloth bearing the imprint or duplicate of any verses of the Quran.
- Pen, pencil, and other articles resembling syringes.
- Poisonous chemical
- Lightning arresters containing radioactive material.
Conditional Prohibition – The importation of the items into Malaysia is allowed with an import license or in the manner provided by the Order
- Pharmaceutical Items such as Cosmetics, Vitamins, Supplements, Perfume, Skincare Products.
- Cigarettes, Tobacco and any items containing Nicotine.
- Wine, Liquor, Beer and Spirit as well as apparatus for home brewing.
- Any items originating from Israel.
- Any foodstuff and beverages for commercial purposes consumed by either human or animals.
- Any form of Animal Skins.
- Birds Nest.
- Wood or any wooden products.
- Telecommunication product.
- Rubber Products such as tires.
- Used/ Scrap electronic items including laptops and mobile phones.
- Egg in the shells.
- Any meat, bones, hide, skin, hoofs, horns, offal or any part of the animals and Poultry.
- Live animals-primates including ape, monkey, lemur, galago, potto, and others.
- Explosives and Fireworks
- Imitation arms, toy gun / pistols.
- Imitation hand grenades.
- Arms and ammunition other than personal arms ammunition imported by bona fide traveller.
- Bullet proof vests, steel helmets and other articles of clothing as protection against attack.
- Soil and pests including live insects, rats, snails, and cultures of plant disease causing organisms.
- Safety helmets (except as worn by motorcyclists or motorcycle pillion riders).
- Video machines excluding game watches and video games for use with television receiver.
- Motor vehicles.
- Batik sarong.
- Rice and Padi including rice products.
- Equipment to be connected to a public telecommunication network.
- Radio communication being used for telecommunication in the frequency lower than 3000 GHz.
- Saccharin and its salt.
- Parabola antenna for outdoor use.
- Pests and organisms which are capable of being injurious to plants.
- Live fish.
- Animal oils and fats.
- Household and agricultural pesticides.
- Electric domestic equipment that use 50 volt or 120 volt Dc or more
- Toxic and/or hazardous wastes.
- Corals, alive or dead.
- Apparatus/equipment for the brewing of beer in the home.
- Pharmaceutical products
- Plants listed under the CITES Convention (Convention on International Trade in Endangered Species of Wild Fauna and Flora).
Q12: How does an importer apply for a permit or license for controlled items?
An importer may apply for a permit or license for importation directly to the Government Agencies or through an agent. The designated Government Agencies may be referred to the Customs (Prohibition of Import) Order 2017 Column 5 of each Schedule.
Q13: How does an importer make payment on the duties and taxes incurred?
For shipments cleared by SF Global Express Malaysia, we will be paying the duties and taxes incurred on behalf of the importer. Duty Invoice will be issued to the importer.
Q14: Will SF Global Express be contacting the importer prior to clearance with Customs?
If the duties and tax incurred exceeds RM300, SF Global Express will attempt to contact the importer prior to customs clearance.
If the duties and tax incurred is below RM300, we will proceed with customs clearance to expedite the delivery of your shipment. Any disputes regarding the clearance will be reviewed on a case by case basis by the SF Global Express team
Q15: What are the reasons that may hinder shipments from being released by Customs?
- Item requires permit from a government agency
- Pending clearance approval from Importer
- Pending duty and tax payment confirmation by Importer
- Item requires physical examination by Customs or Other Government Agencies
- Valuation Related Issue – Item Value is not agreeable by Customs, may require Proof of Purchase from Importer
- Classification Issue – Customs is not agreeable with the item classification, may require catalogue or technical information of the item
- Insufficient Invoice provided during pick up at origin
- Temporary Import and Repair and Return Shipments require Physical Examination by Customs
- Expired Exemption
- Shipment is confiscated by Customs or Other Government Agencies
Q16: If there is an overpayment of duties and taxes to RMCD, what is the process for requesting drawback from Customs?
Duty and Tax Drawback must be done by the importer and SF Global Express does not perform the drawback process.
Q17: How will SF Global Express assist on the drawback process?
SF Global Express is only able to assist for the Duty and Tax Calculation and provide that information to importer if they wish to perform a duty drawback.
In reference to Free Zone Act 1990 “Free Zone” means any part of Malaysia declared to a Free Commercial Zone or a Free Industrial Zone.
A Free Zone is designated area to perform commercial activities that include trading (excluding retail trade), breaking bulk, grading, repacking, relabelling and transit.
A Free Zone is a gazette area meant for manufacturing activities.
Q18: What is the treatment for shipments entering Free Zones?
Payment of duties and taxes for goods brought into or placed in the Free Zones are not required. However, a declaration of entrance and exit must be performed by the importer appointed clearance agents.
Q19: What are the documents needed for SF Global Express to perform the declaration related to Free Zones?
Documents required: Complete Set of Invoice, Waybill Number and any related exemption if applicable.
Q20: Will SF Global Express keep all records of the shipment movement?
It is the responsibility of the companies that are situated in the Free Zones to have a document control process with regards to shipment movement. SF Global Express will only provide the copy of the Invoice, Waybill and the Declaration Form to the companies during shipment delivery.
Q21: What is the declaration needed for shipment entering Free Zone?
Overseas Import into FZ
Domestic FZ to FZ
Declaration is not done by SF
PCA to FZ
FZ to PCA
FZ to Bonded Warehouse
FZ to LMW
LMW to FZ
FZ to Overseas
Licensed Manufacturing Warehouse is established under the provision of section 65/65A of the Customs Act 1967. An LMW is granted to any person for warehousing and manufacturing approved products on the same premise. It is primarily intended to cater for export-oriented industries.
Q22: What is the treatment for shipments entering LMW?
Customs duty exemption is given to all raw materials and components used directly in the manufacturing process of approved produce from the initial stage of manufacturing until the finished product is finally packed ready for export.
Q23: What is the responsibility of the LMW holder when importing using SF Global Express?
The LMW holder must provide SF Global Express with the below documents prior to importation
• LMW License
• LMW Exemption List and Approval
Q24: What are the approvals given for shipments entering LMW without payment of duties and taxes?
The approval is given by the Industrial Department of RMCD for importation of raw materials, packaging, machinery and tools as well as return shipments due to various reasons.
Q25: What is the declaration needed for shipment entering LMW?
Overseas Import into LMW
Domestic into LMW
Declaration is not done by SF
LMW to PCA (Domestic)
Declaration is not done by SF
LMW to Bonded Warehouse
FZ to LMW
LMW to FZ
LMW to Overseas
Q26: Will SF Global Express keep all records of the shipment movement?
It is the responsibility of the companies that are situated in the LMW to have a document control process with regards to shipment movement. SF Global Express will only provide the copy of the Invoice, Waybill and the Declaration Form to the companies during shipment delivery.
Temporary Import is a facility for the temporary importation of goods without payment of customs duty/tax with a security being given to the satisfaction of the Director General of Customs and with a view to subsequent re-exportation in consistent with the provision of Section 97 Customs Act 1967. Temporary Import is stipulated with specific conditions set by RMCD.
A Carnet or ATA Carnet is an international customs and temporary export-import document. It is used to clear customs in 87 countries and territories without paying duties and import taxes on merchandise that will be re-exported within 12 months. Carnets are also known as Merchandise Passports or Passports for Goods.
Q27: What is the acceptable duration of a temporary import item?
Acceptable duration is 3months from the date of import. However, any extension (up to 12 months) needs to be applied prior to the deadline
Q28: What happens if the items are not re-exported back?
If any disposal or sale is done in the country, consent must be applied through RMCD.
In the event the items are not returned back within the approved period, the supposed duties and taxes must be paid at the importing station.
Q29: What is the process for shipments that are temporarily imported into Malaysia?
For items to be temporarily imported into Malaysia, the process must be initiated prior to importation. Failure to obtain the proper approval before doing so, will risk importers having to pay the duties and taxes for the importation
Q30: What are the required documents?
• Bank Guarantee Letter
• Temporary Import Approval from Customs
• Commercial Invoice
• Air Waybill
Q31: What is ATA Carnet?
ATA Carnet is an internationally recognized customs document which allows a shipment to move from one country to another tax and duty free. These shipments must return back to its origin country within 1 year of travelling. Items shipped may be Commercial Samples, Professional Equipment for Movies and Events or Goods for Fair and Exhibitions.
Q32: What is the difference between ATA Carnet and Temporary Import?
Temporary Import and Export is applicable from one country to one country. Whereas for ATA Carnet the goods may be travelling from various countries entering and exiting during the duration of the Carnet. Think Formula One Race Season, Concert Tours, Documentary Filming.
Q33: What is required for ATA Carnet Shipments?
The Carnet will be traveling together with the shipment. Upon entering a country, the customs officer will stamp on the counterfoil and remove a voucher from the set. The same process will need to be done for the goods exiting the country.
The shipment will require a physical inspection by customs.
Once inspection is done, the ATA Carnet counterfoil and remaining voucher (certificate sets) will be attached back to the shipment.
Q34: Will SF Global Express keep all records and documents of the shipment movement?
It is the responsibility of the companies (importers/exporters) to have a document control process with regards to shipment movement. SF Global Express will only provide the copy of the Invoice, Waybill and other supporting documents (if applicable such as declaration form or custom official receipt) to the companies during shipment delivery.
Q35: What are the documents required to be retained?
These is as per the Customs Guidance and Customs has the authority to seek for more documents
- Air Waybill
- Customs Official Receipt (where applicable)
- Customs Declaration Form
- Permits and Licenses (where applicable)
- Proof of Payment
Q36: How long is the document required to be kept by the importer/exporter?
Q37: How is the document kept?
Electronic copies are acceptable, however, during Customs audit, if there is any suspicion or potential fraud, a company must be able to retrieve original form of the documents. All data and document retention must be located in Malaysia and special approval from RMCD is needed for it to be kept overseas
Q38: Are there any duties and taxes imposed for exportation from Malaysia?
No, exportation of shipments does not attract duties or taxes or both. However, there is CESS payment chargeable for Rubber Products.
Q39: Are exporters allowed to ship ANY items to overseas?
Exporters need to be aware of customs regulation at the importing country in order to avoid clearance delay or worse confiscation of the item resulting into violation of the destination country’s law.
Before exporting out of Malaysia, exporters must be aware and read through the Customs (Prohibition of Export) Order 2017 to ensure that any items that require permit for export are being provided to SF Global Express upon pick up. Common items that are under Conditional Prohibition are but not limited to
- Any items into Israel
- Birds Nest
- Rubber, Palm Oil, Plant and Animal Products
What are the documents needed for export declaration from Malaysia?
Export declaration requires invoice and waybill or any permit if shipment item is mentioned in the Customs (Prohibition of Export) Order 2017
Q40: When will SF Global Express provide the Export Declaration to the Exporter?
SF Global Express will provide the declaration within 7 days after exportation. Under the Customs Act 1967 Sect 87A, a shipment moving via Air to outside of Malaysia is allowed to be declared within 7 days after exportation.
This however does not apply to shipments thru Johor via CIQ & 2nd Link and also Prohibited Items.
Q41: What are Strategic Trade Goods?
In Malaysia there is a law on Export Control which is referred to as Strategic Trade Act 2010. Under the Act, there is a list of items (STA Items) which requires a permit from Ministry of International Trade and Industry (MITI) prior to exportation. These items may be military items or items which are considered of dual use and may be used in the act of violence and terrorism.
Q42: Who is responsible to declare the STA items?
SF Global Express will be the one declaring to RMCD on the STA items based on the instruction of the exporter. The exporter is responsible to provide SF Global Express the permit issued by MITI in order for the items to be declared in the K2 form as STA shipment.
Q43: What is required from Exporter in order for the STA declaration process to be done accordingly?
Exporters must alert our Commercial or Customer Service team that the goods to be exported are governed under STA 2010.
The MITI permit, Invoice and Waybill must be provided upon pick up of the Item
The waybill filled up by the exporter must clearly state “STA Items” on the waybill
The shipment may have a delay of 1 day before uplift as the customs officer may require the shipments to be examined prior to export.
Q44: What is the implication of not declaring an STA item as required by the law?
There will be penalties imposed by RMCD if an STA item with a permit was not declared prior to uplift.
If there is no form of declaration by the exporter, MITI and RMCD have the rights to proceed with legal action towards the exporter for not complying.
Q45: What are Incoterms?
Incoterms is a short way of saying International Commercial Terms which is an agreement of trade tasks, risks and costs between the buyer and the seller.
Below link to Incoterm Guide will help you understand the responsibility between the seller and the buyer. Bear in mind that incoterms also has specific mode of transport that it covers and also Incoterms such as DDU is being replaced by a new term in compliance to Incoterm.
Click here – INCOTERMS 2020 TABLE
Q46: How does Incoterms affect Customs Clearance?
Incoterms stated in the invoice is used for Customs Valuation Purposes. For importation into Malaysia, Cost Insurance and Freight (CIF) is being used.
Q47: Why are customers using FOB Incoterms even though shipment is by Air?
Some customers may not have in depth knowledge of Incoterms or in certain situation the shipment is to be shipped by sea however due to urgency the mode of transportation is change at the last minute. FOB value is referred to by customs as the value agreed between buyer and seller as per item value stated in the invoice. This means that the value of Insurance and Freight has to be added in to determine the Customs Value.
If the shipping cost or freight value is stated in the invoice, will customs amend the value?
There is a possibility of above happening if the IATA TACT Rate value is higher than the stated freight value or the shipping cost stated is too low.
Q48: What is an IATA TACT Rate?
IATA TACT Rate is an annual shipping rates extracted from IATA TACT website to determine the shipping value based on the origin and weight of the shipment. This rate is agreed annually between Customs and the Express Companies in Malaysia in reference to the IATA TACT website. The rate table is updated at the back end of our DCE system and may only be shared to customers upon request.
Q49: How is the Customs Value being determined in Malaysia?
Customs valuation is a customs procedure applied to determine the customs value of imported goods. Customs Value is determined using the Customs Valuation where transaction value (TV) is used. Transaction Value is to be based on the actual price of the goods to be valued, which is generally shown on the invoice. Malaysia uses CIF term to determine the Customs Value. Therefore, the invoice value stated may have additional costs. The Customs Value is then used to determine the duties and tax calculation.
Q50: How do we calculate the customs value for a shipment?
CIF VALUE = Total of Below [C+I+F]
C = Cost/Value in Invoice
I = Insurance
F = Freight as per IATA TACT Rate
Q51: How do we calculate the customs duties and tax for a shipment?
IMPORT DUTY = CIF VALUE x IMPORT DUTY RATES
EXCISE DUTY = [CIF VALUE + IMPORT DUTY] x EXCISE DUTY RATES
SALES TAX = [CIF VALUE+IMPORT DUTY+EXCISE DUTY] x SALES TAX RATES
Q52: What is Classification of Goods and how does it impact Customs Clearance?
Shipments that go through cross border trading are required to be classified based on their product. The Harmonized System (HS) Code at a 6-digit level is developed and maintained by World Customs Organization (WCO). It is then used to classify the products that are being imported or exported.
The HS Codes is then used to determine the duties and tax rates, control and restrictions as well as any rules of origin applicable to the country.
Q53: How does SF Global Express perform classification of goods?
SF Global Express will refer to the invoice provided for HS Code classification by the shipper. If there is no classification done, SF Global Express will use the Malaysian Customs Duties Order to classify the items in the shipment to the best of our knowledge. SF Global Express will classify the shipments using a 10-digit HS Code based on the Customs Duties Order 2017.