Customs Seizures and Compounds in Malaysia: Claiming Your Goods and Responding to Customs
When the Royal Malaysian Customs Department seizes goods, a vehicle or documents, or offers to compound an offence, the time to respond is short. Where there is no prosecution, seized goods are deemed forfeited one month after the seizure unless a written claim is made within that month (section 128, Customs Act 1967), and a compound offer is open only for a limited period.
NZSK advises importers, exporters, logistics companies, retailers and individuals on seizures, written claims for the return of goods, compound offers and statements to Customs officers, and acts in court where charges are brought. We advise after reviewing the seizure notice and your documents at a consultation.
Key Deadlines
30 Days
To appeal an LHDN assessment on Form Q
30 Days
For a Customs review or Tribunal appeal
1 Month
To claim goods seized by Customs
5 Years
Usual LHDN look-back for additional assessments
Why does Customs seize goods?
Customs officers can seize goods, conveyances and documents they believe are liable to forfeiture or are evidence of an offence under the Customs Act 1967 and the other laws Customs enforces. Common triggers include:
- goods not declared, or declared with the wrong tariff code, value, quantity or origin;
- prohibited or restricted goods imported without the required permit or licence;
- dutiable goods on which duty or tax has not been paid, including goods moved out of a licensed warehouse or free zone without clearance; and
- suspected smuggling or false documents.
You should be given a notice of seizure. Keep it, note the date, and do not sign anything you do not understand.
How do you claim seized goods back?
Where there is no prosecution, seized goods are deemed forfeited at the end of one month from the date of seizure unless a written claim is made within that month by the owner, or a person asserting ownership (section 128). The claim should identify the goods and the seizure, explain the basis of ownership and attach the supporting documents: invoices, permits, declarations and proof of payment.
In Sarmiina Sdn Bhd (Federal Court, 2023), the court held that an agent appointed by the owner can make the claim. Once a valid written claim is made, Customs must either release the goods or refer the claim to a Magistrate for decision; it cannot simply keep them.
What is a Customs compound, and should you accept it?
A compound is an offer by Customs to accept a sum of money instead of prosecuting an offence. Prescribed offences can be compounded under section 131 of the Customs Act 1967, in some cases with the Public Prosecutor’s written consent, and an offer is usually open for 14 days unless extended. Once a compound is paid, there is no prosecution for that offence.
Before paying, check what the offer covers, whether the goods will be released, whether a separate bill of demand for duty or tax will follow, and how the record may affect future permits or licences. Compound matters cannot be appealed to the Customs Appeal Tribunal.
What if Customs asks you to give a statement?
Customs officers investigating an offence can require people to attend and give a statement, and can inspect and take documents. A statement is recorded in writing and may be used in court later. Before attending, know which shipments and documents are in question, answer accurately, and read the statement carefully before signing it. Directors, managers and employees can be investigated alongside the company. If you are told you are a suspect, take advice before the statement is recorded.
What penalties apply if Customs prosecutes?
Customs Act penalties were raised substantially from 2019. An incorrect declaration or false document under section 133 carries a fine of up to RM500,000, imprisonment of up to seven years, or both. Smuggling and evasion of duty under section 135 carry fines calculated as multiples of the duty involved, with minimum amounts, and imprisonment. Where a charge is possible, handle the seizure claim, any compound and any statement as one strategy, because each affects the others.
How NZSK handles Customs seizure and compound matters
Bring the notice of seizure with its date, any compound offer, the customs declarations, invoices, packing lists, bills of lading or airway bills, permits and licences, and your correspondence with Customs and your forwarder. We check the one-month claim period first, prepare and lodge the written claim, advise on any compound, prepare you for a statement, and act in proceedings before a Magistrate or in a prosecution. Fees depend on the value of the goods, the number of shipments and whether court proceedings follow; we give a fee quotation after the consultation.
Frequently Asked Questions
Speak to a Tax & Customs Lawyer Now!
- (+60)12-401 4799 | (+60)3-8060 0267
- [email protected]
Consultation by appointment — Mont Kiara, Kuala Lumpur & Puchong, Selangor
