False declarations and manipulated fuel documents can lead to heavy fines and jail under the Customs Act 1967, cautioned Admiralty and Maritime lawyer Datuk J. Shamesh.
KUALA LUMPUR: False declarations, manipulated documents, or undocumented fuel movements could expose companies and individuals to severe penalties under the Customs Act 1967, cautioned Admiralty and Maritime lawyer Datuk J. Shamesh.
He was commenting on recent concerns raised by an industry player regarding revenue leakage and documentation gaps in Malaysia’s petroleum supply chain.
He highlighted that several provisions under the Act could apply, including Section 133, which covers false declarations, inaccurate statements and the submission of incorrect particulars, with penalties of up to RM500,000 in fines, seven years’ imprisonment, or both.
“In addition, Section 135 deals with the fraudulent evasion of customs duties or prohibition controls, while Section 138 concerns offences linked to the creation or use of false documents.
“Section 147 extends liability to agents, employees or company officers in cases where offences are committed by corporations,” he said, adding that those found liable face varying fines and imprisonment.
Shamesh added that irregularities involving subsidised fuel, excise duties, or sales tax liabilities could also be subject to scrutiny under other relevant legislation, depending on the specific circumstances.
Regulators would typically determine whether discrepancies arose from operational issues or deliberate misconduct by examining the frequency and pattern of inconsistencies, he explained.
“This includes determining whether the discrepancies repeatedly resulted in reduced revenue exposure, reviewing the integrity of operational records and audit trails, identifying unexplained stock gains or losses, and assessing whether there is evidence of concealment or falsification.
“Minor isolated variances can occur due to legitimate operational factors such as temperature adjustments, meter tolerances or tank calibration differences.
“However, recurring inconsistencies, unexplained blending activities, manipulated density readings or discrepancies unsupported by proper contemporaneous records may point towards possible revenue leakage or fraudulent declarations,” he emphasised.
Shamesh noted that effective regulatory reforms could include mandatory real-time inventory reconciliation, tighter licensing controls over bonded petroleum facilities, enhanced independent calibration and verification requirements, periodic forensic stock audits, and stronger inter-agency coordination between customs, maritime, tax and energy regulators.
He said such reforms should focus on risk-based enforcement and targeted transparency measures, without unnecessarily disrupting legitimate industry operations or fuel supply chains.
