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Scrap bank guarantees for imports: Chamber
Published on: Saturday, June 23, 2018

Labuan: The Labuan Chinese Chamber of Commerce (LCCC) has appealed to new Finance Minister Lim Guan Eng to abolish the requirement to deposit huge amounts in bank guarantees for the import of liquor, beer and cigarettes into Labuan.

LCCC Chairman Datuk Wong Kii Yii said such requirement only benefits the banks and affects the working capital of the importers.

"The required guarantee is at times as high as RM3 million and the bank only issues the document to the importer when he has committed his assets, properties or fixed deposits as collateral.

"This resulted in the working capital available for the company to be reduced and therefore undermines its financial capability to expend or invest in other business in Labuan," he said.

He said the requirement also means additional business cost, thus causing the prices to escalate and finally being borne by the consumers.

"The requirement serves no purpose. If it is to contain smuggling, there are already sufficient laws under the Customs Act to penalise those involved."

Wong said the Government should ensure the prices of duty-free items such as liquor, beer and cigarettes remain much cheaper than in mainland at all times.

"Failure to do so will render the island unattractive to visitors. "Labuan needs tourism for economic survival, especially now with about a 40 per cent drop in all sectors of local business due to the slump in the oil and gas domain," said Wong.

He hoped the new government would relook and review some of the unnecessary requirements imposed on Labuan by the previous government.

The stiffer rules and curbs came into force here following recalibration of the Budget 2016.

Despite heavy objections from here, the Finance Ministry went ahead with the rules and curbs.

Apart from bank guarantees, curbs were introduced on the sales of liquor, beer and cigarettes.

Under the rules, Kedai Bebas Chukai 1 (KBC 1) are allowed to sell the items but needs to ensure that an individual is allowed to purchase no more than three litres of liquor, five crates of beer and three reams of cigarettes (3-5-3) per month.

And these KBC 1 shops have to record the sales on a computer and Customs officers are stationed at each shop to monitor. But after a few months of vigorous action, now the shop operators do all the work for the Customs Department, with no Customs officials seen in the premises.

"If you cannot enforce your regulations, why not withdraw them?" a regular visitor to the island asked the Customs Department. - Sohan Das

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