KUALA LUMPUR: THE local term kawtim loosely translated as ‘settle’ in Cantonese, is a word widely abused among errant enforcement officers manning the country’s borders.
The colloquial term has a negative connotation as it refers to the act of solving a dispute through corrupt practices, one of the main reasons identified for the rampant smuggling of contraband cigarettes into the country.
The flow of illegal tobacco in our country uncurbed has reached a critical level, where 60 per cent of cigarettes sold in the market are contraband.
This means that six out of 10 cigarette packs sold are from illegal brands.
Syndicates dealing with supplying contraband cigarettes have become more brazen, offering bribes and buying the integrity of irresponsible enforcement officers to cover up their trail.
While not all enforcement officers or personnel can be bought, these illegal cigarette cartels are willing to exhaust every avenue, including leveraging threats, to influence these quarters to work with them.
Over the years, illicit cigarettes cartels have become more aggressive and have devised new modus operandi to bribe enforcement officers. Some even go to the extreme by stationing “tonto” (thugs) at the enforcement agency’s headquarters to ensure that their continuous supply of contraband to the black market is not disrupted.
The huge profits reaped by these cartels have ensured that they have no problem hiring lawyers to represent them in court and settle fines if they are caught smuggling the contraband.
It is estimated that these syndicates have raked up to about RM5 billion in income from dealings in illegal cigarettes, while the government is losingRM2 billion in unpaid duties from these smuggling activities annually.
If there are no measures put in place to plug the loopholes from cigarette smuggling and to curtail the black economy, the government will continue to incur more losses in revenue, which could be used to fund development programmes for the rakyat.
Government agencies directly dealing with enforcement, collection of duties and tax, such as the Customs Department, police, marine police, Malaysian Border Security Agency, Health Ministry and Malaysian Maritime Enforcement Agency, are the most susceptible to corruption.
The corruption menace is the main factor contributing to the flood of illegal cigarettes into our market.
Transparency International Malaysia (TI-M) president Datuk Akhbar Satar said it was imperative for the government to take the lead and have an overview of the matter by forming a special committee to tackle the problem.
A joint task force should be set up, comprising stakeholders from the related ministries, law enforcement agencies and policy makers, to tackle this issue decisively.
Akhbar believed that the kawtim culture and other corrupt practices beleaguering enforcement agencies, including the Customs Department, could be addressed by improving their standard operating procedure.
“It is imperative for the department to conduct frequent transfers of officers posted at places with high corruption risks to improve integrity and competency among their men,” he said.
He also proposed for new intakes and current staff to undergo pre-screening as preventive measures to ensure the department was clean from any act of corruption.
According to a survey conducted by the Association of Certified Fraud Examiners, he said organisations around the world lost an estimated five per cent of their annual revenues to fraud.
“Hence, it is imperative for an organisation to formulate stricter domestic control policies in order to plug loopholes and reduce fraud.”
“TI-M also wants to propose the Customs Department to consider forming a special squad tasked with curbing smuggling of tobacco and liquor,” he said.
Akhbar also proposed for the government to amend the law for a more deterrent punishment against those convicted of smuggling contraband.
“Amend the law and include mandatory imprisonment for those convicted of smuggling activities,” he said.
Programmes to create awareness and remind the public of the perils of corruption and smuggling of counterfeit cigarettes into the country, he said, were also equally important.
Those found guilty of bribing enforcement officers could be liable to a fine and a maximum of 20 years’ jail upon conviction under Section 17B of the Malaysian Anti Corruption Commission Act 2009.
He said there was also a need to improve facilities at all entry and exit points in Rantau Panjang, Bukit Kayu Hitam and Padang Besar as good work conditions would increase employee productivity.
“We also want to propose for the government to upgrade facilities at Customs, Immigration and Quarantine Complexes with advanced equipment, such as scanners, in Penang and Johor Baru ports,” he said.
“It has been reported that the department lost about RM2 billion every year to smuggling of cigarettes and this problem may be caused by the lack of advanced scanners and poor maintenance,” he said.
Tax stamps can be ‘kawtim’
SYNDICATES dealing with smuggling contraband cigarettes usually have “insiders” within an enforcement agency to ensure they could operate without being detected by the authorities.
With really no holds barred when it comes to the depths of bribery and corruption, some syndicates are even purchasing official tax stamps to help mask their contraband products.
The Harian Metro Special Squad was told that the syndicates would kawtim (settle) or bribe officers and heads of the units as inducement for the latter to turn a blind eye to their smuggling activities.
These “settlements” are bribes amounting to hundreds of thousands of ringgit, supplied to errant enforcement officers every month throughout their business operation.
Errant enforcement officers will continue enjoying their “supplementary” income when they are transferred to other states or upon retirement as the syndicates continuously hand out the bribes to them.
Payout amounts vary based on ranks and seniority of the agents and are often remitted by cash or deposited into their bank accounts.
Not stopping at cash incentives, cartels offer additional “perks” or “entertainment packages” to enforcement officers, which included sponsored trips to Hatyai or Danok in Thailand, where alcoholic beverages, karaoke sessions and even women are provided.
In return, these officers are expected to turn a blind eye to the cartel’s activity at key border crossings and tip them off when an enforcement operation is about to take place.
Shockingly, some errant officers are willing to sell cigarette tax stamps stickers for RM1 each.
There are 3,000 stickers in every reel of tax revenue stickers, and these cartels have no qualms inbuying more than one reel at one go.
These revenue tax stamp stickers can only be issued by the Customs Department to signify that the duty for the cigarette has been paid.
Hence, integrated and concerted efforts involving the Customs Department and other enforcement agencies are needed to plug loopholes and leakages that have resulted in illegal cigarettes flooding up to 60 per cent of the local market.
The biggest concern is when will the new government under Pakatan Harapan take decisive action and come up with measures to curb smuggling activities that continue to spur the “underground” economy.
If left unchecked, this illicit activity could jeopardise not just the country’s economy but also its security and reputation.