Duty-free cigarettes and alcoholic drinks are being smuggled out of Malaysia’s Forest City by “agents”, according to a New Straits Times (NST) report published on Jan 5.

Located in Johor, the zone enjoys duty-free status, but these duty-free items must be consumed within Forest City. Items taken out of the area are subjected to taxes.

Spanning about 30 sq km, Forest City is a mixed-use area (for living and working) launched under China’s Belt and Road Initiative with a company partly owned by Johor’s Sultan. The development is within driving distance of Singapore. 

For a smuggling fee, “agents” touted to take duty-free purchases out of the city for “customers”, reported media outlet NST.

The smuggling fee was at least RM25 (S$7) per crate of beer (24 cans in each crate), while different charges apply to liquor and cigarettes.

A crate of Tiger beer can be bought for RM74.30 at a Forest City duty-free store. The same purchase may cost RM143.90 in other parts of Malaysia.

Under the law, there is a limit on the amount of cigarettes and alcoholic drinks that people may buy at duty-free costs.

When an NST reporter visited a duty-free complex (that has more than 10 duty-free shops), he was approached by a man touting “smuggling services”.

“If I take out 30 crates at a time, I would be charged for just one or two to meet the tax quota. But otherwise, I can just drive through,” the man was quoted as saying.

The reporter declined the offer, but noted the man’s contact details.

The reporter also observed that people can drive duty-free purchases out using their own vehicles, even without the help of smugglers.

Upon entering Forest City’s duty-free complex, the reporter was told by a Customs officer that duty-free cigarettes and alcoholic drinks must be consumed within Forest City.

However, when the reporter left the duty-free complex about three hours later, there was no Customs officer in sight, just “a security guard who waved the reporter’s car through with barely a glance”, according to NST.