The customs department last week released 40,000 jute sacks after concluding the bags had not been smuggled into Cambodia, a customs official said Sunday.
The official, speaking on condition of anonymity, said officials interviewed workers at the Battambang factory operated by Anglo Cambodian Holding and residents living nearby and decided the factory was the source of the bags, which are made from the fiber of jute plants.
Customs officials seized the sacks in mid-November while the bags being transported through Phnom Penh to a customer.
Customs Director In Saroeun said authorities were tipped off by an anonymous letter that accused the company of smuggling the bags from Thailand. But the director of the British firm said the sacks were manufactured earlier this year and been kept until a buyer could be found.