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IMPORT
POLICY, REGULATIONS AND PROCEDURES
General
Previously, Sri Lanka pursued a policy of import substitution which
relied upon stringent licensing Procedures as part of widespread
Government Regulation of the economy. Since 1977 there has been a change
in political direction and economic policy. A programme of
liberalization was instituted which centred on the deregulation of trade
in order to encourage development of an exchange economy. Import
controls were overhauled and the number of items subject to restrictions
was first reduced to 360 in 1977. Thereafter, items have been subject to
licensing or un licensing from time to time. There are now 209 items
subject to licensing.
Import regulations
derive their authority from the Imports and Exports (Control) Act, No. 1
of 1969 and are issued by the Ministry of Trade and Shipping. The
primary regulation is usually referred to as “Special Import Licence (SIL)
No. 1 of 1977”.
Import Approval
Import regulations are administered by the Department of Import and
Export Control and approval for items requiring licences rests
ultimately with the Department’s Controller. To obtain a licence, importers
should apply for an indent form in triplicate and three copies of the
pro-forma invoice.
Generally, it is
required that imports be negotiated against a Letter of Credit (L/C) for
shipment within six months. Imports into an Export Processing Zone (EPZ)
are exempt from this L/C requirement. Export-oriented projects may use
Documents against Acceptance (D/A) terms under which the supplier
usually gives three months credit, subject to prior approval from the
Exchange Control Department.
Those allowed to import
in commercial quantities are restricted to the following four
categories: sole traders who are Sri Lanka citizens; firms or on piece
goods. Special regulations apply to dairy products.
Those allowed to import
in Commercial quantities are restricted to the following four
categories: sole traders who are Sri Lanka citizens; firms or
partnerships wholly owned locally; public companies incorporated in Sri
Lanka with local majority ownership and control: and registered
importers and industrialists.
Inspection
Eight product items were brought under mandatory quality inspection on 1
June 1986 by a measure that applies to both locally manufactured and
imported products of the kinds stipulated. To enforce the directions for
imports and local trade, the Sri Lanka Standards Institution has
initiated a scheme of sampling and inspection at the wharf, jointly with
Customs officials.
Licensing, Quotas
and prohibitions
A number of imported items still require licenses. The items come
under four main groupings: firearms, explosives an chemicals having
health and security implications; agricultural goods such as rice,
wheat, potatoes, bombay onions, masoor dhal and dried chillies handled
by government agencies; manufacture goods produced by protected
industries and luxury commodity goods such as Jewellery, cameras and
motor vehicles.
TARIFF SCHEDULE
General
An important part of the Government’s trade liberalization policy has
been ration rationalization of the tariff structure.
When the Presidential
Tariff Commission (PTC) was established in 1980, existing levels of
protection were reviewed and changed for over 2,000 tariffs. Duties had
previously ranges from zero for some foodstuffs to 500 per cent on
luxury items. This range of duties was replaced by a series of tariff
bands which lowered many duties and raised others, so as to minimize the
economic cost of protecting established domestic industries, while
maintaining important sources of government revenue.
Customs Duties
Goods are subject to specific duties on a weight basis. Dutiable
weight is calculated by gross or net weight and deducting a tare
allowance for the container.
Taxes And Surcharges
When imports have a customs duty of 50 per cent or more they are
then liable for a surcharge of 10 per cent. This is known as the “EDB
Cess” which funds the activities of the Export Development Board.
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