Deputy Minister of Finance and Planning Anil Jayantha stated that legal provisions are currently being drafted to hold individuals criminally liable in order to prevent financial fraud related to import and export transactions.
Speaking during the parliamentary debate yesterday (23), the Deputy Minister said that due to loopholes in the existing Foreign Exchange Act, such financial frauds are currently treated only as civil offences.
“Under the existing law, the penalty for such fraud is merely a fine imposed by the Central Bank. Paying a fine is not difficult for individuals who engage in systematic dollar fraud. Therefore, the present government is taking steps to introduce new regulations,” Deputy Minister Anil Jayantha said.
He further stated that a Cabinet paper would be submitted to classify such illegal activities as criminal offences in order to address the issue.
Large-scale financial frauds have been uncovered through three investigation reports conducted by law enforcement agencies, including the Criminal Investigation Department (CID).
Under the current system, importers are permitted to make advance payments to facilitate transactions before obtaining customs clearance.
Accordingly, a grace period is provided for goods to be imported into Sri Lanka: up to 180 days for general industrial goods, 360 days for certain specialised goods, and up to 730 days for long-term requirements such as the manufacture of industrial equipment.
However, investigations have revealed that this facility has been misused by remitting US dollars overseas without importing the relevant goods into the country.
Anil Jayantha said the government plans to introduce several key measures to prevent such practices.
He noted that steps are being taken to integrate the systems of the Central Bank of Sri Lanka, commercial banks, Sri Lanka Customs, and the Department of the Registrar of Companies while addressing existing issues.
Arrangements have also been made to introduce regulations requiring bankers to register with the Customs Department when conducting relevant financial transactions.
In addition, the Deputy Minister revealed that a racket involving the illegal export of goods through the misuse of customs codes is currently in operation.
He specifically stated that non-exportable metals and similar materials are being altered and exported under false customs codes by disguising them as other items.
Pointing out that such practices cause significant injustice to legitimate businesses and taxpayers, Anil Jayantha said the proposed laws would help curb illegal exports while taking maximum measures to strengthen local industries.
