In response to COVID-19’s impact on the economy, Sri Lanka has imposed restrictions to curb imports since March 2020 with the policy goal of conserving gross official reserves and strengthening the Sri Lankan Rupee. This brief compiled by the Ceylon Chamber of Commerce (CCC) and the USAID Partnership for Accelerating Results in Trade, National Expenditure and Revenue (PARTNER) Activity aims to provide clarity and awareness on the changes in the latest Import and Export (Control) Regulation gazettes published in July and August in comparison to those published in April, May and June[1] 2020. The gazettes are listed below:
Gazette Number and Date |
No. 2171/05 of 16 April 2020 |
No. 2176/19 of 22 May 2020 |
No. 2182/10 of 30 June 2020 |
No. 2184/21 of 16 July 2020 |
No. 2189/04 of 18 August 2020 |
Validity Period |
16th April to 21st May[10] |
22nd May to 16th July[11] |
30th June to 16th July[12] |
17th July[13] to an indefinite period |
18th August[14] to an indefinite period |
Key Changes to the Schedules |
Included only TS and C schedules |
III (ICL) and IV (B)[16]
|
Made amendments to all four schedules (TS, C, ICL and B) of the May Gazette |
Repealed schedule I and II of May and June Gazette and, introduced a final list of schedule I and II
|
Further amendments were made to schedule III (ICL) and IV (B) of the May and June gazettes |
The June Gazette made amendments to the TIEP scheme particularly addressing concerns of indirect exporters and giving more clarity to the scheme introduced in May (as mentioned above). These amendments were continued in the July Gazette as well. Key details are highlighted below:
While the May Gazette made no provisions for advance payments, the June Gazette looked to address this by providing some leniency if an advance payment was made[19]. The July Gazette took a more comprehensive approach by giving leniency to the traders who have made an advance payment prior to the effective date of all regulations published (as given below):
The above rules also apply to the Banking Act Directions No 1 of 2020 dated 19 March 2020 of CBSL if the above specified amounts under schedule I and II have been paid under the Advance Payment method on or before 18 March 2020.
However, for certain Agricultural items (specific HS codes given in July Gazette) in schedule I targeting the local market, an advance payment of 80% or more had to be made on or before 21 May 2020.
Both June and July Gazettes allocated the below mentioned provisions in order to provide more leniency to Projects approved under Section 17 of the BOI.
The May Gazette allowed importation when an imported item under schedule I cannot be sourced locally provided that a 35% domestic value addition is achieved with a credit facility of 30-60 days. The June Gazette extended this to both schedule I and II with a credit facility of 30 days and limited it for goods targeting the local market. July Gazette too continued this regulation with an additional requirement of obtaining the recommendation from the Ministry of Industries to clear items, in addition to the previous requirements of 35% domestic value addition and a 30-day credit facility for items in schedule I and II. Agricultural products (specific HS codes given) have to get the recommendation from Department of Agriculture.
[1] Another direction was issued to restrict imports by the Central Bank of Sri Lanka (CBSL) in March namely; Banking Act Directions No. 1 of 2020 dated 19 March 2020 of CBSL
[2] Refers to the Gazette Extraordinary No.2189/04 dated 18 August 2020 unless specified otherwise
[3] Importation of goods temporary suspended under payment terms 3(1)(a), 3(1)(b), and 3(1)(c), of the Imports and Exports (Control) Regulations No. 1 of 2011 published in the Gazette Extraordinary No. 1739/3 dated 2 January 2012
[4] Importation of goods can only be done with the Credit facility of either 90-days or 180-days as assigned in the Gazette
[5] Importation of goods will be on an Import Control License
[6] Importation of goods is banned from any country
[7] Amendments included additions and suspension of the issuance of licenses for an indefinite period.
[8] Amendments included additions and removals
[9] Included a provision where Banks will not proceed any payments relating to importation of goods under ICL schedule without an import control license.
[10] Effective for importation of goods which are loaded until 21st May 2020
[11] Effective for importation of goods which are loaded until 16th July 2020 for regulations pertaining to TS and C
[12] Effective for importation of goods which are loaded until 16th July 2020 for regulations pertaining to TS and C
[13] Effective for importation of goods which are loaded on or after 17th July 2020
[14] Effective for importation of goods which are loaded on or after 18th August 2020
[15] Specified regulations pertaining to TS and C
[16] It made changes to the Special Import License Regulations published in the Gazette (Extraordinary) No. 2044/40 dated November 2017
[17] shall mean a person who abides recommendation of BOI or EDB or registered under TIEP scheme to import goods for the purpose of processing direct exports or for the purpose of processing and supplying to another exporter
[18] Refers to the Imports and Exports (Control) Regulations No. 06 of 2020 published in the Gazette Extraordinary No. 2189/05 dated 18 August 2020
[19] Items in schedule I of April Gazette required a 90-day credit facility if an advance payment of 20% or more on or before 17th April and shipped on or before 21st May. Schedule II of May Gazette had no restrictions if an advance payment of 80% or more was made on or before 21st May.
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