Sri Lanka to amend archaic customs law to enable paperless trade

• Sections 47 and 57 of Customs Ordinance to be amended
• Customs in talks with trade unions for further amendments 
• Sri Lanka Customs Ordinance, one of the oldest in the world, was enacted in 1869

By Nishel Fernando

Sri Lanka is to amend the archaic customs law shortly to facilitate paperless trade and pre-arrival clearances at the Customs, Sri Lanka Customs Director General and National Trade Facilitation Committee Chairman P.S.M. Charles said.

Addressing the inaugural session of the International Trade Centre’s (ITC) second public-private consultation on Sri Lanka’s National Single Window, last week, Charles said the Sri Lanka Customs has submitted a draft document to amend the 47 and 57 Sections of the Customs Ordinance, the law governing the Customs, to enable facilitation of paperless trade and pre-arrival clearances. 

She was confident that the Cabinet of Ministers would approve the proposed amendments to the Customs Ordinance and they would be given green light by parliament “very soon”. 

Sri Lanka’s Custom Ordinance, which was enacted in 1869, has been amended over time and is considered one of the oldest customs laws in the world.

Finance Minister Mangala Samaraweera last year termed the Custom Ordinance “a complex and yet archaic law that has not kept up with the developments of modern global trade” and called for an overhaul of the same.

According to the Sri Lanka Customs officials, there are a number of amendments, which are due under the commitments Sri Lanka made to the World Trade Organisation in implementing the Trade Facilitation Agreement (TFA). The TFA came into force in February 2017. 

Speaking to Mirror Business, a Customs official noted that they have submitted the draft document to amend Section 47 and 57 of the Customs Ordinance almost two months ago to the Finance and Mass Media Ministry.

He noted that the Sri Lanka Customs administration is currently holding discussions with the trade unions on how to proceed with other amendments to meet the TFA commitments. 

The official said though there are no objections from the trade unions in amending the customs law to meet the TFA commitments, they have voiced oppositions to any changes to the rewarding scheme under the existing Customs Ordinance.

Speaking of the possibility of replacing the archaic law with a completely new act, the official pointed out that unnecessary changes could impact the government. “We have met the government’s revenue targets due to the powerful Custom Ordinance,” he noted.  

Meanwhile, Charles requested the support of the trade unions for the implementation of the online processes at the Sri Lanka Customs.

She said the Sri Lanka Customs has received a grant from the European Union to improve the efficiency of services. The ITC has been selected to manage the fund and Charles said that workshops and capacity-building events would be carried out with the support of the World Customs Organisation, particularly in the field of risk management and post-clearance audit.

Following the Wold Bank recommendations, the Sri Lanka Customs recently amalgamated the Risk Management Directorate under the Central Intelligence Unit of the agency, on par with other countries, in order to improve the efficiency of control measures. 

Sri Lanka Customs is also in the process of modernising its outdated Post-Audit Unit to facilitate trade.  Meanwhile, the Sri Lanka Information Trade Portal is on route to be launched on July 5, 2018, as 80 percent of information of various government agencies is already uploaded to the system. The portal is expected to streamline trade while improving transparency.

The blueprint of the National Single Window is scheduled to be launched by end-July this year and is scheduled to be in operation by 2019.