With the lifting of vehicle import restrictions, over 300 vehicles are reportedly stuck at ports as vehicle importers are unable to release them due to alleged violations of import control regulations.

Speaking to The Sunday Morning yesterday (12), Vehicle Importers’ Association of Sri Lanka (VIASL) President Prasad Manage said that a Customs implementation of a 2013 regulation had led to the blockage.

“This gazette had not been in use for 12 years. The matter has risen due to the opening of crossborder Letters of Credit (LCs) in hubs through which we import vehicles,” he said.

He explained that vehicles that were imported from either Japan or Australia were imported to the country through suppliers based off Dubai or Singapore where the LCs were opened.

The importers have written to the Ministry of Finance asking for a response and resolution to their problem. 

If the issue is not resolved by the next two weeks, Manage said that they would look into taking legal action.

“A total of 300 vehicles are stuck at the port and there are 200 more on the way,” he added.

However, Sri Lanka Customs Additional Director General Seevali Arukgoda said that the importers had violated import control regulations in importing vehicles to the country.

“Due to the violation, we have no way to release the vehicles and the responsibility lies with the importers,” Arukgoda said. 

Explaining that there had been no revenue impact during the last five years due to the import restrictions, he said that the new staff had re-looked at the regulations as imports were reopening.

“The new staff noticed the regulations when we were re-looking into the regulations, so from the day we noticed it, we began implementation. It is the importers’ responsibility to know the law.”

He charged that the practice of opening LCs through a third country like Dubai or Singapore was generally done to undervalue the vehicle.

According to the regulation, used vehicles should be de-registered and the de-registration certificate should be signed by a bank of the country of the vehicle.

“In countries like Japan, banks do not sign this certificate as the value they claim is lower than the value at which it was purchased,” said Arukgoda.

During importation, vehicles are taxed for two aspects – their engine capacity and Cost, Insurance, and Freight (CIF) value. The value of the vehicle impacts the amount of tax to be paid during importation.

Attempts to contact Deputy Minister of Economic Development Dr. Anil Jayantha Fernando and Ministry of Finance Secretary Dr. Harshana Suriyapperuma for comment proved futile.