Sri Lanka’s decision to reopen motor vehicle imports after a prolonged suspension has been framed largely as an economic and fiscal recalibration.
The new framework, introduced through updated import control regulations, seeks to manage foreign exchange exposure while restoring access to private transport. Yet as imports resume, questions are emerging within the industry over whether the regulatory system adequately addresses vehicle quality, traceability, and post-sale responsibility.
Vehicle imports are being conducted through multiple channels, including registered dealers and individual buyers. While both routes are legally permitted under the current framework, industry stakeholders note that responsibility structures associated with these channels differ notably, particularly in areas such as recall management, quality assurance, and after-sales accountability.
Regulatory framework governing vehicle imports
The current regime is governed by the Imports and Exports (Control) Regulations No.1 of 2025, published under Gazette Extraordinary No.2421/04 dated 27 January 2025. The regulations were introduced following a Cabinet decision to remove the temporary suspension on vehicle imports, subject to revised controls.
Under the regulations, importers registered with the Department of Motor Traffic are permitted to import motor vehicles in line with specified conditions. Importers who are not registered are restricted to importing one vehicle within a 12-month period from the date of Customs declaration.
The framework also sets out detailed age limits across vehicle categories under Harmonised System (HS) Chapter 87 and establishes how the date of manufacture is to be determined using manufacturer certificates or export inspection documentation.
Where only the year of manufacture is available, the regulations specify 15 January of that year as the official manufacturing date. Vehicles imported in violation of these provisions are subject to re-export at the importer’s expense.
Payment conditions remain tightly controlled. All motor vehicle imports must be financed through Letters of Credit (LCs), with usance facilities explicitly prohibited. Licensed banks are required to submit daily reports on vehicle-related LCs to the Controller General of Imports and Exports.
The Department of Motor Traffic and licensed banks are also required to maintain databases to monitor import volumes and prevent unregistered importers from clearing more than one vehicle annually.
The regulations further require that vehicles imported for trading purposes be registered in the buyer’s name within 90 days of Customs declaration. Failure to comply attracts a monthly late fee calculated as a percentage of the vehicle’s Cost, Insurance, and Freight (CIF) value, subject to a capped maximum. Persistent non-compliance may result in suspension from vehicle imports for up to 36 months.
In addition to these requirements, the regulations place clear responsibilities on Sri Lanka Customs at the point of clearance. Customs is required to ensure that the relevant gazette notification number and the CIF value of each imported vehicle are correctly recorded in the Customs declaration.
The framework also tightens controls on the use of concessionary permits. Vehicles imported under the specified HS codes are not permitted to be cleared using duty or tax concessions granted under public administration, trade policy, or foreign affairs circulars.
Any vehicle imported in violation of these provisions is required to be re-exported within 90 days from the date of Customs declaration, with all associated costs borne by the importer.
Regulatory authority under the framework is centralised with the Controller General of Imports and Exports, who is empowered to issue binding operational instructions to Sri Lanka Customs, licensed banks, and other relevant institutions.
In the event of interpretational issues or disputes, final determinations, other than mandatory re-export decisions, rest with the Controller General, reinforcing a single point of regulatory discretion.
While these provisions strengthen procedural oversight and financial discipline, industry participants note that compliance assessments remain largely documentation-driven. The regulations do not introduce additional technical inspection requirements relating to vehicle build quality, safety systems, or component standards beyond existing emissions certification and age limits.
Scope of compliance and enforcement
From a regulatory standpoint, the framework strengthens procedural controls over who can import vehicles, how they are financed, and how frequently imports can occur. Enforcement responsibility is shared across Sri Lanka Customs, the Department of Motor Traffic, licensed banks, and the Controller General of Imports and Exports.
Customs is tasked with verifying documentation, HS classification, and declared values at the point of entry. Licensed banks are required to ensure that LCs are issued only to eligible importers and to report transactions daily. The Department of Motor Traffic is responsible for registration compliance and maintaining import records.
While these measures improve traceability at the transactional level, industry participants point out that the regulations do not introduce additional technical inspection requirements relating to vehicle build quality, component standards, or assembly practices beyond existing emissions and age criteria.
Emissions standards and vehicle suitability
The regulatory framework places emphasis on emissions compliance as a prerequisite for importation. Vehicles imported from markets such as Japan, the UK, Australia, and parts of Europe generally meet Sri Lanka’s emissions requirements as a matter of course, according to the President of a leading vehicle import association who wished to remain unnamed.
However, emissions compliance does not encompass other dimensions of vehicle suitability, including structural integrity, safety system specifications, durability under local road conditions, and long-term serviceability. These factors were not explicitly assessed at the import stage under the current rules, he explained to The Sunday Morning.
He added that vehicles manufactured for different export markets may meet the same emissions thresholds while being built to varying specifications. Differences in airbag systems, braking components, suspension design, and material quality may not be captured through emissions testing or documentation-based compliance checks.
Safety incidents and recall experience
Sri Lanka’s experience with vehicle safety issues has highlighted the importance of traceability and importer responsibility.
Over the past decade, local owners have been affected by global recall campaigns involving airbag inflators and other critical components. In some cases, vehicles imported through established dealer networks were successfully identified and recalled following manufacturer notifications.
In other instances, particularly involving vehicles imported on an individual basis, recall communication was less consistent. Owners were required to rely on independent verification or overseas notices, with limited local coordination.
Recalls are typically managed through importer databases, manufacturer liaison, and authorised service networks. Where such structures exist, recall compliance can be tracked.
Where vehicles enter the market without an ongoing importer presence, recall follow-up depends largely on individual initiative, according to the President of the vehicle import association.
Industry perspective on import channels
Registered importers argue that their role extends beyond the point of sale. According to the Ceylon Automobile Importers’ Association, established importers maintain records of vehicles sold, source vehicles from markets with stringent regulatory oversight, and engage with manufacturers or exporters when safety notices or recalls are issued.
Association President Prasad Manage raised concerns about vehicles entering the market through assembly-based or weakly regulated routes, saying such imports fell outside any meaningful quality assurance framework.
“Low-quality vehicles are entering the market through newly assembled units, over which there is no proper regulatory authority. In our experience, assembled vehicles consistently fail to meet acceptable quality standards, and Japan, for instance, does not permit this kind of loosely regulated assembly,” he said.
Manage said that many of the components used in such vehicles were sourced from countries with differing regulatory regimes, increasing the risk to consumers.
“Parts are often brought in from countries such as India and Indonesia, and the recent major recall involving a brand is a clear example of the risks. When vehicles are imported by random or unregistered agents, there is no authority responsible for checking quality or managing defects. In contrast, registered importers source vehicles from markets such as Japan and Europe, where they are subject to stringent quality and safety testing,” he said.
Manage also pointed to differences in how regulatory requirements were applied across import channels, particularly between fully built imports and locally assembled vehicles.
“Registered importers are required to bring in vehicles that comply with emissions standards and specified year-of-manufacture limits, but locally assembled vehicles are not subject to the same requirements,” he said.
“As a result, assembled vehicles can be brought in under much lower specifications. Vehicles imported from markets such as Japan, the UK, and Australia already meet Sri Lanka’s requirements, so they are not subject to additional checks,” Manage added.
Trade Ministry position
The Ministry of Trade maintains that Sri Lanka has defined standards and that importers are required to comply with them.
Deputy Minister of Trade R.M. Jayawardana told The Sunday Morning that the Government’s responsibility was in setting requirements and ensuring enforcement through existing institutions.
“The framework is intended to balance market access with control, without introducing unnecessary barriers,” he said.
Industry representatives acknowledge the improvements in procedural oversight but continue to highlight gaps in technical inspection and post-sale accountability.
The current regulatory framework addresses who can import and how imports are financed. It does not explicitly differentiate responsibility requirements based on import channel once a vehicle is registered.