Sri Lanka to criminalize unauthorized foreign fund transfers

The Sri Lankan Cabinet has approved in principle an amendment to the Foreign Exchange Act, No. 12 of 2017, to criminalize unauthorized foreign fund transfers. Currently, the Central Bank of Sri Lanka can only impose monetary penalties for such infractions. The new measure aims to close a legal gap that has hindered law enforcement, particularly in cases where funds are remitted for imports but the goods are never delivered.

Separately, the government is reviewing the future of the customs surcharge on vehicle imports. Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe stated that any decision to remove the surcharge after December 31 will depend on the nation’s foreign exchange reserves. While the government aims to eventually reduce the tax burden and make vehicle purchases more affordable, current measures are intended to manage fuel demand and protect reserves.