Sri Lanka vehicle importers demand release of 1,000 stranded vehicles

Importers in Sri Lanka are calling for the urgent release of nearly 1,000 vehicles currently held at ports due to a protracted dispute involving cross-border Letters of Credit (LCs). The standoff has reportedly lasted for more than a year, causing significant financial strain on businesses.

Thabith Naja of Providence Auto stated that the prolonged detention is resulting in mounting costs related to demurrage, storage, financing, and depreciation. He noted that these delays also postpone the collection of Customs duties and taxes by the state. Naja emphasized that in many disputed transactions, LCs had already been honored and overseas suppliers paid through the formal banking system, meaning foreign exchange has already left the country.

The dispute primarily concerns the interpretation and authentication of trade documents, specifically in cases where overseas banks do not physically stamp documentation. Importers maintain they have not bypassed the banking system or attempted to avoid taxation, arguing that the current impasse only increases losses for the import sector and the government.