Wednesday, July 22 2026
Wednesday, July 22 2026
MONETABRIEF - Sri Lanka Customs is probing multiple cases involving undervaluation of imports where money is suspected to have been remitted through pre-payments made through telegraphic tansfers by a third party, spokesman Chandana Punchihewa said.
Sri Lanka President Anura Kumara Dissanayake told parliament last month that authorities have nabbed individuals who had remitted close to a billion US dollars through multiple banks as import pre-payments but no corresponding shipment had come.
The remittance case itself had no connection to customs and came under the perview of the central bank and its Financial Intelligence Unit as the party was not a registered importer.
However investigations have now started on several cases where it is suspected that the party remitted funds to pay for undervalued imports made by others.
"It is our belief that there is some amount of money linked to imports which come under Customs," Punchihewa told reporters.
"I do not think the entire amount was used for under-invoicing. But the Customs has initiated probes into several case where it looks like there is a link to Customs related imports.
"But there is no final conclusion as yet, because that party itself we have not investigated as he is not a registered importer.
"But if he has sent money on behalf of an importer, we can do investigations and by this time we have started a number of investigations."
Some of the money could be linked to money laundering and payments for drugs, he said.
Sri Lanka also has exchange controls because the central bank is not accountable for printing money. Forex shortages from money printing has led to trade controls and increasingly higher import duties from 1952 February.
Undervaluation was mostly linked to goods which were taxed at high rates. Highly taxed items include fruits, dairy products and cars, he said.
Customs have started a process where they call importers together and question the valuation by showing other imports made at higher values.
If they admit and agree to pay the difference in taxes, they have been allowed to pay without a penalty, Punchihewa said.
But there have been curious instances where low taxed items were also taxed.
In the case of Malaysian lumber, which was only taxed at 7.5 percent many years ago, Customs came to know that they were undervalued.
The lumber importers have said that the lower valuation was declared at the request of the exporter in Malaysia who wanted part of the payment to be remitted elsewhere. (Colombo/July11/2026)
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