Regulatory & Policy News
View all(123)US and China Agree to $60 Billion Reciprocal Tariff Cuts and Extended Trade Truce 📈
• Overall Trade Agreement: The US and China agreed to cut tariffs on US$ 60 Bn worth of reciprocal non-sensitive goods (US$ 30 Bn from each side) following the recent Washington summit between President Xi Jinping and President Donald Trump. • Trade Truce Extension: A two-month extension of the trade truce pushes the deadline to January 10, providing market predictability and allowing time to assess broader bilateral trade mechanisms. • US Export Tariffs Reduced: China agreed to lower levies on US agricultural items (corn, wheat, meat, dairy, vegetable oils) excluding soybeans, alongside seafood, wood products, cosmetics, and medical devices. China also committed to importing 10 million metric tons of coal annually from the US in 2027 and 2028. • Chinese Export Tariffs Reduced: Washington will lower tariffs on Chinese small household appliances (coffee makers, toasters), tableware, bedding, toys, holiday decorations, and child car seats. • Broader Sector Impact: • Agriculture: Establishes a joint working group to boost US market access under a US$ 17 Bn purchase commitment. • Finance & Technology: China will process licenses for foreign financial institutions. Both nations established an incident response communication channel for artificial intelligence ahead of November talks. • Market Reaction: Chinese tech stocks dropped, pulling the benchmark blue-chip index down over 2% due to ongoing US national security restrictions on Chinese tech components.
🔋 Grid Battery Plan Unlikely to Resolve Rooftop Solar Bottlenecks
Parliamentary committees (CoPF and SOC) warned that the National System Operator’s (NSO) 160 MW grid battery project will absorb national surplus solar, but will not relieve local transformer overloads in high-demand areas like the Western Province. • Grid vs. Local Storage Bottlenecks: - NSO is deploying 16 substation batteries (16⚡ Sri Lanka Grid Battery Plan Fails to Relieve Rooftop Solar Bottleneck Parliamentary committees (CoPF and SOC) highlight that the National System Operator's (NSO) 160 MW grid battery project will not resolve localized transformer congestion blocking new household connections, particularly in the Western Province. • Network Bottlenecks & Grid Allocation: 160 MW (40 MWh x 16 substations) battery rollout targets grid substations outside congested urban areas, aiding ground-mounted solar farms rather than local rooftop solar users in areas like Kotte and Kolonnawa. • Tariff Changes & Cost Burdens: Net metering/accounting is closed for new users, forcing them onto 'Net Plus' with a feed-in tariff of ~Rs. 23/unit while buying power at ~Rs. 100/unit (above 180 units). Household 5 kW batteries cost over Rs. 1 million and still incur import duties, whereas megawatt-scale batteries enjoy duty-free imports. • Energy Sector Demand: Daytime solar output (>2,000 MW) approaches daytime peak demand (2,500–2,600 MW). Thermal power still accounts for ~40% of generation. Total consumption up to 21 Sept rose to 14,062 GWh (vs. 11,637 GWh YoY), risking reserve margin breaches. • Policy Disagreements: Discrepancies persist between Cabinet-approved tariff policies and PUCSL guidelines, creating regulatory friction for the renewable energy sector. CoPF approved Rs. 17.2 billion for NSO to cover Q1 deficits.
⚡ Govt. Denies Rooftop Solar Restrictions, Cites Grid Stability Measures
Energy Minister Anura Karunathilaka has dismissed claims that the Government is curtailing rooftop solar, emphasizing a commitment to expand renewable energy to support the national economy. • Policy Updates & Capacity Limits: • The 2026 rooftop solar capacity target has already been exceeded, prompting temporary approval monitoring by utility providers (EDL and LECO) for grid stability. • Pre-Sept 11 approvals remain valid. New applications are moving to the ‘Net Plus’ scheme. • Battery-backed zero-export systems are exempt from restrictions. • Current Solar Capacity: • Total installed solar capacity has surpassed 3,070 MW, with rooftop solar accounting for ~2,542 MW and ground-mounted projects for ~534 MW. • Solar currently meets 15% to 25% of Sri Lanka's daily electricity demand, with 25–30 MW added monthly. • 1,141.1 MW of rooftop capacity was added from 2025 to Aug 2026 (938.8 MW in 2025; 202.3 MW in Jan–Aug 2026). • Future Expansion Targets: • Plans aim to connect an additional 4,585.7 MW of solar power to the national grid by 2029. • 2027 target: 1,392 MW addition (500 MW rooftop solar, 442 MW small/medium projects, 450 MW large-scale parks). • To absorb daytime excess and manage grid stability, 1,240 MW/4,660 MWh of battery storage will be added between 2027 and 2029.
📊 Sri Lanka Banking Sector Prepares for APG Mutual Evaluation 2026
The banking and financial sector in Sri Lanka is gearing up for its 3rd Mutual Evaluation under the Financial Action Task Force (FATF) framework, conducted by the Asia Pacific Group on Money Laundering (APG). • Key Focus & Assessment Areas: • Evaluates technical compliance (laws and policies) and practical effectiveness in preventing financial crime. • Covers FATF’s 40 recommendations and 11 "Immediate Outcomes" including risk assessment, supervision, beneficial ownership transparency, and sanctions. • Evaluation Timeline: • On-site Assessment: Oct 26 – Nov 6, 2026 (public & private sector interviews). • Initial Draft Review: April 2027. • Final Report Adoption: APG Plenary Meeting in July 2027. • Industry Impact & National Context: • Focus is shifting from document-led compliance to outcome-focused risk management. • The Association of Professional Bankers (APB) stressed that a successful review is vital for sustaining international financial integration and market confidence as Sri Lanka shifts from economic stabilization to growth.
🏛️ Sri Lanka Parliament Passes 22nd Amendment to Extend Judicial Tenure
Parliament has passed the 22nd Amendment to the Constitution (22A) alongside the companion Judicature (Amendment) Bill to address judicial shortages and reform the court system. • Voting Breakdown: - 22A passed with 158 votes in favour and 62 against (out of 220 MPs present), clearing the required two-thirds special majority. - Judicature (Amendment) Bill passed with 158 votes in favour and 61 against (out of 219 MPs present). • Key Provisions & Judicial Retirement Ages: - Supreme Court: Retirement age raised from 65 to 67. Future Chief Justices must step down at 67 or after 6 years in office, whichever comes first. - Court of Appeal: Retirement age🏛️ Parliament Passes 22nd Amendment to Extend Judicial Tenure Parliament has passed the 22nd Amendment to the Constitution (22A) alongside the Judicature (Amendment) Bill with a two-thirds special majority (158 votes in favour, 62 against). Key details of the approved legislative changes: • Supreme Court: Retirement age increased from 65 to 67. Future Chief Justices must retire at 67 or after six years in office. • Court of Appeal: Retirement age raised from 63 to 65, with an increase in the total number of seated judges. • High Court & Lower Judiciary: High Court retirement age increased from 61 to 63, with the judge cap raised from 110 to 120. All other judges and magistrates will now retire at 62. • Objectives: Aimed at strengthening the judicial system, addressing officer shortages, and retaining expertise within public administration and legal infrastructure. • Legal Ruling: The Supreme Court confirmed the Bill required a special majority without a referendum, ruling that a uniform, non-discriminatory tenure extension does not compromise judicial independence.
📋 Mandatory TIN Certificate Required for 8 Key Transactions from Nov 01
The Inland Revenue Department (IRD) has announced that submitting a valid Taxpayer Identification Number (TIN) Certificate will be mandatory starting November 01, 2026, for individuals executing specified financial, legal, and property transactions. • Scope & Coverage: Applies to all resident individuals aged 18 or older as of Dec 31, 2023, or turning 18 on/after Jan 01, 2024, under the Inland Revenue (Amendment) Act, No. 11 of 2026. • Mandatory Transactions: • Opening accounts at banks & financial institutions • Obtaining credit cards • Registering or renewing motor vehicle licenses • Registering land or land titles • Registering a business • Transferring shares in Sri Lankan companies (both transferee and transferor) • Approving building plans • Implementation: Responsible officials are directed to ensure valid TIN Certificates are verified prior to processing or completing any specified transaction.
🚢 Six Months of Heightened Risk and Uncertainty for Seafarers in Strait of Hormuz
• Overview: IMO Secretary-General Arsenio Dominguez calls for urgent international cooperation and practical solutions as maritime security threats persist in the Persian Gulf six months after conflict began on 28 February 2026. • Shipping & Human Impact: • At least 70 verified attacks on international shipping, resulting in 19 seafarer fatalities. • Up to 400 ships and approximately 6,000 seafarers remain unable to depart safely. • Global Supply Chain Risks: Disruption to transit passage threatens global trade, impairing vital supply chains for key commodities such as fuels and fertilizers, impacting communities and economies worldwide. • Policy & Response: The IMO Council resolution adopted in July reaffirms the right of transit passage through international straits, urging coordinated action across Member States and the UN system to restore unhindered navigation.
🚢 IMO Launches Global Survey on Maritime Single Window Implementation
The International Maritime Organization (IMO) has opened a global feedback survey to evaluate the adoption, challenges, and operational impact of Maritime Single Windows (MSWs) following their mandatory implementation under the FAL Convention in January 2024. Key Highlights & Overview • Centralized Digitalization: MSWs serve as a unified electronic platform for ship-to-port data submissions, reducing administrative delays, enhancing transparency, and streamlining port call clearance. • Economic Relevance: Efficient port operations directly support Sri Lanka’s pivotal maritime & logistics hub status and international trade flow. • Survey Scope: Gathers input from port authorities, customs agencies, shipping companies, and freight forwarders to identify implementation bottlenecks and technical assistance needs. • Timeline: The survey remains open until 31 October 2026, with a follow-up assessment scheduled for 2028 to track operational progress and workload efficiency.
🚢 Six Months of Heightened Risk and Uncertainty for Seafarers in Strait of Hormuz
• Overview: IMO Secretary-General Arsenio Dominguez calls for urgent international cooperation and practical solutions as maritime security threats persist in the Persian Gulf six months after conflict began on 28 February 2026. • Shipping & Human Impact: • At least 70 verified attacks on international shipping, resulting in 19 seafarer fatalities. • Up to 400 ships and approximately 6,000 seafarers remain unable to depart safely. • Global Supply Chain Risks: Disruption to transit passage threatens global trade, impairing vital supply chains for key commodities such as fuels and fertilizers, impacting communities and economies worldwide. • Policy & Response: The IMO Council resolution adopted in July reaffirms the right of transit passage through international straits, urging coordinated action across Member States and the UN system to restore unhindered navigation.
🇦🇪 UAE to Enforce Strict Maritime Pre-Load Cargo Info Rules from Oct 1
• Overview: The UAE National Advance Information Center (NAIC) will fully enforce Maritime Pre-load Cargo Information (MPCI) rules starting October 1, 2026, following the end of the industry transition period on September 30. • Key Compliance Requirements: • Mandatory Codes: Shipping instructions must include a valid MPCI Code or Party ID (issued to registered shipping lines, freight forwarders, and agents via the NAIC portal). • Cargo Details: Direct or non-consolidated Bills of Lading require a mandatory 6-digit HS Code, accurate container/seal numbers, specific cargo descriptions, and full name/address details for shipper, consignee, and notify party. • Freight Forwarder & NVOCC Rules: House Bill of Lading (HBL) filings must be completed at least 24 hours prior to loading at the last foreign port, referencing the Master Bill of Lading (MBL) number and achieving Assessment Complete status. • Impact on Sri Lankan Exporters: Failure to comply or submitting inaccurate data may result in Do Not Load (DNL) instructions, cargo holds, loading delays, or regulatory penalties, impacting key export sectors like apparel & textiles, tea, and rubber products bound for or transiting through the UAE.
🚢 IMO Sets "From Policy to Practice" Theme for World Maritime Day 2026–2027
• Strategic Focus: The International Maritime Organization (IMO) introduced its first two-year theme, "From Policy to Practice: Powering Maritime Excellence," targeting effective implementation, capacity building, and enforcement of international maritime regulations across national frameworks. • Core Priorities: Key focus areas include decarbonisation, clean fuels, autonomous shipping, seafarer safety/welfare, and accelerating digitalisation through systems like Maritime Single Windows to boost trade efficiency. • Relevance to Sri Lanka: Highlights the need for strong national legislation, port infrastructure upgrades, and training for skilled professionals to support maritime & logistics governance and facilitate sustainable economic growth.
📊 Debate Surrounds State PII Safeguards & SLUDI Implementation
Concerns over State handling of Personally Identifiable Information (PII) have surfaced regarding Sri Lanka's digital initiatives, including the Sri Lanka Unique Identity (SLUDI) and the Personal Data Protection Act, No. 9 of 2022. • Historical Context: Critics cite the misuse of electoral registries during the 1983 pogrom to target households. However, analyses indicate these were manual, paper-based paper copies distributed via political candidates across ~14,000 Grama Niladhari (GN) divisions, confirming non-digital systems carry inherent exposure risks. • Digitalization & Risk: While low-friction digital transmission can amplify data leak risks, digitalization allows for advanced administrative and legal safeguards (analogue complements) not feasible in physical paper-based workflows. • Proposed Safeguards & System Reforms: • Restricting name and address access for polling station staff by leveraging SLUDI biometric authentication. • Transitioning to digital voter messaging to obscure personal phone numbers during campaigns, reducing paper usage and physical door-to-door canvassing risks. • Utilizing secure infrastructure, such as logging all access and copying actions within the Government Cloud, to prevent insider abuse while allowing GNs to deliver public services.