Regulatory & Policy News
View all(65)⚖️ Proposed NGO Bill Threatens Civic Space & CSR Activities
• Key Concern: The newly released draft of the Non-Governmental Organisations (Registration and Supervision) Act (L.D.-O. 6/2026) faces sharp criticism for potentially eroding democratic space by bringing all "non-profit oriented" and altruistic activities under strict state supervision. • Broad Scope & CSR Impact: The draft extends regulation to social services, foundations, trusts, and even Corporate Social Responsibility (CSR) activities of for-profit firms. Political parties are currently not exempted, though religious organisations and conventional businesses remain largely excluded. • Compliance & Penalties: NGOs will be legally required to "align with Government policies." Failure to submit annual reports or audits on time could result in fines up to LKR 100,000 without court recourse. The Competent Authority (CA) is granted expansive powers to enter premises, attend internal meetings, and suspend or deregister entities. • Implementation Hurdles: Critics note the Bill is structurally ungainly and difficult to implement. The NGO Secretariat’s recurrent budget for 2026 is just LKR 3 million, leaving the CA severely underfunded and understaffed to effectively monitor money laundering or evaluate complex civil society projects. Based on provisional draft text.
📱 SL to Formulate Guidelines on Social Media for Under-16s
The Sri Lankan government is actively working to address the impact of social media on minors, aiming to balance digital education with child safety. • Current Policy Initiatives: Prime Minister Dr. Harini Amarasuriya announced that a successful pilot project is underway to reduce social media usage among children under 16. National guidelines and a mental health awareness program are currently being formulated. • Legislative Framework: A Private Member’s Bill, the _Social Media Minimum Age Bill_, is pending in Parliament. If passed, it will legally prohibit children under 16 from accessing social media platforms to boost online safety. • The Digital Dilemma: Government action faces minor hurdles as it simultaneously rolls out a school digitalization program. This program requires internet access for online studies, which can inadvertently lead students to social media. • Global Alignment: Sri Lanka's moves align with global trends. Countries like Australia, China, Indonesia, Malaysia, and the UK have already restricted access or implemented features like overnight curfues for teenagers to protect mental health. The final recommendations on Sri Lanka's approach are expected to be submitted to Cabinet before the end of 2026.
🏛️ Cabinet Approves 5-Year Strategy to Combat Money Laundering and Terrorist Financing
The Cabinet of Ministers has approved a comprehensive national policy covering the 2026-2030 period to strengthen Sri Lanka's defense against evolving global financial crime risks. • Policy Scope & Purpose: The five-year policy aims to counter money laundering, terrorist financing, and the proliferation of weapons of mass destruction. It addresses complex risks stemming from rapid technological advancements in the banking & financial services sector. • Risk Assessment Basis: Formulated based on findings from Sri Lanka's third National Risk Assessment (2024-2025) conducted by the Financial Intelligence Unit (FIU) of the Central Bank, aligned strictly with global Financial Action Task Force (FATF) standards. • Key Objectives: The framework will enhance institutional coordination, tighten preventive measures, and improve the country's capacity to detect and mitigate financial crimes, protecting the broader Sri Lankan economy and its international standing. • Governance: The proposal was officially submitted by President Anura Kumara Dissanayake in his role as the Minister of Finance, Planning, and Economic Development.
📊 Seminar Set to Tackle Beneficial Ownership Challenges Under New Companies Act
Corporate Management Consultants is organizing a timely seminar for corporate professionals to navigate the practical and legal challenges of complying with the beneficial ownership provisions introduced under the Companies Act, No. 12 of 2025. • Key Focus: Addressing implementation obstacles, regulatory expectations, and compliance best practices faced by Company Secretaries and corporate officers since the enactment of the new legislation. • Eminent Panelists: Dr. Arittha Wikramanayake (Precedent Partner, Heritage Partners) – Keynote on the legal framework and practical compliance issues. Kithsiri Gunawardene (Chairman, LOLC General Insurance PLC) – Sharing industry experiences and practical solutions for Company Secretaries. Dr. Subhani Keerthiratne (Director General, FIU of the Central Bank of Sri Lanka) – Presenting the Financial Intelligence Unit’s perspective on reporting and transparency. Sunethra Dharmakeerthi (Department of the Registrar of Companies) – Outlining regulatory expectations and filing requirements. Malik Cader (Former DG of SEC) – Moderator sharing corporate governance and enforcement insights. • Target Audience: Crucial for Company Secretaries, Directors, Legal/Compliance Officers, Chartered Accountants, and Auditors ensuring regulatory compliance.
📈 Sri Lanka Bans Forced Labour Imports to Protect US Trade Access
The Government of Sri Lanka has prohibited the import of goods produced using forced labour, effective July 10, 2026. The move aims to strengthen international trade compliance and mitigate the risk of severe US tariff hikes. • New Customs Regulations: Issued by President Anura Kumara Dissanayake in his capacity as Finance Minister, the directive mandates importers to submit documentary evidence to the Director General of Customs certifying that imports are free from forced labour. • The US Tariff Threat: The policy responds to the Office of the US Trade Representative (USTR), which flagged Sri Lanka among 60 economies lacking enforced bans on forced labour imports. The USTR proposed an additional 12.5% tariff on Sri Lankan exports, higher than the 10% rate proposed for regional competitors like Bangladesh and Pakistan. • Impact on Key Sectors: The US is Sri Lanka's largest export market, bringing in approximately US$ 3 Bn in annual revenue. This market is heavily dominated by the apparel & textiles sector, making compliance critical to maintaining competitive market access and protecting national employment. • Broader Compliance: Finance Deputy Minister Dr. Anil Jayantha Fernando noted that while domestic labour laws are robust, Customs screening will be tightened to eliminate child and forced labour concerns. This follows Sri Lanka’s ratification of the International Labour Organisation’s (ILO) Convention No. 190 in April, aimed at securing ethical supply chains.
⚡ FTZ Manufacturers Push for Urgent Energy Reforms to Save Export Competitiveness
The Free Trade Zone Manufacturers’ Association (FTZMA) met with Energy Minister Aruna Karunathilake to present crucial policy proposals aimed at lowering operational costs and protecting Sri Lanka's position as an attractive export manufacturing hub. Key Demands & Issues Raised: • Operationalise Power Wheeling: Manufacturers urged the immediate implementation of the regulatory framework for power wheeling. This will allow factories to buy cheaper renewable electricity directly from independent producers using the national grid, reducing reliance on expensive traditional power. • Industrial Diesel Pricing Review: The FTZMA highlighted an unfair pricing structure where less-refined industrial diesel is priced higher than highly-refined auto diesel. They requested a price reduction to eliminate this artificial inflation of production costs for apparel & textiles and other heavy export industries. • Dedicated Zone Fuel Stations: The association pressed for the urgent setup of two dedicated fuel stations within the Katunayake and Biyagama Export Processing Zones. These facilities would grant priority fuel access during supply shortages, safeguarding logistics and preventing costly production delays. Why it Matters: High energy costs are currently eroding Sri Lanka's regional edge. The FTZMA stressed that making energy costs globally competitive is vital for long-term economic diversification, maintaining national employment, and attracting fresh foreign direct investment.
🚨 Court Red Flags Customs' Parliament Remarks in Vehicle Import Case
• The Issue: The Court of Appeal has raised serious concerns that a senior Sri Lanka Customs official may have misled the Committee on Public Finance (CoPF) by claiming settlement talks were underway regarding the detention of over 1,000 imported vehicles at the Colombo Port. • The Contradiction: In a CoPF meeting on June 25, Customs stated a settlement was being discussed. However, the Attorney General explicitly informed the Court that no settlement discussions were taking place and the matter must proceed to judicial determination. • Legal Implications: The three-judge bench noted that if the statements made to Parliament are found to be untrue, they could amount to _contempt of court_. The Attorney General has been directed to obtain an immediate clarification from Customs by July 23. • The Core Dispute: Petitioners are challenging the detention of vehicle imports financed via cross-border Letters of Credit (LCs). Counsel argued that Customs' regulations on cross-border LCs lack uniform legal basis, pointing out inconsistencies in how import documents and vehicle valuations are being handled. • Next Steps: Oral submissions have concluded. All parties must file written submissions ahead of the final judgment fixed for September 18.
⚖️ Court of Appeal Affirms Statutory Bodies Subject to RTI Act
In a landmark judgment promoting governance transparency, the Court of Appeal has dismissed a writ application by the Chartered Institute of Personnel Management (CIPM), affirming that statutory bodies fall strictly within the ambit of the Right to Information (RTI) Act. • The Ruling: The court upheld the RTI Commission's August 2024 determination that the CIPM is a "public authority" under Section 43(b) of the RTI Act. The case originated after the institute refused to disclose information regarding the membership termination of a former Chartered Fellow Member. • Key Arguments Rejected: The Court of Appeal soundly rejected the CIPM's attempt to exclude itself based on minor linguistic differences between the Sinhala and English texts of the Act. The petitioner argued the law only applied to "Boards" or "Offices", but the bench ruled that Section 43(b) plain text clearly covers _"any body or office"_ established under written law. • Impact on Corporate & Professional Governance: The bench observed that incorporation by an Act of Parliament gives an institution state imprimatur. Therefore, it is reasonable to expect such bodies—especially those managing key national professional standards—to remain transparent and accountable. • Legal Technicalities: While dismissing the case on its merits, the Court also upheld a preliminary objection noting that the CIPM failed to cite the original information requester as a necessary party in the legal proceedings. This decision reinforces previous judicial precedents emphasizing that the RTI framework must be interpreted broadly to advance good governance and accountability across Sri Lankan institutions.
🇱🇰 Sri Lanka Advocates for Inclusive AI Governance at UN Global Dialogue
A high-level Sri Lankan diplomatic delegation actively participated in the inaugural UN Global Dialogue on AI Governance held from July 06–07 in Geneva, Switzerland, reaffirming the nation's commitment to digital equity. • Key Highlights & Participation: The delegation was led by Dr. Hans Wijayasuriya, Special Envoy and Chief Advisor to the President on Digital Economy. The team maintained strategic engagement across multiple high-level events from July 06–10, including the UN Global Dialogue, the WSIS Forum, and the AI for Good Global Summit 2026. • National Focus: Sri Lanka underscored its stance on international cooperation, digital equity, and building a fair, inclusive, and secure global digital order as the world transitions into an AI-driven future. This aligns with national efforts toward digital transformation and economic diversification. • Delegation Composition: The high-level team included H.E. Sumith Dassanayake (Ambassador/Permanent Representative to the UN in Geneva), Air Vice Marshal (Retd.) Bandula Herath (Director General of the TRCSL), and senior officials from the Permanent Mission of Sri Lanka in Geneva.
🌐 Sri Lanka Showcase's Digital Reforms at WSIS Forum 2026
Sri Lanka’s progressive digital regulatory reforms gained international prominence at the World Summit on the Information Society (WSIS Forum 2026) in Geneva, Switzerland, highlighting the country's alignment with global governance essentials. • National Strategy Alignment: The Telecommunications Regulatory Commission of Sri Lanka (TRCSL) articulated how new measures operationalize the foundational principles of the National Digital Economy Strategy 2030, aiming for an inclusive and globally competitive digital economy. • Investment & Infrastructure: Newly implemented Radio Frequency Spectrum Auction Regulations have enhanced transparency and investor confidence. Additionally, Telecommunications Infrastructure Sharing Regulations have mitigated capital expenditure duplication and accelerated rural connectivity expansion. • Consumer Welfare & Safety: The deployment of Broadband Quality of Service (QoS) Standard Rules has reinforced operator accountability. Furthermore, enhanced SIM registration frameworks have been institutionalized to mitigate digital fraud, safeguarding the digital financial ecosystem. • Market Modernization: The modernization of the licensing framework through Provider License Rules—covering telecommunications services, infrastructure, and cable landing stations—has unlocked new investment models to drive market participation.
📜 Govt Hikes Registration & Administration Fees for Companies and Societies
The Government of Sri Lanka has upwardly revised a wide range of fees related to the registration and administration of companies and societies. The changes, effective from 6 July 2026, were introduced via Extraordinary Gazette No. 2496/03 by Trade, Commerce, Food Security and Cooperative Development Minister Wasantha Samarasinghe, amending the previous 2022 fee structures. Key Corporate Fee Revisions: • Private Limited Company Registration: Increased by 13% to Rs. 5,200 (from Rs. 4,600). • Public Limited Company Registration: Increased by ~15% to Rs. 26,400 (from Rs. 23,000). • Unlimited Company Registration: Raised to Rs. 19,800 (from Rs. 17,250). • Company Limited by Guarantee: Registration fee set at Rs. 39,600. • Company Name Approval: Increased to Rs. 2,600 (from Rs. 2,300). • Administrative Filings: Annual return filing is set at Rs. 7,900, while registration of mortgages, charges, and debentures will cost Rs. 9,900. • Other Corporate Sectors: Revisions also apply to company secretaries, auditors, offshore companies, and overseas companies establishing places of business in Sri Lanka. Society Fee Revisions: • Society Registration: Increased to Rs. 3,900 (from Rs. 3,450). • Constitutional Amendments: Raised to Rs. 1,900 (from Rs. 1,725). • Administrative Tasks: Annual return filing is set at Rs. 1,300, certified copies of documents at Rs. 600, and file searches at Rs. 265.
📈 Sri Lanka’s Trade Strategy: The Need for Modern Agreements
An analysis of modern trade frameworks highlights the critical need for Sri Lanka to establish robust bilateral and plurilateral trade agreements to insulate its economy from global policy volatility, particularly from its largest export market, the US. • Dispute Resolution Gaps: The India-Sri Lanka Free Trade Agreement (ISLFTA), active since 2000, severely lacks an effective dispute resolution mechanism, relying heavily on political action by trade ministries rather than modern independent arbitration. • Global Context & Alternatives: With the WTO’s dispute system rendered ineffective by the US blocking appellate panel appointments, frameworks like the USMCA (via preapproved expert rosters in Article 31.8) and the Regional Comprehensive Economic Partnership (RCEP) offer working blueprints to bypass single-party deadlocks. • Strategic Pragmatism: For Sri Lanka, progressing with modern frameworks like the India-Sri Lanka Economic and Technology Cooperation Agreement (ETCA) and the RCEP is deemed unavoidable to secure market stability. • Negotiating Capacity: Sri Lanka faces a critical domestic capacity gap, having stalled trade negotiations since the mid-2000s. While the Economic Transformation Act, No. 45 of 2024 provided for an Office of International Trade (OIT), it remains unimplemented. • Next Steps: The government urgently requires a specialized agency to manage experienced trade consultants—similar to the 2022 sovereign debt restructuring modality—to guide negotiators and build long-term local expertise.