📈 Harsha Warns New Regulations Burden Legitimate Businesses Amid $ 715 Mn Remittance Fraud

Opposition MP Dr. Harsha de Silva cautioned that new import control regulations impose heavy compliance costs on legitimate trade & commerce entities without resolving core enforcement failures that allowed $ 715 Mn to leave Sri Lanka via fraudulent advance import payments. • Key Issues & Enforcement Gaps: • System Incompatibility: The ASYCUDA system at Sri Lanka Customs cannot automatically reconcile Customs declarations with bank transfer documents. • Inter-Agency Failures: Financial Intelligence Unit (FIU) alerts on trade-based money laundering were not acted upon due to poor coordination between the Central Bank, Customs, and commercial banks. • Compliance Weaknesses: Commercial banks processed advance remittances without recording mandatory Tax Identification Numbers (TIN), while shell companies operated without basic verification. • Impact on Businesses: • Requiring importers to undergo multiple registrations adds unnecessary administrative delays and costs for compliant import-export businesses. • CID investigations confirmed ~$ 715 Mn was fraudulently remitted overseas between 2023 and 2026 for phantom imports that never entered the country. • New Regulatory Measures: • Importers making advance payments must register with Customs before bank processing. • Banks must verify beneficiary details, a Unique Identification Number (UIN), and importer TIN prior to remitting funds.