By The Pulseline News Desk
Sri Lanka has moved to significantly strengthen oversight of import-related foreign exchange transactions, introducing a new regulatory framework aimed at preventing illicit capital outflows while improving transparency in the country’s import payment system.
The new measures, which came into effect on Friday (19) through a Gazette Extraordinary issued under the Imports and Exports (Control) Act, No. 1 of 1969, impose stricter reporting obligations on commercial banks and new registration requirements for importers.
While some businesses initially expressed concerns that the regulations could lead to tighter controls on imports, the government insists the primary objective is not to restrict trade but to ensure greater accountability in the movement of foreign exchange.
Speaking on the new regulations, Deputy Minister of Finance, Planning and Economic Development Anil Jayantha Fernando has said the initiative is intended to systematically monitor import operations and identify suspicious financial transactions rather than impede legitimate commercial activity.
“The purpose of this gazette is not to impose restrictions on imports and exports. It is to properly monitor payments made for imports and prevent the unnecessary and illegal outflow of valuable foreign exchange,” he has explained.
Emerging financial risks
The regulations come against the backdrop of growing concerns over abuses within the import-export sector.
According to Fernando, recent revelations in Parliament highlighted how certain groups had allegedly exploited weaknesses in the existing system by establishing fraudulent shell companies and using them as vehicles to transfer foreign currency out of Sri Lanka under the guise of legitimate trade transactions.
These findings prompted authorities to reassess existing monitoring mechanisms and introduce more robust safeguards to track the flow of funds leaving the country.
The government believes that stronger oversight is essential as Sri Lanka continues efforts to safeguard its foreign exchange reserves and strengthen financial governance following years of economic instability.
Banks face expanded reporting duties
At the centre of the new framework is a requirement for licensed commercial banks to maintain closer coordination with Sri Lanka Customs whenever outward remittances are made for import transactions.
Banks must now assign a unique identification number to every remittance and immediately provide detailed transaction data to Customs authorities.
The information to be reported includes the importer’s Taxpayer Identification Number (TIN), addresses of both the remitter and beneficiary, bank account details, branch and bank codes, currency and value of the transaction, payment and delivery terms, remittance dates, proforma invoice numbers and descriptions of the imported goods.
Officials believe the system will create a comprehensive digital trail for every import-related payment, enabling authorities to verify transactions more efficiently and identify unusual patterns that may warrant investigation.
Fernando noted that the requirement for a unique tracking number for each transaction will further enhance transparency and strengthen audit capabilities across the banking sector.
Importers required to register
The regulations also introduce new compliance obligations for importers.
Before making any advance payment for imports, importers must now be registered with Sri Lanka Customs. Commercial banks have been instructed not to process advance remittances unless the importer can demonstrate compliance with this requirement.
Authorities say the measure will help ensure that import transactions are linked to verified entities and will reduce opportunities for fraudulent operators to exploit gaps in the regulatory system.
Under the new framework, authorities will collect detailed information from importers, including verified addresses, active bank account numbers, information relating to imported goods and the currencies used for settlement of transactions.
Balancing trade and oversight
Government officials maintain that the regulations are intended to balance trade facilitation with stronger financial controls.
Rather than introducing new barriers to imports, policymakers argue that the measures are designed to improve transparency, strengthen regulatory oversight and protect scarce foreign exchange resources from abuse.
To ensure smooth implementation, the Controller General of Imports and Exports has been authorised to issue operational guidelines to Sri Lanka Customs, commercial banks and other relevant institutions.
As the regulations take effect, importers, financial institutions and trade stakeholders will be closely watching how the new requirements are implemented in practice.
For the government, however, the message is clear: tighter monitoring of import payments is now viewed as a critical component of broader efforts to strengthen financial discipline, combat illicit financial flows and safeguard Sri Lanka’s foreign exchange reserves.
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