Sri Lanka Customs is set to take over import and export clearance functions from the Board of Investment (BOI) by October 2025, a move buried in the latest International Monetary Fund (IMF) program review that has triggered alarm among investors.
The IMF’s July 2025 report reveals that the Government, citing “possible revenue leakage,” agreed to shift the BOI’s long-standing trade facilitation role to Customs—despite offering no proof and without this being part of the original IMF commitments.
Analysts warn that this decision will severely undermine Sri Lanka’s competitiveness against major investment hubs such as the UAE, Singapore, Hong Kong, Malaysia, Vietnam, and India, all of which operate special economic zones designed to expedite global trade.
The BOI’s trade facilitation system, established over three decades ago, was intended to attract investment in Free Trade Zones, streamline export processing, and avoid outdated laws that often breed corruption.
Although BOI already operates on Customs’ ASYCUDA system and Customs officers oversee compliance within zones, the final documentation and clearance functions have remained with the BOI, enabling faster processing. Customs, however, retains authority to inspect, audit, and monitor cargo when warranted.
By fully transferring control to Customs, stakeholders fear trade facilitation will give way to bureaucratic delays and increased opportunities for corruption. Non-BOI traders have long complained about inefficiencies, congestion, and abuse of power under Customs’ century-old ordinance. The Sri Lanka Shippers’ Council has repeatedly highlighted how Customs’ practices disrupt supply chains under various pretexts.
Investor representatives say they were not consulted before the Government committed to this reform, and BOI management has expressed strong opposition, warning that such changes, introduced without offering special concessions, will make Sri Lanka a far less attractive investment destination. Sources indicate that investors have already urged the Government to reverse the move.
This takeover bid is not new. For over 25 years, Customs has sought to absorb BOI’s clearance functions, with two Supreme Court rulings between 1999 and 2003 blocking earlier attempts. The current push, insiders allege, comes after lobbying by Customs unions and a senior government official sympathetic to their cause, using IMF reforms as political cover.
With no evidence of revenue leakage, no digitalisation drive, and no overhaul of outdated Customs laws, analysts see the move as a power grab rather than a genuine efficiency measure—one that risks dismantling investor-friendly systems that have been in place for decades.
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