The National Chamber of Exporters of Sri Lanka (NCE) urged the Government to introduce an incentive scheme for repatriation of export proceeds through accurate invoicing adding that heavy penalties for non-compliance will certainly bring the expected change in country’s forex inflows.
NCE in a statement noted that there has to be system to funnel export remittances to the Central Bank of Sri Lanka (CBSL) so it can make allocations for imports through the banking system and that the NCE is committed to support authorities engender change in rebuilding the economy through exports.
The NCE stated that the recent statement by the CBSL alleging exporters of not remitting full export proceeds has raised concerns.
“The Statement by the CBSL clearly accused exporters for not remitting export proceeds earned overseas, denying the country much needed foreign currency, during this unprecedented economic meltdown. Under the Repatriation of Export Proceeds into Sri Lanka Rules No. 05 of 2021, published by a gazette notice, the CBSL enforced exporters to remit foreign exchange earnings and convert to Sri Lankan rupees, except for allowed payments,” they said. The statement further noted that in this regard, the figures provided by CBSL ought to be thoroughly investigated and action taken as per prevailing laws and regulations. They said it is the task by CBSL to monitor repatriation and conversion of export proceeds to the country with the support of a robust system and to penalise those who do not conform to such formalities.
“Exporters have registered export invoices with CBSL through CUSDEC. As per ruling by CBSL, they have to remit the full export proceedings to Sri Lanka within 180 days, resulting a penalty if the stipulated days have been exceeded. However, if such delays were due to genuine reasons of not accepting goods on time, CBSL has recalled the penalties imposed. Yet, the CBSL should have a mechanism to check the time difference between filing the custom declaration and remittance of export proceeds, making a note that exporters are permitted to 180 days’ credit. In a practical world, export proceedings of the previous month will be affected anytime between one to 25 weeks,” it said.
In this case, the NCE requests CBSL to provide source verification of figures provided, noting that when Sri Lanka Customs reflects export figures each month, it should be matched against the approved credit period for repatriation of export proceeds.
Adding further, the NCE stated that CBSL being the apex body of managing the fiscal condition of the country, ought to play a massive role in stabilising the country’s economy. Simply by highlighting long years of malpractice by exporters of not remitting forex earnings, is only showcasing the ineffective governance of this highest state authority.
“We are surprised to hear that even a year ago as stated by CBSL, Sri Lanka Customs has reported USD 985 Million worth exports during the eight months from January to August 2021. During July/August that year, exporters have repatriated an average of USD 640 million a month,” a senior NCE official stated.
According to the Chamber, they have discussed this matter with their members and has emphasised the importance of following the rules of CBSL related to Forex remittance especially during this crisis and that Sri Lankan exporters are duty bound to do so.