Call to ban entrepôt trade in Sri Lanka over waste controversy

ECONOMYNEXT – Sri Lanka’s Marxist Janatha Vimukthi Peramuna has called for an end to all entrepôt trading over alleged import and processing of waste without proper approvals using so-called ‘hub operations’ rules.

Entrepôt trading involves the import of good from one country and re-export to other countries or customers with or without processing and storage, without paying domestic import taxes.

Such activities are performed in hubs such as Singapore and help create jobs and demand for other services including warehousing.

JVP leader Anura Dissanayake said waste had been imported using authorization given in 2013 by a gazette notice that gave approval for hub operations.

"Waste was imported using this gazette," Dissanayake told parliament. "I understand that Customs officials cannot check or hold these goods. To protect the motherland this gazette must be revoked."

He also called for an explanation from the minister of finance.

Bandula Gunewardene, from the so-called joint opposition of ex-President Mahinda Rajapaksa said an attempt was being made to blame him for the waste imports.

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Gunewardene said the gazette did not contain any rules to say that customs cannot check shipments imported for hub operations.

Gunewardene had earlier objected to a free trade deal with Singapore, saying garbage would be imported tax free. The waste had been imported from the UK.

Officials however had said any waste, whether imported with or without tax should be specially approved and the FTA did not change the situation.

Dissanayake asked the government to tell how many waste containers were imported and how.

Dissanayake questioned whether in addition to containers lying at the port whether more containers were inside the country. An answer was promised within the week.

Finance Minister Mangala Samaraweera on Tuesday called for a report from customs chief over how the waste was imported and whether approval was given by the central environmental authority, the finance ministry said.

He had said waste imports have to be cleared by the central environmental authority.

Hayleys Free Zone Limited, the entrepot operator, had said the mattresses were imported for Ceylon Metal Processing Corporation (Pvt) Limited, which was the actual owner of the cargo which is now lying at the port, had got into financial difficulties.

The firm said documents had indicators that it was non-hazardous cargo. (Colombo/July23/2019)