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Friday December 9th, 2022

Sri Lanka residents who earn abroad allowed to maintain foreign bank accounts

ECONOMYNEXT – Sri Lanka residents who have worked abroad and earned money, individuals or firms which provide services to foreigners have been allowed to open accounts in foreign banks under regulations issued under the Foreign Exchange Act.

Money earned before Sri Lanka’s 2017 Foreign Exchange Act was enacted or before could be held in such accounts.

In regulations that went into effect on March 22, persons who go abroad temporarily for business, medical or education purposes are also allowed to open foreign account without prior permission but any remaining proceeds have to be remitted back after the task is completed.

In addition a person who had invested abroad, requires a bank account to be opened to get a visa, to make a permitted investment abroad are also allowed to open accounts.

Exporters are also allowed to open foreign accounts but proceeds have to be remitted to Sri Lanka one month after the purpose for which it was opened had been completed.

Students who fail to get visa also have to remit the money back.

The regulation are effective from March 22.

Separately Sri Lankans have been allowed to retain up to 15,000 US dollars in their possession after their return from abroad in a relaxation of earlier more draconian legal tender laws.

Sri Lanka is expected to allow foreign money to be brought back to Sri Lanka on the payment of a 1 percent fee.

Download Regulations on foreign bank accounts

The regulation are reproduced below:

Persons permitted to open, maintain and operate an account with a regulated financial institution outside Sri Lanka

1. Following persons are permitted to open, maintain and operate foreign currency accounts with a regulated financial institution outside Sri Lanka –

(a) a person resident in Sri Lanka who has proceeded outside Sri Lanka temporarily for business, education or medical purposes;

(b) a person resident in Sri Lanka who has at any time prior to or after this Act coming into effect, been a resident outside Sri Lanka and earned or otherwise acquired foreign exchange outside Sri Lanka not involving the conversion of Sri Lanka Rupees into foreign exchange;

(c) an individual, a company or a firm registered in Sri Lanka which provides professional or vocational services outside Sri Lanka and receives payment in foreign exchange for such services from a person resident outside Sri Lanka;

(d) an individual, a company or a firm registered in Sri Lanka which has been granted general or special permission under the provisions of the Act, to invest outside Sri Lanka, provided such person is required to open an account outside Sri Lanka as a requirement of the said investment;

(e) an exporter of merchandise goods;

(f) a person who holds permanent residency in another country;

(g) a dual citizen;

(h) a person resident in Sri Lanka who intends to proceed outside Sri Lanka for education in a country
where such person is required by the visa granting authority to open and maintain an account with a
regulated financial institution in such country as a condition to grant visa;

(i) a company incorporated in Sri Lanka which is eligible to borrow from an overseas bank or financial
institution provided such company is required to open an account outside Sri Lanka as a condition of
such loan agreement.

2. (1) Any person specified in paragraph 1 of Heading G of this Schedule, who opened and maintained an
account with a regulated financial institution outside Sri Lanka may close such accounts for the purposes of complying with these regulations.

(2) An account opened by a person specified in paragraph 1 of Heading G of this Schedule may be credited with foreign currency earned, received or acquired legally outside Sri Lanka or obtained in Sri Lanka in the name of such person from an authorised dealer or a restricted dealer under the provisions of the Act.

(3) Funds in the accounts opened by persons specified in paragraph 1 of Heading G of this Schedule may
be utilized towards any foreign exchange transactions of the account holder.

(4) A person who is permitted to open and maintain an account with a financial institution outside Sri Lanka under paragraph 1 of Heading G of this Schedule except for categories specified in subparagraphs (b), (c), (f), (g) and (h) therein shall repatriate to Sri Lanka any balance funds remaining in the accounts opened by such person outside Sri Lanka within one month from the date of fulfillment of purposes for which the account was opened.

(5) Where a person who is permitted to open and maintain an account outside Sri Lanka under the category specified in subparagraph (h) of paragraph 1 of Heading G of this Schedule, has been refused a student visa by such country or decides not to embark on studies after obtaining the student visa, such person shall repatriate all monies lying to the credit of the account opened by such person outside Sri Lanka under this regulation within one month from the date of such decision.

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Sri Lanka president slams power regulator chief after conflicting with minister

ECONOMYNET – The powers to change the electricity tariff in Sri Lanka is vested with the Minister of Power and not the Public Utilities Commission (PUCSL), President Ranil Wickremesinghe told the Parliament.

The minister of Power and Energy, Kanchana Wijesekara has requested an upward price revision to be implemented in two phases both in January and July next year, saying the recent tariff hike was not enough for the state-run utility provider Ceylon Electricity Board (CEB) to continue uninterrupted power supply.

However, Jaynaka Ratnayake, the Chairman of the PUCSL had said  the recent tariff hike is enough for the CEB to cover the cost of production and it will not allow another price hike. However, he has said a twice a year price revision is necessary though it should be in April and October instead of January and July.

President Wickremesinghe said the PUCSL chief was opposing the tariff hike due to his personal reasons.

“The power is vested with the Minister and me. I am the one who made the PUCSL act and I know what is in it,” Wickremesinghe told the parliament on Thursday. quoting a letter from the Attorney General which mentioned provisions in the island nation’s Electricity Act.

Accordingly the Act, the PUCSL would be statutorily obliged to give effect to such policy. It is observed that neither the Act nor the PUCSL Act contains any provisions that empowers the PUCSL to change or act invariant of such policy guidelines.

“The Chairman of the PUCSL is misguiding the general public. I have to meet him and see,” Wickremesinghe said.

WIckremesinghe said the Chairman does not want the tariff hike because he owns one of the highest electricity consuming companies.

“He is the Chairman of the Trillium corporation. It is the firm that takes up the most energy”, he said.

The Trillium group is managed by Janaka Ratnayake and he also holds positions as the chairman and CEO of Trillium Property Management & Services Ltd., City Housing and Real Estate PLC, Trillium Residencies Ltd., Computer Care (Pvt) Ltd., and Rent a Comp Services (Pvt) Ltd., and JR Management Consultants (Pvt) Ltd.

“It means when the electricity bill increases, his expenses increase as well”

He said the CEB still has a loss of 300 billion rupees since 2013 and it needs to be covered.

The CEB issue can be solved only in three ways, either printing more money, increasing value added tax or increasing the tariffm, he said. (Colombo/Dec08/2022)

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Sri Lanka President bemoans over inconsistent LNG deals

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe bemoaned over successive governments’ liquefied natural gas (LNG) deal that has brought in all the world powers into the discussion.

Wickremesinghe’s center-right United National Party (UNP) had discussions with India and Japan between 2002-2004 for an LNG project.

“Following dialogues with India and Japan, the UNP government could come to agreements to get two LNG power plants. After we were defeated the successor government, without cancelling those agreements granted it to New Fortress company in USA,” Wickremesinghe told the parliament.

“Thereafter, as they did not like New Fortress, they gave it back to Pakistan and China. So within the same premises, there were China, Pakistan, India, USA, Japan and only Russia was not there.”

“It was wonderful that a world war did not ignited there as there were five main powers in the world.”

“Now there is no LNG or anything here and now they ask me to solve this issue.”

Wickremesighe’s outburst comes as his government is forced to raise tariffs on power prices after successive governments failed to implement cheap and renewable power generation projects.

He said a total loss for the state-run Ceylon Electricity Board since 2013 was 300 billion rupees and a possible drought next year could increase the 2023 electricity cost to 420 billion rupees.

“If it rained, we need Rs. 352 billion while Rs. 295 is required if rained so much to have floods. How are we going to find this money? We would have to print money, but Rupee would depreciate. We would have to increase VAT but it would increase the price of all commodities or to charge it direct.” (Colombo/Dec08/2022)

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Air quality drop forces Sri Lanka to close schools; public warned

ECONOMYNEXT – A rapid drop in air quality in Sri Lanka has forced the Colombo government to close all schools across the country after a deep depression over Southeast Bay of Bengal, officials said.

The Education Ministry, issuing a special notice on Thursday said, it has decided to close all government schools for Friday, after discussing with the officials in Meteorology Department and Disaster Management Center.

An official said the drop was due to the deep depression over Southeast Bay of Bengal carrying the air from India.

Due to the depression over South east Bay of Bengal (370 km east of Trincomalee) has concentrated into a cyclonic storm “Mandous” by Wednesday night.

“Cyclone in the Bay of Bengal that is the prime reason for the increase in the pollution load as we receive more wind from India,” H.D.S.Premasiri, Senior Scientist, Coordinator-Air Quality, noise and vibrations at National Building Research Organization (NBRO) told EconomyNext on Thursday.

Officials said there is a likelihood of the cyclone moving west-northwestwards and further intensify into a severe cyclonic storm tonight and cross North Tamil-Nadu, Puducherry and South Andhra Pradesh coast around midnight of 09 th December and the maximum wind speeds will be 70-90 km per hour and can increase up to 90 in sea areas.

“Hopefully, today we can expect normalization in the environment and the effects of the fog will disappear”.

According to the NBRO’s real time Air Quality Index Indicator, the quality of air in northwestern coastal district of Puttalam has dropped drastically and indicated a particular matter (PM) 132, while Kegalle (85) and Mannar (84) were the districts which had next worst air quality.

According to NBRO, Battaramulla, Polonnaruwa, Dambulla, Kegalle, Mannar and Puttalam indicate a poor quality of air due to higher PM.

“The fog will lead to lung and breathing issues,” Premasiri said.

“So the public is warned to wear a mask when they travel outside. The pollution highly prevails in city areas and has a less impact on the other parts of the areas.” (Colombo/ Dec08/2022)

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