Sri Lanka says air-sea entrepot trade possible
COLOMBO, Oct 02, 2014 (EconomyNext) – Sri Lanka will allow cargo transfers between ships and aircraft without the need to actually send the goods through a bonding warehouse in a bid to encourage entrepot trade, a senior Customs official said.
"Entrepot trade does not involve complex and difficult customs procedures and is free from all taxes and duties, while Country of Origin of the transhipped products will remain unchanged," said M M M Rishafy, Director of Customs.
"There are the only requirements; except with prior approval, entrepot trade goods may not undergo customs inspection. Cargo transfer from ship/aircraft to another without cargo actually being landed to a bonding warehouse is also possible."
Rishafy said the FoB (Free on Board) value of exports should exceed CIF (Cost, Insurance, Freight) of imports, with only simple processing such as repackaging and re-labelling involved.
Only a few items are prohibited such as narcotics and re-export of cloves, textiles and clothing.
Sri Lanka was ideal for entrepot trade in computer accessories, chocolates, chemicals, cosmetics, watches and even yarn especially for small and medium enterprises, he told a forum on entrepot trade organised by the Export Development Board.
In an effort to use its location between Asia and Africa Sri Lanka offered tax benefits under its commercial hub regulations for five activities – entrepot trade, off-shore business, front-end-services, headquarter operations, and logistics services.
In July 2103, the government declared Colombo and Hambanthota ports and the Mattala Airport as ‘free ports’ and three export processing zones in Katunayake, Koggala and Mirijjawila as bonded zones.
The island is trying to emulate the success of Singapore and Hong Kong as entrepot centres.