ECONOMYNEXT – Sri Lanka should not force people who have imported vehicles on third country letters of credit under an international practice, which are now blocked in the port, to re-export them, opposition legislator Harsha de Silva said.
Hundreds of used Japanese-made vehicles imported on third country LCs are stuck at port, but brand new vehicles brought on the same basis are allowed to be cleared, he said.
“Many people have taken bank loans to import these cars, others have taken EPF balances,” de Silva, who is chair of the parliament’s Committee on Public Finance, told parliament.
“Some have been brought from Japan, some from Australia, some from India. They are bought on irrevocable LCs. What will Trump say if say to revoke an LC from Chase bank? We should not say impractical things. Let’s find a solution.”
Sri Lanka has issued a regulation stopping the practice in 2013 but it has not been implemented until this year and people have imported them in good faith based on the practice, de Silva said.
In a further complication third country LCs are permitted for brand new vehicles, de Silva said.
It is not clear why third country LCs are not permitted for used vehicles.
Some of the used vehicles appeared to be very new, de Silva said, which have only a few miles on it creating more questions.
De Silva said the government should find a solution to clear the vehicles instead of forcing their re-export.
There was an international tendency for Japanese vehicles to be exported via trading hubs in Singapore, he said and the government should consider how to face the latest trends in global trade.
“They import vehicles in bulk and re-export them through different LCs,” de Silva. “What the government is saying is that unless the LC was issued in Japan (where the car was made) the vehicle cannot be cleared.
“Then why was it not implemented till now? Then there is the question why the rule does not apply to brand new vehicles. Why is there a different treatment?”
“If people have brought on good faith, the government should find a different solution. This is a big problem for middle class people in particular. (Colombo/July09/2025)
Continue Reading
