Trade facilitation breaking down barriers in international trade
Sri Lanka has undertaken key initiatives to facilitate trade and
transport over the years. Vital agencies in trading such as the Sri
Lanka Customs and the Sri Lanka Ports Authority have taken measures to
facilitate trade through automation and infrastructure expansion.
While acknowledging the initiatives by relevant agencies, Sri Lanka
still has a lot to achieve if it is to reach the facilitation levels of
Singapore which is often cited by policy makers and the private sector
to be the country's benchmark.
Trade facilitation priorities
The Institute of Policy Studies of Sri Lanka (IPS) recently concluded
a 'Trade and Transport Facilitation Audit'.
As part of the study, a survey was carried out among 121 stakeholders
in the country including key government agencies and the private sector
to find out the status of trade facilitation (TF) in the country and
This included exporters, importers, shipping lines, freight
forwarders, chambers and relevant agencies.
Some of the TF issues and priorities highlighted in the survey and a
stakeholder consultation meeting held recently were -
Publication and administration of policies: There is a need for
prompt and comprehensive publication of international trade related
Many said the availability of information, for example, in the
Customs website to be inadequate to get a comprehensive understanding of
the import and export and clearance processes in Sri Lanka.
Information provided in the Customs website was rated as 'average' by
a majority of the respondents, with the effectiveness of information on
changes in regulation, Customs duties and fees and charges identified to
Setting up and strengthening enquiry points: While there are inquiry
points in agencies such as the Customs, these are generally perceived to
be inefficient and difficult to access.
While the enquiry points at institutions could be strengthened, a
national enquiry point can function as a coordinating body between the
trading community and the regulatory bodies.
It can collect requests, direct them to relevant regulatory bodies,
compile their responses and inform the requesting party of the
At present, inquiries are often directed at the wrong agency as
traders are unaware of the relevant agency to address a specific issue.
Having an institutional mechanism to implement TF measures: There is
no agency which takes responsibility to implement TF measures.
However, the recently appointed National Trade Facilitation Committee
is expected to remove this vacuum and actively take up TF
recommendations that have been highlighted by stakeholders over a long
period of time at many fora.
Change of mindset and culture at Government agencies and the private
sector: While recognising the recent TF initiatives undertaken by the
relevant authorities such as the Customs, they do not function well in
practice mainly due to the lack of change in mindset to accept and adapt
to new ways of conducting business.
The need for the private sector to produce correct documentation
without resorting to irregular payments as a relatively easier means of
clearing goods was also highlighted.
Legal amendments to the Customs Ordinance: The Customs Ordinance is
over 200-years-old and certain provisions need to be amended to
facilitate the implementation of identified TF measures such as the
extension of the pre-arrival processing facility to all goods, whereas,
at present the facility is only available for perishable goods.
Trade related infrastructure: The need to improve quality and
efficiency of ports, roads, the quality of warehouses and the need to
reduce loss and damage to cargo are some the main trade related
For example, while acknowledging the improvements in infrastructure
in the recent past, the need to give a facelift to the Colombo Port with
modern equipment was highlighted by traders.
Problems such as congestion at the Colombo Port can be reduced if
more gates at the Port can be opened. At present, only 2-3 gates are
open for container traffic at any given time.
Having a non-judiciary review and appeal procedure: Seventy two of
121 respondents of the survey said that there is no non-judiciary review
or appeal procedure available if traders are not satisfied with a
decision taken by the Customs or any other border management agency.
However, according to the Customs, traders can appeal to the Director
General of Customs if they are not in agreement with decisions taken at
the operational level and then to the Ministry of Finance and Planning
under whose purview the Customs functions.
Having an Ombudsman who is specialised in Customs and tariff
regulatory matters that could assist the trading community to review and
appeal a particular decision taken by a regulatory authority can enhance
the transparency of the system.
Improving warehouse facilities: More than the inadequacy of warehouse
in terms of numbers, traders highlighted the lack of adequate facilities
at warehouses. Lack of proper storage racking systems, poor conditions
within, poor handling and inadequate security are some of the issues.
Use of ICT for exports and imports: A majority of 107 of the 121
respondents highlighted the need for a single window. Such a system is
needed to minimise human intervention in the trading process.
The need for electronic and online submission of customs documents
was also identified to be high. While the export process is almost
entirely automated, the import process is yet to be completely
The importance of trade facilitation has been recognised at the
multilateral level with the wrapping up of the WTO Trade Facilitation
Agreement in December 2013.
This Agreement will come into force once two-thirds of the WTO's 160
members (107 members) complete their ratification process.
Countries such as Hong Kong and China have already ratified the
Agreement. Many TF measures highlighted can be implemented at a
relatively low cost and are not contentious in nature.
Therefore, it is important that Sri Lanka pursues pertinent TF issues
without further delay and enjoy early mover advantages that these
The writer is a Research Officer working in the International
Economic Policy Unit at the IPS.
Note: This article is based on the findings of the study 'Trade and
Transportation Audit: Sri Lanka' carried out by IPS research staff Dr.
Janaka Wijayasiri, Suwendrani Jayaratne and Dharshani Premaratne.
It was written to mark International Customs Day which fell on