Govt. plans to cap loopholes in Customs processes

The Government is looking to tackle loopholes in cargo clearance procedure and valuation system of the Customs Department with the aim of preventing fraudulent practices of some errant importers, high level official sources said. One such case is how a Chinese importer used the loopholes to import an item which came under an import ban.

Outdated clauses in the archaic Customs Ordinance enacted in 1869, problems in duty structures and the exploitation of uncertainty in countries of origin rules have all come under the government’s scanner, a senior public official with knowledge of the procedure revealed.

The attention of the administrative authority has been focused on the customs procedure following the issues which erupted in the clearance of containers piling up at the Colombo Port during the 52- day lockdown and curfew period.

It is said that the Customs valuation system is susceptible to misuse and is not consistently applied, an Import and Export Control Department’s senior official said stressing the need to streamline the cargo clearance procedure.

The clearing of over 40,000 containers piled up at the Colombo Port is almost nearing completion, a logistic official disclosed adding that Custom officers had faced great difficulties in preventing the release of cargo imported violating rules of origin norms and under invoicing etc.

The Customs Ordinance allows an importer to clear the imported goods provisionally from Customs custody pending a final determination on value, he said.

Taking advantage of loopholes in procedure and the delay in clearing shipments due to COVID-19 crisis, a Chinese super trade centre in Kollupitiya has managed to clear four containers of around 110,000 kilos of sticky rice despite the import restrictions on items such as rice, flour, sugar, liquor, and apparel products, the Business Times reliably learnt.

Chinese national Yu Ping, the owner of the trade centre, has allegedly misled the custom officers submitting a false commercial invoice from the supplier of the goods and Bill of Lading by cleverly altering the dates and details.

He was successful in proving that the order had been placed before the imposition of the import ban while settling relevant duty and other levies at reduced rates under invoicing, reliable sources revealed.

This Chinese super trade centre sells all essential commodities including rice and spices meeting the requirements of Chinese consumers in the island.

Yu Ping, the owner of the trade centre, with high political connections is also involved in various other businesses including large scale quarrying and making concrete tiles, official i nve s t i g at i o n s revealed.

Considering the high number of containers that are to be cleared every day during the COVID- 19 crisis, it is very difficult for Custom officers to check every single container, officials said.

That’s why, unfortunately, a lot of people rely on these odds to commit fraud and trick the system with no penalty, they added.