Friday Nov 15, 2024
Friday Nov 15, 2024
Thursday, 16 December 2021 00:29 - - {{hitsCtrl.values.hits}}
By T. Farook Thajudeen
Court of Appeal judges Sobitha Rajakaruna and Dhammika Ganepola yesterday issued notices and ordered the respondents to file objections on or before 5 January 2022, whilst ordering the petitioners to file counter objections in court on or before 7 January.
The judges issued these orders when the case filed by the Bar Association of Sri Lanka (BASL) sought an order to quash the decision of the Central Bank Governor to issue an Extraordinary Gazette over the conversion of foreign currency earnings into Rupees.
BASL President Saliya Pieris PC and Deputy President Anura Meddegoda PC had filed this petition naming Finance Minister Basil Rajapaksa, Central Bank Governor Ajith Nivard Cabraal and the Monetary Board of the CBSL as respondents.
The petitioners pointed out that members of the legal fraternity practising law in Sri Lanka provide professional services to persons within and without Sri Lanka. In providing such services the person residing outside Sri Lanka derives the benefit of their professional fees, both in local and foreign currency to the members of the legal fraternity, they added.
Whereas professional fees are made in foreign currency for the services provided by its member/s within or outside Sri Lanka, such foreign currency is remitted to and deposited in Personal Resident Foreign Currency Accounts (PRECA), Special Deposit Accounts (SDA) or other permitted accounts, in licensed commercial banks in Sri Lanka, without conversion into Rupees.
The petitioners stated that the entirety of their professional fees for services provided to a person residing outside Sri Lanka and derived in foreign currency was for the entirety of services provided as a professional and could by no stretch of imagination be described as ‘Repatriation of Export Proceeds into Sri Lanka’.
The petitioners claimed that the subject of regulation of foreign exchange was vested entirely in terms of the Foreign Exchange Act upon the Finance Minister.
The role of the Central Bank in respect of foreign exchange regulation is limited to acting as the agent of the Government in terms of directions issued on that behalf by the Minister of Finance, they added, which the Monetary Board is statutorily bound to cause such directions to be carried out.
The petitioners stated that the role of the Finance Minister in the regulation of foreign exchange under the Foreign Exchange Act was distinct and different from the role of the agent of the Government and the Central Bank under the Foreign Exchange Act.
It was also pointed out that the Monetary Board has no role to play in the “regulation of foreign exchange” under the Foreign Exchange Act, as a matter of law.
