• Tightens rules for mandatory conversions
• Grants exemptions in respect of exporters registered as Strategic Development Projects under SDP Act

The Central Bank of Sri Lanka (CBSL) has issued new ‘Repatriation of Export Proceeds into Sri Lanka Rules for 2022’ which allows for authorised payments in foreign currency for several categories .

Under the Rules issued on Friday, exporters of goods and/or services will be authorised to make payments in foreign currency in several categories including payments of dividends declared to non-resident investors and/or payments of salaries to expatriate employees who are foreign nationals or dual citizens as permitted under the provisions of the Foreign Exchange Act No. 12 of 2017.

The other authorised payments are for outward remittances for current transactions related to the particular export of goods and/or services including one-month commitments and withdrawals in foreign currency notes or transfer of funds for travel purposes related to export of goods and/or services.

Payments in foreign currency will also be allowed for debt servicing expenses and repayment of foreign currency loans and accommodations obtained by the exporter of goods and/or services, where such foreign currency loan and accommodation is a permitted borrowing in terms of the Regulations, Orders and Directions issued by the Central Bank of Sri Lanka under the provisions of the Foreign Exchange Act No. 12 of 2017 or Banking Act No. 30 of 1988, as amended, including one-month loan commitments.

Payments in respect of making investments in Sri Lanka Development Bonds in foreign currency up to 10% of the export proceeds, so received and payments to local suppliers permitted under the provisions of the Foreign Exchange Act No. 12 of 2017 for the purchases related to the particular export of goods and/or services will also be allowed.

It will be mandatory to convert residual of the export proceeds into rupees upon utilising the proceeds only in respect of the above-mentioned authorised payments on or before the seventh day of the following month.

Exporters are mandatorily required to  receive the export proceeds in Sri Lanka, in respect of all goods exported and/or services provided outside Sri Lanka, within 180 days from the date of shipment or provisioning of services, as the case may be.

Immediately upon all and every receipt/s of export proceeds being received, all related documentary evidence on each and every receipt of export proceeds, in respect of every export of goods and/or services must be submitted to the respective Licensed Commercial Bank or a permitted Licensed Specialised Bank.

All licensed banks shall be required to monitor the receipts of export proceeds strictly and mandatorily and maintain all necessary documentary evidence relating to, or in connection therewith.

These Rules shall apply in respect of all and every export of goods and/or services, made on or after the effective date of these Rules, and shall also apply to the export of goods and/or services, made prior to the effective date of these Rules, where the 180 date from the date of the shipment of such goods or provisioning of services falls on any date after these Rules come into force.

The Monetary Board may, at its discretion, grant exemptions to any or all of the requirements under these Rules only in respect of exporters of goods and/or services registered as ‘Strategic Development Projects’ with the Board of Investment of Sri Lanka under the Strategic Development Projects Act No. 14 of 2008 on a case-by-case basis.

The new rules were published in the Gazette on Friday by CBSL Governor Ajith Nivard Cabraal. (CK)

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