Lanka customs: money talks!
true. Despite Sri Lanka’s Police force being crowned as the
most corrupt government institution in the latest survey done by
Transparency International, a visit to the country’s import
and export hub in Colombo port could definitely cast a cloud over
In the wake of
the reforms being introduced to both the country’s port and
Customs, including the advent of the Electronic Data Interchange
(EDI), we felt the need to assess the present realities on ground,
and judge for ourselves as to the extent which the proposed reforms
would help curb the current cargo delays.
pay the answer
Association of Clearing and Forwarding Agents Chairman M.S.M
Niyas said there was a need to remunerate Customs officers
at private sector wage rates, which would help in motivating
them to perform their tasks more efficiently without having
to resort to corrupt practices.
“We need to cultivate a culture that would instill
noble principles,” he said. There was an urgent need
to recognise and reward all honourable officers who refuse
The simplification of procedures as far as possible and
setting high license registration and renewal standards
for Clearing Agents, unnecessary examination of all goods,
and making channel selectivity criteria on a risk analysis
basis for examination of cargoes, can contribute to eliminate
delays and speed up cargo clearance.
“Our system today must be able to efficiently process
documents and release cargo within minutes, as that is the
pace in which world trade is moving at present.”
a short walk from the main entrance to the port is a building, almost
100 years old, belonging to the Sri Lanka Ports Authority, but shared
with the Sri Lanka Customs. On the first floor of this crumbling
building is the Customs Import Documentation Centre, which is popularly
known as the “Long Room’, partly because of the never
ending queue of clearing agents and partly because of the enormous
delays that the Customs takes in processing Custom Declaration forms.
‘Long Room’ is the first point of contact for a clearing
agent. The room has to be the most depressing site that one could
set eyes on. The area is relatively dark and gloomy and swamped
with hundreds of clearing agents, some scrambling to get their documents
processed before the scheduled close at 4.30pm, and others just
slovenly seated on chairs, waiting patiently for their documents
to be processed.
As I watched the proceedings, my attention was immediately diverted
by the outstretched hand of a Customs officer at the counter, who
casually took a one hundred rupee note from a clearing agent, before
attending to his Customs Declaration. My eyes lit up. I was not
too sure whether my eyes were playing tricks on me. As I coolly
watched the proceedings at the counter, every single clearing agent
was oiling the palm of the Customs officer with a hundred rupee
note, which was carefully put away in the officer’s drawer
before he paid any attention to the job at hand. I found it hard
to believe that such practices were the norm at the Customs. The
clearing agents in the queue had fistfuls of 100 rupee notes.
of Customs says.......
When asked about the wide scale corruption that is prevalent
in Customs at the moment, its director general, Sarath Jayatilake,
said that there was no need to oil the palms of Customs officers
if the importers had their documents in order. “Twelve
percent of all Custom Declarations are forged.”
went on to add that the Customs was not 100 percent clean,
but the reason why the Customs officers were taking bribes
was because they are offered such money in order to clear
goods of importers with faulty documents. Jayatilake was optimistic
that once the WTO Customs Valuation agreement comes in to
effect from January 2003 and the advent of the Electronic
Data Interchange (EDI), the Customs would be able to increase
its efficiency tremendously.
said that human intervention in cargo clearing would be reduced
considerably, increasing internal integrity and transparency.
“Automation in the Customs will eliminate the human
interaction between the clearing agent and the Customs officers,
thus curbing corruption and improving our efficiency to meet
with international standards.”
the initial processing is done, clearing agents begin to form another
queue, inside the Customs office, where certification and signatures
need to be obtained, from the relevant Customs officers. Of course,
the same procedure of corruption continues, with senior Customs
officers demanding a slightly higher rate than the officers at the
enter the interior of the Customs office, each authorised agent
is given a special ID, without which entry is strictly prohibited.
I understand that such measures have been taken to prevent visitors
to the port from entering the Customs office and exposing the realities
of its activities to the media. I didn’t have an ID, but I
relied on the saying that fortune favours the brave.
an undercover reporter, managed to pose off as a clearing agent,
and walked straight through with no questions asked by the three
security men posted at the entrance. Each Customs officer, be it
senior or junior, had their drawers opened, almost overflowing with
100 rupee notes.
office was terribly noisy with several clearing agents bargaining
with the Customs officer to reduce their fees. A senior Customs
officer, upon seeing my unfamiliar face, shut his over flowing drawer
in embarrassment. Believe it or not, I can safely vouch that except
for one or two persons, every other officer including the highest
ranking officer in the ‘Long Room’ is corrupt.
I climb down the stairs of the ‘Long Room’ in disbelief,
my eyes are immediately drawn towards a Customs yard in which seized
vehicles have been parked. I was told that these brand new vehicles
are seized, when the Customs has evidence that the goods were under
valued or were not imported with the correct documents.
vehicles ranged from brand new Suzuki Vitaras to 40 KIA Sephia’s
and a whole host of Japanese cars and vans. Some of the vehicles
were showing signs of rust due to the close proximity to the sea.
I learned that the Customs was not paying the SLPA any rent on acquiring
land for such purposes, and usually hold such vehicles for a maximum
of three years, after which they are sold through a public auction.
Once a vehicle is seized, the owner would usually abandon it due
to the decaying condition of the vehicle and the heavy Customs duty
and port charges which are payable on retrieval.
Once the initial documentation is completed, each consignment must
be inspected by the Customs to ascertain whether the goods match
the items that have been listed in the relevant documents. During
this process, Customs officials who inspect the goods usually demand
a sample of every consignment that is imported, which customarily
ends up being a gift. Having arrived at one of the warehouses at
around 4pm, in which LCL (Less than Container load)cargo was being
inspected, I was able to catch a glimpse in to the office premises
of some of these Customs officials, which were stacked high with
all types of goods including electrical appliances such as hair
dryers and mixers, which is taken for domestic use by these officials.
fact, when I visited Grayline, where the Customs inspects all FCLs
(Full Container Load) containers, I happened to overhear a telephone
conversation in where a high ranking Customs official was making
arrangements with a friend to hire a van to transport a Chinese
vase, which he had taken as a sample. He went on to explain to his
friend, that usually he managed to put all these samples in his
car, but the vase was unfortunately too large. Clearing agents told
me that a sample, once given to the Customs can never be retrieved,
unless an importer demands that it be given back, which then means
that the clearing agent has to once again allow money to do the
With the new WTO Customs valuation scheduled to be implemented by
Sri Lanka Customs in January 2003, in which, arbitrary and fictitious
customs values are to be outlawed, conforming to commercial realities,
visiting the red channel was an opportunity that would sadly be
missed by many. Currently, Customs can withhold any goods on any
suspicion, causing severe trade losses to the importer.
goods that end up going through the red channel extend from food
items to poly-seeds, and is proof of the amount of power that the
Customs wields. On the day I visited the port, a container of poly-seeds,
which is used to manufacture plastic chairs, was withheld by the
Customs on ‘suspicion’. However, the clearing agent
was given an option to pay Rs.4000 if he wanted the goods released
immediately, or face the wrath of the Customs.
realised the amount of mental anguish the Customs officers could
cause, the clearing agent had addressed the issue to the company
concerned, asking them to pay the relevant amount. However, the
company informed the agent that it would not pay the additional
amount, and would take up the matter with the Ceylon Chamber of
Commerce. The cargo still remains in the custody of the Customs,
and it appears that even the high profile chamber officials will
not be able to change an ancient culture. However, the WTO agreement
is expected to gradually abolish the process of detaining goods
for examination to determine values, allowing goods to be moved
out on a bank or corporate guarantee.
the port at 4.30pm was the most difficult part of my visit. The
line of container lorries leaving the port stretched to almost a
kilometre. The Customs levies an additional sum of Rs. 1,200 as
overtime on all containers that leave the port or its examination
points after 4.30pm. I’m told that 95 percent of all containers
leave the port or Customs examination points after 4.30pm, and therefore
are forced to make this additional payment. At the final point of
departure, each container is halted for approximately eight minutes,
at which point Customs verify the delivery document for the umpteenth
time, as to whether the container is carrying the correct consignment.
Given the impracticality and the absurdity of the endless questioning,
the clearing agent has to bribe the officer, and the eight minutes
is spent on negotiating the amount the officer should receive.
corruption at the Customs is somewhat mind boggling in this day
and age where traditional forms of generating efficiency have been
replaced by the use of technology. The fact is that these bribes
have a direct effect the prices of imports. Consider the amount
of bribes that are paid to each institution. It is also puzzling
as to how the efficiency of the Customs has not increased despite
the volume of bribes that is paid on a daily basis. A rough estimate
done by an industrialist states that Sri Lanka Customs earns Rs.900,000
in total overtime, and “speed money” amounts to another
Rs 1,100,000 a day alone, which roughly amounts to five billion
rupees a year. Sri Lanka is a nation that is heavily dependent on
imports, be it food and clothing or industrial raw materials. This
means that every single citizen in this country is paying a price