to rate three banks
Fitch Ratings Ltd, the country's top rating agency, is currently
working on ratings for three of Sri Lanka's top banks and two corporates,
its CEO Ravi Abeysuriya said.
"Corporates are realising the importance of a ratings and we
are having some work now," he said. The agency has completed
22 ratings so far of which only nine have been announced including
Hatton National Bank.
12 companies including some banks are reluctant to go public with
the ratings as they are low ratings. That's not good for transparency
in the corporate sector."
had earlier planned to sell its local stake to Crisil, the Indian
ratings agency and negotiations were underway with a team from Crisil
doing a due diligence study in April, but the discussions broke
down as Central Bank authorities were unhappy over the Crisil proposal
to also offer consultancy and risk management services for corporates,
along with ratings. Market sources said Fitch has now dropped plans
to sell off its stake.
Anti-dumping law protects local industry
By Rajika Chelvaratnam
The new Anti-dumping and Countervailing Duties Act now being drafted
would offer more protection to local industries from cheap imports.
The Bill will codify certain provisions in the General Agreement
on Trade and Tariffs and the Agreement on Subsidies and Countervailing
It gives legal
backing for the investigation and imposition of anti-dumping duties
and countervailing duties with regard to products imported to Sri
Lanka for the first time.
"Other countries have been using their national legislation
to counter dumping activities. What we didn't have was the national
legislation which we have now," said Dr. Dayaratna Silva, Deputy
Director of the Department of Commerce.
The World Trade
Organisation agreement provides what is known as 'WTO sanctioned
Trade Remedial Actions' to protect domestic industries from unfair
trade practices by other member countries. However an agreement
would not be as binding as legislation.
The Bill will
confer powers on the Director General of Commerce to investigate
whether a product is being dumped, whether it is causing injury
to local industry and whether there is a 'causal link' between the
dumping and the injury caused. The investigation must evaluate all
relevant economic factors that have a bearing on the state of the
industry in question. The protection under the Bill will apply only
if there is material injury to the competing domestic market.
of Commerce has the expertise to handle any investigation and even
though the Bill authorises only the director to handle any complaints
of dumping there will be a separate division in the Department of
Commerce to handle the investigation together with the Director,
said Dr. Silva.
Up to now Sri
Lanka has had no protection from a company exporting to the domestic
market products at a rate lower than the price in the local market.
Such an action done systematically would eventually destroy the
home market and give a monopoly to the exporter, who can later begin
to sell the product at a higher price.
An anti-dumping action will empower the government to charge an
extra import duty in excess of bound duty rates on the particular
product from the exporting country in order to bring its price closer
to the 'normal value' or to remove the injury to domestic industry
in the importing country.
In the determination
of 'normal value' the Bill authorises the Director General to determine
the normal value of an investigated product on the basis of the
price paid for the product when sold for consumption in the domestic
market of the exporting country or the price paid for that product
in the importing country. The Bill also says that in the event there
is no comparable price in the importing or exporting country then
the normal value would be the price in which the product is sold
to a third country or the cost of production plus a reasonable amount
Under the draft
Bill it is possible for the injured industry to initiate an investigation
by a written application made to the Director General of Commerce.
All interested parties (whether for or against the application)
could also be joined in this application. However the number of
persons who support the application must constitute not less than
twenty five percent of the total production of the product in question.
It is also possible for the Director General to initiate the investigation
in special circumstances.
with the WTO, the Bill provides that anti-dumping investigations
are to end immediately in cases where the authorities determine
that the margin of dumping is insignificantly small, that is if
it is less than two percent of the export price of the product or
if the volume of dumped imports is negligible. It is negligible
if the volume of dumped imports from one country is less than three
percent of total imports of that product. This is in order to prevent
The Bill also
provides for the imposition of a duty on subsidies granted by other
countries. Therefore if a country offers a subsidy on a certain
product this would create a state of unfair competition to countries
that do not grant subsidies. This Bill will ensure that Sri Lanka
could impose a duty on products with subsidies in case there are
unfair trade practices by other countries affecting the Sri Lankan