Govt. to allow areca nut re-exports with 35 % value addition
View(s):The Government is to allow re-export of areca nuts (betel) with 35 per cent value addition in order to prevent fraudulent activities of certain unscrupulous traders who are continuing this re-export racket taking advantage of the free trade agreements with India and Pakistan.
Sri Lanka Customs is losing around US$300,000 per metric ton of areca nut as a result of bringing large stocks of areca nuts into the country and mixed it with local betel nuts for re-export, Finance Ministry sources disclosed.
This fraudulent practice has been continued despite a ban on import of areca nut under the Temporary Importing for Export Processing scheme (TIEP scheme).
The smuggling of areca nuts from Sri Lanka to India under the cover of re-exporting has increased in recent times in connivance with corrupt politicians and errant officials in the country, the Parliamentary Committee on Ways and Means observed. It has suspected this re-export fraud due to a sudden increase in the export figures this year compared to the same period of last year.
The committee has been informed recently that large stocks of areca nuts were being imported from Indonesia, Malaysia and Myanmar at a low price of US$750-900 per ton, and massive profits gained by re-exporting those consignments as Sri Lankan areca nut to Pakistan and India.
Some unscrupulous traders and a few officials take advantage of the free trade agreements with India and Pakistan declaring areca nuts from Indonesia, Malaysia and Myanmar as originating from Sri Lanka.
Fake certificates of origin and undervalued invoices are submitted by such traders to take advantage of the concessional rates that apply to commodities produced by Sri Lanka in accordance with FTAs.
Around 100 such containers (1493 metric tonnes) were detained at customs creating problems for genuine exporters in the business, the committee revealed in its latest findings. Proposals related to export of locally processed areca nuts and import of areca nuts and re-export with added value were discussed by the Cabinet of Ministers several months ago.
An official committee headed by the President’s Senior Economic Adviser was appointed to study the facts and submit a report with recommendations.
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