A new Customs Act is essential to modernise Sri Lanka’s trade processes and resolve long-standing inefficiencies in port operations, said President, Transportation and Plantation Sectors, John Keells Group, Zafir Hashim.
He said the present framework is outdated and has led to delays, corruption, and regulatory bottlenecks that hinder trade competitiveness. The Customs system needs comprehensive reforms focused on digitalisation, transparency, and accountability to keep pace with global standards.
One of the most pressing needs is the implementation of digital advance clearance systems, which would enable importers and exporters to submit documentation electronically before cargo arrival. By limiting physical interactions between traders and Customs officials, the risk of malpractices can be significantly reduced, while the clearance time will improve. Ports in leading trade hubs, such as Singapore and Dubai, have successfully adopted such digital frameworks, and Sri Lanka must follow suit to remain competitive.
Hashim said strong punitive measures must be introduced to combat fraudulent practices by traders and officials. Fraudulent documentation, misclassification of goods, and bribery erode revenue and create an uneven playing field for legitimate businesses. A zero-tolerance policy, backed by real-time audits and strict enforcement mechanisms, will deter malpractice and enhance trust in the system.
Customs should have a balanced focus between trade facilitation and generating revenue to the state. The mindset of only revenue generation at times can lead to disruption to trade efficiency. A balanced, open, transparent, and accountable system is necessary and beneficial for both the state and the trade.
The current incentive scheme should be changed from a pure revenue collection based scheme to one which is linked to revenue as well as other trade satisfaction metrics. Officers who contribute to faster clearance times, reduced trade costs, and improved compliance should be recognised, encouraging a performance-driven culture.
A new Customs Act is not only necessary — it is urgent. Without immediate reforms, Sri Lanka risks falling behind regional competitors such as India and Singapore which continue to streamline their port operations. A modern, technology-driven, and corruption-free customs system will boost efficiency, attract investment, and strengthen Sri Lanka’s position as a key maritime, logistics, and transshipment hub.
The backlog that was created due to the delay in cargo clearance at the Colombo Port this year, led to congestion at the Port and many vessels diverting to other regional ports depriving revenue to the Port and impacting the transshipment business of the port.
Following instructions from President Anura Kumara Dissanayake, clearance commenced easing congestion to a certain extent initially and then later to a complete normalisation of operations.
Ports and shipping sector experts said acquiring the land at Bloemendhal and Kerawalapitiya for port operations is vital to ease congestion but enhancing operation efficiency at the Customs is much more crucial to retain the Port’s transshipment status.
