Regulations relaxed for shipment finalised before May 5; import licences for some products
The Finance Ministry has issued a gazette that, without completely banning the import of all agrochemicals, allows for some items to be brought in after May 6 this year subject to special import licence regulations.
The gazette also effectively permits any shipments of agrochemicals that were seaborne on or before May 5 to arrive, be cleared and distributed. In the chemical fertiliser, pesticide and other agrochemical sectors, sources expressed confusion at the development this week as they had been told a total ban would be imposed with immediate effect.
“We are waiting till Monday to clarify this with the Controller General of Imports and Exports and relevant authorities,” one private sector source said. “The directions are not clear cut.”
Gazette 2226/48 of May 6, signed by Mahinda Rajapaksa in his capacity as Finance Minister, is available on the website of the Department of Imports and Exports Control but is yet to be released via the Government Printer. It says the regulations shall only be applicable to the importation of goods which have a date of bill of lading or airway bill on or after May 6, 2021.
Meanwhile, the Department issued operating instructions to commercial banks stating, among other things, that: “Commercial banks shall not proceed with any payment in respect of the importation of items shipped on or after May 6, 2021, mentioned under regulation No 3 of Gazette Extraordinary No 2226/48 of May 6, 2021, without a valid Import Control Licence (ICL)”.
“Sri Lanka Customs shall not release the items which shipped on or after May 6, 2021, specified under regulation No 3 of the Gazette Extraordinary 2226/48 of May 6, 2021, without a valid Import Control Licence (ICL),” the letter, addressed to the Chief Executive Officers of commercial banks, states.
“There is no impediment to the clearing of any shipments from the port if they were seaborne before 6th May,” Imports and Exports Controller General T V D Damayanthi S Karunarathne, said. “Anything after May 6 must have a valid import licence.”
But both the gazette and the operating instructions contain chemicals listed by the HS codes with the letters “L” (for licence) and “B” (for banned) listed alongside. Some items, however, have neither. Also, the banned items included in the gazette are not contained in the list attached to the operating instructions. This has created confusion in the industry.
Allowed under licence are chemicals like transfluthrin (insecticide), thiobencarb (herbicide), fenamiphos (insecticide) and glyphosate; and fertilisers urea, ammonium sulphate and potassium sulphate. But banned are mixtures of ammonium nitrate with calcium carbonate or other inorganic non-fertilising substances, mixtures of urea and ammonium nitrate in aqueous or ammoniacal solution, etc.
The fertliser industry is expected to speak with the Controller General about a large shipment of around 30,000 tons of urea which was being loaded at the time the gazette was issued. A few smaller shipments were also affected, private sector sources said.
As for pesticides, a source from one company said the shipments that were arriving now had been ordered nearly three to four months ago for the Yala season that just started. Most entities also planned ahead for the Maha season because of delays anticipated in view of the global pandemic. Those consignments will now be cancelled.
“There will be scarcities in the Yala season and no supply during the Maha season,” he warned. “We have received directions from the Agriculture Ministry to look for alternatives but we have to see what is available in the global market to address the issues in Sri Lankan agriculture. To adopt changes also requires a little more time.”
President Gotabaya Rajapaksa announced last month that he intends to make Sri Lanka the first country in the world to completely stop the use of chemical fertliser. It cost Sri Lanka US$ 221mn in 2019 to import chemical fertliser, he said.