Sri Lanka Has to Enact Strategic Trade Control Act to be Competitive Logistics Hub

From left: Joint Apparel Association Forum Secretary General Yohan Lawrence, US Embassy Advisor EXBS Sarah Welsh,  Shippers Academy International founder and former NES Logistics Committee Chairman Rohan Masakorala, APL Logistics Sri Lanka Director Dileepa Dissanayake and Baz Logistics Sri Lanka and former ITC consultant Colombo CEO Rezvan Rasheed

• US Embassy Colombo and the Department of State’s Export Control and Border Security Program extend invitation to private sector for Singapore conference
• Delegates call on Government to enact laws and framework that were drafted in 2018/2019

The US Department of State (DOS), the US Department of Energy (DOE), the US Department of Commerce (DOC), and Japan’s Ministry of Economy, Trade, and Industry (METI) and Singapore Customs held a one-day strategic trade control workshop in August 2023.

The event highlighted the need for export control and border security requirements to handle products that can have dual usage of products and illicit trade. The US Department of State’s Export Control and Border Security (EXBS) Program in Colombo extended the invitation to Sri Lanka’s private sector delegation to understand the importance of the legislation which will benefit the country’s ambitions to be a well-recognised logistics hub in the region for trade and logistics.

The annual event provided an opportunity to network among senior Government representatives from Singapore, Malaysia, Thailand, Philippines, Japan, Germany, the European Union, and the United States as well as private sector experts. They shared a host of topics related to strategic trade law, export controls, customs regulations, supply chain security, sanctions, and compliance standards.

Some of the topics included: Illicit Procurement Trends and Red Flags; Case Studies in Compliance Failures; Conducting Internal Investigations and Audits; Detecting Risk and Reporting Self-Disclosures; Incorporating Technology to Support your Compliance Strategy and Customer, Supply Chain and Third-Party Screening Tools.

Manufacturers, exporters, logistics providers, freight forwarders, academics and researchers dealing with strategic goods or strategic goods technology attended the seminar.

Background on the development of STC Legislation for Sri Lanka and its importance for logistics

Sri Lanka›s efforts to date regarding strategic trade control legislation lead back to the initial motivation related to compliance with UNSCR 1540, which requires UN Member States to adopt and enforce effective laws prohibiting the proliferation of nuclear, chemical and biological weapons to non-state actors. It was highlighted in Singapore, that the non-proliferation community benefits of STC systems extend beyond compliance with 1540 (as important as that is) and include bolstering the integrity, security, and reputation of a country›s trading system so that it can become a trusted trading partner and shipping hub for advanced electronics and other proliferation-sensitive goods.

Over the last six years since 2017, a wide range of Sri Lankan Government officials have participated in seminars, expert consultations, and policy committees to advance the development of a comprehensive system of strategic trade controls (STCs).  Initial informational seminars included a Senior Policy Exchange Seminar in Washington, DC in 2017; a Non-proliferation 101 Executive Seminar in Colombo in 2017; and a Fundamentals of Strategic Trade Controls Seminar in Colombo in 2018.  Sri Lanka›s participation in these engagements was supported by the US Department of State’s Export Control and Border Security (EXBS) Program.

In 2019 the cabinet approved the formation of a Technical Committee with responsibility for developing a control list and a Legislative Committee with responsibility for drafting legislation and implementing regulations. The staff of the Import Export Control Department worked diligently to develop a draft Strategic Trade Management Act in consultation with international experts (supported by the EXBS Program) to examine comparative approaches to institutional structures, operational roles and responsibilities, and other key issues.  The draft legislation has been reviewed by the Legal Draftsman and is being circulated to other stakeholders for comments.  The EU Dual-Use Control List, which has been adopted as a national control list by more than two dozen countries including Malaysia, Philippines, Singapore and Thailand, has been translated to the tri-languages.

Concurrently, the EXBS Program has also supported workshops on the operational aspects of implementing a strategic trade control system, including licensing, targeting, risk management, interdiction, and other enforcement functions.  EXBS is also providing an open-source e-licensing software solution that will be transferred to the Import and Export Control Department (IECD) in phases over the next 18 months.  That system is designed to support strategic trade licensing operations as soon as Sri Lanka has adopted the necessary legal and regulatory framework.

Shippers Academy International Founder Rohan Masakorala, a delegate member, on behalf of the participants, pointed out that Sri Lanka needs to act fast to enact the legal and structural adjustments as pointed out for many years to be a globally recognised trading and logistics hub if we are to move into the next level in the international platform to compete in warehousing, shipping and logistics. 

“Location will not be sufficient if we don’t get our environment in line with international standards, best practices and an open conducive environment to gain trust of investors and traders and call on the Government to act fast on all these areas of importance to harness the full potential of the location,” Masakorala added. 

(Source: Daily Mirror)