The government’s decision to suspend the import of 399 vehicles including 227 luxury vehicles with the approval of the Cabinet of Ministers has taken a new twist as the government is compelled to import these vehicles as the required vehicles have already been manufactured by the respective company according to specifications.
However, this was not a direct deal with the manufacturer as it was vested in an intermediary party called Toyota Tsusho Asia Pacific Pte Ltd in Singapore and the awarding of this tender had been carried out without following proper tender procedures, reliable sources revealed.
The government’s decision to suspend the import of 399 vehicles has also created unexpected critical problems for the leading local bank.
Although the decision to suspend vehicle imports was made on May 24, the LCs were in fact opened by Bank of Ceylon on April 29 on behalf of the Sri Lankan government, and these LCs are yet to be terminated.
On the other hand, the Bank of Ceylon which has opened the Letter of Credit is yet to cancel it and it is facing the threat of being black listed for default if it fails to abide by the rules relating to this matter, banking sector sources said.
Several leading bankers pointed out that any action to suspend the deals under this set up breaches Uniform Customs and Practice (UCP 600) regulations that govern international trade of banking.
Most of those LCs are basically insured by a foreign bank for payment default, they disclosed.
Under this set up, if the foreign suppliers shipped the consignment of cars and claimed their payment from the relevant foreign bank, then the local bank which has opened the LC would be black listed in international trade for defaulting, they claimed.
LCs have been opened in a leading local bank with the approval of state authorities in accordance with government guidelines of easing restrictions on restricted items considered on a case by case basis for the import of a limited number of vehicles even amidst import restrictions, they added.
The Cabinet of Ministers, once again has reversed its earlier decision on the directions of Prime Minister and Finance Minister Mahinda Rajapaksa against his own Cabinet proposal considering the Covid-19 situation in the country.
The decision was taken when the Cabinet, chaired by Prime Minister Mahinda Rajapaksa, convened via Zoom on May 24.
Local media revealed plans to import 399 vehicles including 227 luxury Land Cruiser SUVs under the Bank of Ceylon’s LKR 3.5 billion leasing facility despite the current ban on importing vehicles to Sri Lanka.
The letter of credit for the importation of these vehicles was opened on April 29.
Leasing facilities have been granted by the state-owned BOC to import 227 Nos of 2755cc 7-seater Land Cruiser Prados, 52 Nos of 6403cc Hino Cabs, 50 Nos of Hiace Ambulances, 69 Nos of Hilux double cabs & One Toyota Land Cruiser, the payment of which should be made in USD.