Dossier

Customs in the face of COVID-19: the case of Sri Lanka

By Sunil Jayaratne, Additional Director General, Sri Lanka Customs

The first positive coronavirus case in Sri Lanka was reported on 3 March and by 8 May nearly 820 people were found to be infected out of a 22 million population. On 16 March a wide curfew was imposed on the island, followed by other stringent measures to protect the further spread of the virus. This strategy enabled the government to keep fatalities at a single digit. Many activities were shut down while others had to adapt. The Colombo Tea Auction, the world’s oldest operational and largest single-origin tea auction, was conducted for the first time on an e-platform. Sri Lanka Customs (SLC) also had to leverage digital tools and find practical solutions to ensure the continued movement of cargo while applying government rules to avoid the spread of the virus. This article explains the various measures taken by the administration to respond to what is an unprecedented global health crisis.

Lower trade volumes

The Port of Colombo, the island’s main entry point, benefits from a unique geographic location and Sri Lanka’s ambition to make it an important hub for international trade. According to the Sri Lanka Ports Authority (SLPA), in 2019, 5.9 million Twenty-Foot Equivalent Units (TEUs) entered the Port in transhipment, and 1.3 million TEUs were imported or exported.

As Sri Lanka Customs collects 57% of state tax revenue, international trade is a key revenue source of the country. But, as everywhere else, trade flows plunged during the country’s lockdown, especially at the Port. On a daily average, Customs used to clear 1,200 full container loads (FCLs) at import and process around 525 FCLs at export. These numbers have dropped to 524 at import and 220 at export. Overall, there was a drop of 24% in the number of maritime containers at import, export, and transhipment.

A COVID-19 Contingency Plan was soon developed. It introduced new working hours. To help and inform traders, working schedules of the various units and the contact numbers of their heads were published on the SLC website (www.customs.gov.lk). Necessary arrangements were made with the Sri Lanka Police in order to provide curfew passes to Customs staff, transporters, Customs House agents, and other key personnel.

Given the low volume of exports due to most factories being closed for operations following government contingency measures, which recommended the minimization of human gatherings, the working hours of Customs services dealing with exports, which used to be accessible 24/7, were reduced to approximately 8 hours per day. However, Customs staff remained “on-call” and, if needed, had to report for duty.

Customs services in charge of imports managed to keep a good workflow. Around 95% of containers are being released, approximately, within half a day. In comparison, in 2018, when the latest Time Release Study was conducted, the average time taken to clear a maritime container was 16.5 hours, and 75% of FCLs were cleared within 24 hours.

Staff and public health and safety first

Consequent to the 2004 tsunami, the government of Sri Lanka had made significant changes to its disaster management systems, and the SLC and other agencies involved in the border clearance process had been reviewing procedures and mechanisms to face such events more efficiently (see WCO News, 78th edition).

When the Presidential Task Force on COVID-19 was set up to monitor and prevent the spread of the disease, and ensure essential services were provided to sustain overall community life in the country, the SLC was naturally asked to join.

To protect Customs staff, the following steps were taken:

  • Strict instructions were issued in order to minimize human gatherings and maintain social distancing in order to contain contamination.
  • The number of staff deployed was kept to a minimum with only 20% of the normal workforce of 2000 having to come to work.
  • Instructions were issued to the rest of the staff to continue their duties by connecting virtually from their homes using their personal computers (this is the first time that officers were asked to operate from their homes in Customs’ history).
  • Sanitizing facilities, including wash basins and foot baths, were installed in front of all office entrances.
  • Protective gear (face masks, hand gloves, sanitizers) were provided to the staff, especially those at the airport.
  • A disinfecting chamber was first established at the entrance to the Customs Headquarters before being removed, following the directives of medical specialists who expressed concerns that the usage of a 75%+ alcoholic spray within the chamber could become flammable, which resulted in the introduction of alternative methods for disinfecting and sanitizing purposes at Customs Headquarters and all other Customs premises.
  • Infrared thermometers were provided to allow Customs officers to check the body temperature of visitors.

Paperless processes

The SLC has started a modernization process, which includes the implementation of the provisions and procedures contained in the WCO Revised Kyoto Convention and the WTO Trade Facilitation Agreement as well as the implementation of paperless procedures.

The SLC has been using ASYCUDA for more than two decades to process declarations and a fully-fledged online e-payment platform since 2017. To further digitalize the process during the crisis, trade operators can now submit scanned copies of other supporting documents such as invoices.

In addition, regulatory approvals issued by other government agencies, such as the Sri Lanka Standards Institute, plant and animal quarantine services, the food inspector service, and national medicinal regulatory approval, can be sent to an online platform to which Customs has access. Submission of manifests, delivery orders, and other shipping documents is also done electronically.

Moreover, the Customs requirement to produce an original paper certificate of origin was deferred for a reasonable period, depending on the situation of the issuing country.

Relief and essential supplies

Although the number of trade operations decreased, new working constraints could have negatively impacted the capacity of Customs to process transactions. As such, there was a need to ensure that importations of relief and essential commodities were not only processed quickly, but also facilitated.

Putting into practice the lessons learned during colossal disasters such as the tsunami in 2004, the SLC, in collaboration with other concerned agencies, identified relief and essential supplies, and published a list of such goods with their HS codes. Priority was given to these goods for clearance, and the declaration requirements were simplified. Relief goods and donated medical equipment were exempted from taxes and duties, and the tariff rates of some items such as face masks were reduced.

The information was published through the government gazette notifications and circulated among officers timely. The administration also communicated the most significant tariff changes via its website (www.customs.gov.lk) as well via the recently established Customs enquiry point and help desk.

Customs also acted diligently to release good considered as essential to sustain overall community life in the country. Accordingly, the following measures were put into action:

  • Dog-handler teams from the Sri Lanka Police’s Narcotics Bureau were deployed for the examination of essential goods being imported from high risk countries.
  • Routine cargo selectivity criteria were tailored to release medium and low risk cargo with minimum or no Customs intervention. As a result, around 70% of importations selected for examination through non-intrusive cargo scanning equipment were released without inspection.
  • Verifications of the authenticity of licences, standards, and permits were coordinated via electronic means to ensure expedited release, and final clearance of some of the importations requiring such documents was put on hold and will be subject to post clearance audits.
  • Measures were taken to facilitate routine referrals to regulatory agencies. For example, unless indispensable, the debiting[1] of import control licences by the Control Department was temporarily stopped in order to save time.
  • Prompt actions were taken to facilitate requests made by foreign missions, especially relating to the expediting of essential exports.
  • Provisional online procedures were introduced to verify certificates of origin and grant preferential tariff treatments to countries with whom Sri Lanka had signed Preferential Trade Agreements (PTAs) such as with countries of the South Asian Association for Regional Corporation (SAARC). In this particular case, in order to ensure consistent implementation of the FTA, a webinar was organized by the SAARC Secretariat with the participation of all the administrations of the SAARC countries; Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.
  • Penalties on late reporting of manifests or other documentation were waved as well as port/airport demurrage charges at the request of traders. The latter required coordination with the SLPA, private container terminal operators, and air cargo authorities.
  • In addition to the regular Customs Enquiry Point, a special 24/7 help desk was established to attend to stakeholder inquiries.
  • As already indicated, the working hours and contact details of all Customs offices across the entire services spectrum (import, transshipment, export, parcels, passengers, industries, services, etc.) were published online.

Supporting the economy and supply chain continuity

If at the beginning of the lockdown, priority was given to the clearance of items listed as essential, Customs progressively started processing other transactions, including the importation of raw materials or semi-manufactured goods to be processed for re-export under the inward processing procedure. To speed up the processing of applications, a Standard Operating Procedure (SOP), which is a set of step-by-step instructions, was put in place, and requests and inquiries were attended to diligently via email to ensure the manufacturing industry was disturbed as little as possible.

The SLC also assisted the SLPA to clear spaces adjacent to cargo unloading bays in order to increase the efficiency of unloading goods from vessels as, although the number of containers was decreasing, many importers could not pick up their goods. In order for them not to be penalized, the SLPA, private container terminal operators, and air cargo authorities agreed to waive port/airport demurrage charges at the request of traders.

Handling passengers

Bandaranayake International Airport is Sri Lanka’s main international airport. As most flights to and from the island nation have been suspended since 19 March, the number of passengers dropped drastically to around 50 inward and 150 outward passengers.

Customs staff were still allocated to ensure expedited clearance and control of passengers and their luggage in accordance with the protection measures stipulated by the government. Departing passengers were mainly foreign nationals, mostly tourists, for whom special flights were arranged. Arriving passengers were mainly Sri Lankan nationals who were brought home on specially arranged flights, and who were then referred to specially established quarantine centres.

The clearance depots for Unaccompanied Passenger Baggage (UPB) – i.e. the sender and receiver of the baggage are the same person and it may be cleared under the duty free allowance provisions – were shut down at the initial stage. Indeed, some passengers were unable to return to the island and even receivers were unable to present themselves at Customs offices to collect goods on behalf of their relatives due to the curfew. Customs resumed clearances from 20 May, once the curfew had ended, and UPB could be released at a nominal fee to the authorized person nominated/appointed by the sender. Some private sector companies were also allowed to provide door-to-door delivery.

Cooperation with the private sector

The SLC held regular meetings with private sector stakeholders in order to provide remedies for the issues faced by them, which resulted in some COVID-19 measures being changed accordingly. For example, paper Customs declarations were accepted when importers or brokers were not familiar with the paperless process, cooperation was sought with Inland Clearance Depots or dry port administrators to facilitate the clearance of goods, and a solution was found with UPB warehouse handlers to allow them to deliver the baggage of passengers unable to return to Sri Lanka to an address provided by the passengers in question.

Stronger after the crisis

The current COVID-19 crisis has inculcated numerous lessons for the SLC as well as other authorities worldwide, and we believe we will come out stronger, bolstered by the lessons learned.

More information
http://www.customs.gov.lk

[1] Import control licences are issued for a specific quantity and time period. Each time an operation covered by the licence takes place, the quantities of goods are deducted from the granted quantity in order to maintain the balance for control purposes.