15th August, 1953. - Central Bank of Sri Lanka...[ 15th August, 1953.] 1. This Act may be cited as the Exchange Control Act. 2. (1) The Central Bank of Ceylon shall, as agent of the

EXCHANGE CONTROL ACT 1

EXCHANGE CONTROL ACT

AN ACT TO MAKE PROVISION CONFERRING POWERS, AND

IMPOSING DUTIES AND RESTRICTIONS, IN RELATION TO

GOLD, CURRENCY, PAYMENTS, SECURITIES, DEBTS, AND

THE IMPORT, EXPORT TRANSFER AND SETTLEMENT OF

PROPERTY, TO AUTHORIZE THE CENTRAL BANK TO

ADMINISTER THE PROVISIONS AFORESAID, AND TO

PROVIDE FOR MATTERS CONNECTED THEREWITH.

[ 15th August, 1953. ]

1. This Act may be cited as the Exchange Control Act.

2. (1) The Central Bank of Ceylon shall, as agent of theGovernment, be responsible for carrying out the provisions of thisAct, and it shall be the duty of the Monetary Board to cause thoseprovisions to be carried out in accordance with such directions asmay from time to time be issued in that behalf by the Minister.

(2) The Monetary Board shall establish for the purposes ofthis Act a Department of Exchange Control of the Central Bank towhich the board shall have the power to appoint or assign suchofficers and servants as the board may consider necessary for thepurpose of carrying out the provisions of this Act; every such officeror servant shall, for the purpose of the application of the provisionsof the Monetary Law Act relating to officers and servants, bedeemed to be employed for the performance of duties under that Act.

3. Wherever by any provision of this Act any power, duty orfunction is authorised or required to be exercised or performed bythe bank, such power, duty or function shall be exercised orperformed, subject to the direction and control of the Governor ofthe bank, by the officer designated as the head of the Department ofExchange Control or on his behalf by any other officer designated asan assistant to him:

Provided, however, that any permission, which by any such,provision is authorised to be granted by the bank, may be granted onbehalf of the head of the department by an authorised dealer, if he isfor the time being empowered, by directions issued by the head ofthe department, to grant such permission.

ActsNos.24 of 1953,

35 of 1956,47 of 1957,17 of 1971.

LawsNos.14 of 1972,

39 of 1973,4 of 1977,

13 of 1977.

Short title.

Administrationof Act byCentral Bank.

Exercise ofpowers, &c.under the Act.

2 EXCHANGE CONTROL ACT

Any directions given by the head of the department under thissection may specify the circumstances in which and the conditionsand restrictions subject to which an authorised dealer may grant thepermission to which the directions relate.

PART I

GOLD AND FOREIGN CURRENCY

4. The Minister may authorise any commercial bank to actfor the purposes of this Act as an authorised dealer in relation togold or any foreign currency.

5. (1) Except with the permission of the Bank—

(a) no person other than an authorised dealer, shallin Sri Lanka buy, borrow or accept any gold orforeign currency from, or sell or lend any goldor foreign currency to, or exchange any foreigncurrency with, any person other than anauthorised dealer, and

(b) no person resident in Sri Lanka, other than anauthorised dealer, shall, outside Sri Lanka, buyor borrow any gold or foreign currency from, orsell or lend any gold or foreign currency to, anyperson other than an authorised dealer:

Provided that the preceding provisions of this subsection shallnot prohibit the sale and purchase at any post office in Sri Lanka, inaccordance with such directions as may be given by the bank inregard thereto, of any foreign currency in the form of postal ordersor money orders.

(2) Except with the previous general or special permission ofthe bank, no person, whether an authorised dealer or not, shall enterinto any transaction which involves the conversion of Sri Lankacurrency into foreign currency or foreign currency into Sri Lankacurrency at rates of exchange other than the rates for the time beingauthorised by subsection (3) of section 76 of the Monetary Law Act.

6. (1) The foreign exchange to which this section applies issuch foreign exchange (hereafter in this Act referred to as the“ specified foreign exchange ”) as may be prescribed.

(2) The bank may require any person in, or resident in, SriLanka—

(a) who owns or holds any specified foreign exchangeto offer it or cause it to be offered for sale to an

Authoriseddealers in goldor foreigncurrency.

Dealings ingold andforeigncurrency.[ § 2, Law 39of 1973.]

Surrender ofgold and ofspecifiedforeignexchange.[ § 2, 17 of1971.]


authorised dealer at a price determined by theMonetary Board, or

(b) who is entitled to assign any right to receive anyspecified foreign exchange to transfer such right tothe Deputy Secretary to the Treasury on payment ofsuch consideration as the Monetary Board may fix,

unless the bank consents to his retention and use of such foreignexchange or he disposes of such foreign exchange to any personwith the permission of the bank.

(3) If a person who has obtained the consent of the bank tohis retention and use of any gold or any specified foreign exchangeand has stated in an application for the consent that he requires itfor a particular purpose, no longer requires that gold or exchange forthat purpose, subsection (2) shall thereupon apply to him in relationto that gold or exchange as if the bank had revoked the consent.

(4) A person who acquires any gold or any specified foreignexchange from an authorised dealer shall be treated for the purposesof this section as if the bank had consented to the retention and useby him of that gold or exchange, and as if any statement made byhim in an application for that gold or exchange as to the purpose forwhich he requires it had been made by him in an application for theconsent of the bank to his retention and use thereof.

(5) Where a person has become bound under this section tooffer or cause to be offered any gold or any specified foreignexchange for sale to an authorised dealer he shall not be deemed tocomply with that obligation by any offer made or caused to be madeby him, if the offer is an offer to sell at a price exceeding thatauthorised by the Monetary Board, or without payment of any usualand proper charges of the authorised dealer, or otherwise on anyunusual terms.

(6) Where a person has become bound under this section tooffer or cause to be offered any gold or any specified foreignexchange for sale to an authorised dealer and has not complied withthat obligation, the Secretary to the Treasury may direct that thatgold or exchange shall vest in the Deputy Secretary to the Treasury,and where the Secretary to the Treasury so directs, it shall vest inthe Deputy Secretary to the Treasury free from any mortgage,pledge, or charge, and the Deputy Secretary to the Treasury shalldeal with or dispose of it in such manner as the Minister may direct,but the Deputy Secretary to the Treasury or any officer authorised inthat behalf by such Deputy Secretary shall pay to that person suchsum as he would have received for that gold or exchange if he had

[ § 2, 17 of1971.]

[ § 2, 17 of1971.]

[ § 2, 17 of1971.]

[ § 2, 17 of1971.]


sold it to an authorised dealer in pursuance of an offer made underthis section at the time when the vesting occurred. Any moneyrequired for any payment under this subsection is hereby chargedupon the Consolidated Fund.

(7) In any proceedings in respect of a failure to comply withthe provisions of this section, it shall be presumed, until the contraryis proved, that the gold or exchange in question has not been offeredfor sale to an authorised dealer.

6A. Except with the permission of the bank, no person shallhave in his possession any foreign currency.

PART IA

CONTROL OF FOREIGN ASSETS

6AA. (1) No person in, or resident in, Sri Lanka shall,except with the permission of the bank,—

(a) open an account with any bank or institutiondoing any kind of banking business outsideSri Lanka (hereinafter referred to as a“ foreign bank ”);

(b) continue to maintain, or operate on, anaccount which has already been opened inany foreign bank; or

(c) close an account with any foreign bank.

(2) Where an account maintained by a person in, or residentin, Sri Lanka with any foreign bank is closed, such person shall notdispose of the funds to his credit at such foreign bank at the time ofclosing of such account, except in accordance with such directions asmay from time to time be given to him by the Central Bank.

6AB. Every person in, or resident in, Sri Lanka who, on thedate of commencement of this Act, holds, or who, after such date,acquires by way of purchase, gift, testamentary disposition orotherwise, any foreign assets—

(a) shall, within one month of the commencement ofthis Act or the acquisition of the assets, as the casemay be, render to the bank a return in suchmanner and giving such particulars with respect tothe assets as may be prescribed; and

[ § 2, 17 of1971.]

Possession offoreigncurrency.[ § 3, 17 of1971.]

Accounts inforeign banks.[ § 4, 17 of1971.]

Foreignassets.[ § 4, 17 of1971.]


(b) shall not dispose of such assets or part thereof inany manner whatsoever except in accordance withsuch directions as may be given to him by thebank.

PART II

PAYMENTS

7. Except with the permission of the bank no person shall inSri Lanka—

(a) make any payment to or for the credit of a personresident outside Sri Lanka, or

(b) make any payment to or for the credit of a personresident in Sri Lanka by order or on behalf of aperson resident outside Sri Lanka, or

(c) place or hold any sum to the credit of any personresident outside Sri Lanka:

Provided that where a person resident outside Sri Lanka haspaid a sum in or towards the satisfaction of a debt due from him,paragraph (c) of this section shall not prohibit the acknowledgmentor recording of the payment.

8. (1) Except with the permission of the bank, no personresident in Sri Lanka shall, subject to the provisions of this section,make any payment outside Sri Lanka to or for the credit of a personresident outside Sri Lanka.

(2) Nothing in this section shall prohibit the doing ofanything otherwise lawful by any person with any foreign currencyobtained by him in accordance with the provisions of Part I of thisAct or retained by him with the consent of the bank.

9. (1) Except with the permission of the bank no personshall in Sri Lanka, and no person resident in Sri Lanka shall outsideSri Lanka, make any payment to or for the credit of a personresident in Sri Lanka as consideration for or in association with—

(a) the receipt by any person of a payment madeoutside Sri Lanka, or the acquisition by anyperson of property which is outside Sri Lanka,or

(b) the transfer to any person, or the creation infavour of any person, of a right (whether presentor future, and whether vested or contingent) to

Payments inSri Lanka.[ § 3, Law 39of 1973.]

Paymentsoutside SriLanka.

Compensationdeals.


receive a payment outside Sri Lanka or toacquire property which is outside Sri Lanka.

(2) Nothing in this section shall prohibit the making of anypayment in accordance with the terms of a permission or consentgranted under this Act.

PART III

SECURITIES

10. (1) Except with the permission of the bank, no personshall in Sri Lanka issue any security or, whether in Sri Lanka orelsewhere, issue any security which is registered or to be registeredin Sri Lanka, unless the following requirements are fulfilled:—

(a) neither the person to whom the security is tobe issued nor the person, if any, for whom heis to be a nominee is resident outside SriLanka, and

(b) the prescribed evidence is produced to theperson issuing the security as to the residenceof the person to whom it is to be issued andthat of the person, if any, for whom he is to bea nominee.

(2) The subscription of the memorandum of association of acompany to be formed under the Companies Ordinance by a personresident outside Sri Lanka, or by a nominee for another person soresident, shall, unless he subscribes the memorandum with thepermission of the bank, be invalid in so far as i t would onregistration of the memorandum have the effect of making him amember of the company, so, however, that this subsection shall notrender invalid the incorporation of the company, and if by virtue ofthis subsection the number of the subscribers of the memorandumwho on its registration become members of the company is less thanthe minimum required to subscribe the memorandum, the provisionsof the said Ordinance relating to the carrying on of business of acompany the number of whose members is reduced below the legalminimum shall apply to the company as if the number of itsmembers had been so reduced.

11. (1) No person shall, except with permission granted bythe bank, transfer any security, either on his own behalf or on behalfof any other person, unless—

(a) the holder of the security and, if the holder isa nominee, the person for whom he is acting asnominee, are resident in Sri Lanka; and

Issue ofsecurities.

Transfer ofsecurities andcoupons.


(b) the transferor has produced to the person towhom the security is to be transferred or hisagent such evidence of the facts aforesaid asmay be prescribed;

and no person shall, except with such permission as aforesaid,acquire any security, either on his own behalf or on behalf of anyother person, unless such evidence as aforesaid has been produced tohim or to his agent.

(2) No person shall, except with permission granted by thebank—

(a) transfer any registered security, either on his ownbehalf or on behalf of any other person, to anyperson resident outside Sri Lanka or to any personacting as the nominee of any person so resident, or

(b) transfer any bearer security, either on his own behalfor on behalf of any other person, unless the bank issatisfied that the person to whom the security is tobe transferred and, if that person is a nominee, theperson for whom he is to act as nominee, areresident in Sri Lanka.

(3) Except with the permission of the bank, no coupon shallbe transferred—

(a) in Sri Lanka, if either the transferee or the person, ifany, for whom he is a nominee is resident outsideSri Lanka;

(b) outside Sri Lanka, if either the transferor or thetransferee, or the person, if any, for whom thetransferor or the transferee is or is to be a nominee,is resident in Sri Lanka.

12. Except with the permission of the bank, no person shall,in Sri Lanka, and no person resident in Sri Lanka shall, outside SriLanka, issue any bearer certificate or coupon or so alter anydocument that it becomes a bearer certificate or coupon.

13. Except with the permission of the bank, no person in orresident in Sri Lanka shall do any act with intent to secure—

(a) that a security which is—

(i) registered in Sri Lanka, or

(ii) transferable by means of a bearer certificate inSri Lanka,

Substitution ofsecurities andcertificatesoutside SriLanka.

Issue ofbearercertificatesand coupons.


becomes, or is replaced by, a security registeredoutside Sri Lanka or a security transferable bymeans of a bearer certificate outside Sri Lanka, or

(b) that, in substitution for or in addition to any suchcertificate of title to the first-mentioned security asis in, or is or has been lost or destroyed in, SriLanka, a certificate of title to any other security isissued outside Sri Lanka.

14. Except with the permission of the bank, no personresident in Sri Lanka shall do any act with intent to secure thatcapital moneys payable on a security registered in Sri Lanka are paidoutside Sri Lanka, or that, where the certificate of title to a securityis in Sri Lanka, capital moneys payable on the security are paidoutside Sri Lanka without production of the certificate to the personmaking the payment.

15. Except with the permission of the bank, no personconcerned with the keeping of any register in Sri Lanka shall—

(a) enter in the register the name of any person inrelation to any security unless there has beenproduced to him the prescribed evidence that theentry does not form part of a transaction whichinvolves the doing of anything prohibited by thisAct, or

(b) enter in the register, in respect of any security, anaddress outside Sri Lanka, except for the purpose ofany transaction for which the permission of thebank has been granted with the knowledge that itinvolves the entry of that address, or

(c) do any such act in relation to the register asrecognises or gives effect to any act appearing tohim to have been done with the intent mentioned insection 13 or section 14, whether done by a personin or resident in Sri Lanka or not.

16. (1) Where the holder of a security is a nominee, then,except with the permission of the bank, neither he, if he is residentin Sri Lanka, nor any person resident in Sri Lanka through whoseagency the exercise of all or any of the holder’s rights in respect ofthe security is controlled, shall—

(a) do any act whereby he recognises or giveseffect to the substitution of another person asthe person from whom he directly receives his

Additionalprovisions asto nomineeholdings.

Duties ofpersonskeepingregisters.

Payment ofcapitalmoneysoutside SriLanka.


instructions unless both the persons previouslyinstructing him and the person substituted forthat person were, immediately before thesubstitution, resident in Sri Lanka and notelsewhere, or

(b) do any act whereby he ceases to be a personbound to give effect to the instructions ofanother person in relation to the security,unless the person who theretofore instructedhim is resident in Sri Lanka and not elsewhere.

(2) Where the holder of a security is not a nominee and isresident in Sri Lanka, then, except with the permission of the bank,he shall not do any act whereby he becomes the nominee of anotherperson in respect of the security, unless that other person is residentin Sri Lanka and not elsewhere.

(3) Where the holder of a security transferable by means of abearer certificate is resident in Sri Lanka and is a nominee for aperson resident outside Sri Lanka, then, except with the permissionof the bank, he shall not deliver the certificate into the possession ofany person, whether the delivery amounts to a transfer or not.

17. (1) This section shall apply to prescribed securities onwhich any capital money, dividend or interest is payable in anyforeign currency or as respects which the holder has an option torequire payment of any capital money, dividend or interest thereon inany foreign currency.

(2) Except with the permission of the Minister, no personshall, in Sri Lanka, and no person resident in Sri Lanka shall,outside Sri Lanka, acquire, hold or transfer any security to whichthis section applies or do anything which affects his rights or powersin relation to any such security.

(3) The bank may in writing direct any person resident in SriLanka by whom or to whose order a security to which this sectionapplies is held in or outside Sri Lanka to render a return to thebank, in such manner and within such period as may be specified inthe direction, giving such particulars with respect to that security asmay be so specified.

(4) The Minister may direct any person resident in Sri Lankaby whom or to whose order a security to which this section appliesis held in or outside Sri Lanka—

(a) to sell or procure the sale of the security, andthereafter to offer or cause to be offered the net

[ § 5, 17 of1971.]

Specialprovisions asto dealings inprescribedsecurities.[ § 5, 17 of1971.]


foreign exchange proceeds of sale to the bank,directly or through an authorised dealer; or

(b) to transfer the security to the Deputy Secretary tothe Treasury on behalf of the Government at a pricewhich in the opinion of the Deputy Secretary to theTreasury is not less than the market value of thesecurity on the date of the giving of the direction.

Any direction under this subsection may be given eithergenerally, with respect to specified securities and the holders thereofby notice published in the Gazette, or specially to any holder bynotice in writing.

18. (1) The title of any person to a security for which hehas given value on a transfer thereof, and the title of all personsclaiming through or under him, shall, notwithstanding that thetransfer, or any previous transfer, or the issue of the security, was byreason of the residence of any person concerned other than the first-mentioned person prohibited by the provisions of this Act relating tothe transfer or issue of securities, be valid unless the first-mentionedperson had notice of the facts by reason of which it was prohibited.

(2) Without prejudice to the provisions of subsection (1), thebank may issue a certificate declaring in relation to a security, thatany such acts done before the issue of the certificate as purport toeffect the issue or transfer of the security, being acts which wereprohibited by this Act, are to be, and are always to have been, asvalid as if they had been done with the permission of the bank, andthe said acts shall have effect accordingly.

(3) Nothing in this section shall affect the liability of anyperson to prosecution for any offence against this Act.

19. (1) This Part of this Act shall, with any modificationwhich may be prescribed in relation to any document mentioned insubsection (2), apply as if the document created, and were thecertificate of title to, a security (hereafter in this Act referred to as a“ secondary security ”).

(2) The documents referred to in subsection (1) are any letterof allotment which may be renounced, any letter of rights, anywarrant conferring an option to acquire a security, any depositcertificate in respect of securities, and such other documentsconferring, or containing evidence of, rights as may be prescribed.

20. (1) In this Part of this Act—

“ registered ” includes inscribed;

Validation ofcertaintransfers.

Application ofPart III tosecondarysecurities.

Interpretationof Part III.


“ registered in Sri Lanka ” and “ registered outsideSri Lanka ” mean respectively, registered in aregister in, and registered in a register outside,Sri Lanka;

“ a register ” includes any book, file or index inwhich securities are registered; and

“ holder ”—

(a) in relation to a security transferable by meansof a bearer certificate or to a coupon, includesthe person having physical custody of thecertificate or coupon:

Provided that where the certificate or couponis deposited with any person in a locked orsealed receptacle from which he is not entitledto remove it without the authority of someother person, that other person shall be deemedfor the purposes of this provision to have thephysical custody of the certificate or coupon;and

(b) in relation to a security which is registered inthe name of a deceased person, or of anyperson who, by reason of insolvency,unsoundness of mind or any other disability, isincapable of transferring the security, means theexecutor of the last will or the administrator ofthe estate of the deceased, the assignee of theinsolvent’s estate, or any other person entitledto transfer the security.

(2) For the purposes of any provision of this Part of this Actprohibiting the transfer of securities, a person shall be deemed totransfer a security if he executes any instrument of transfer thereof,whether effective or not, and shall be deemed to transfer it at theplace where he executes the instrument.

(3) The holder of a security or coupon shall be deemed forthe purposes of this Part of this Act to be a nominee in respect ofthat security or coupon if he is not entitled to exercise any rightrelating to that security or coupon except in accordance withinstructions given by some other person, and references in this Partof this Act to the person for whom the holder of a security orcoupon is a nominee shall be construed as references to the personwho is entitled to give instructions, either directly or through the


agency of one or more persons, as to the exercise of any rightrelating to the security or coupon and is not in so doing himselfunder a duty to comply with instructions given by some otherperson:

Provided that—

(a) a person shall not, by reason only that he has acontrolling interest in a body corporate, be deemed for thepurposes of this subsection to be enti t led to giveinstructions to that body as to the exercise of any rightrelating to any security or coupon of which that body isthe holder, and

(b) a person shall not be deemed to hold a security or couponas a nominee by reason only that he holds it as trustee ifhe is entitled to transfer the security or coupon withoutpermission from any other person.

PART IV

IMPORT AND EXPORT

21. (1) No person shall, except with the permission of thebank, import into Sri Lanka—

(a) any notes of a class which are or have at anytime been legal tender in Sri Lanka; or

(b) any such other notes as may be prescribedbeing notes issued by a bank or notes of aclass which are or have at any time been legaltender in any territory; or

(c) any gold.

(2) The bringing or sending into any port or other place inSri Lanka of any gold intended to be taken out of Sri Lanka withoutbeing removed from the vessel or aircraft in which that gold is beingcarried shall, for the purpose of this section, be deemed to be theimportation of that gold.

(3) In this section, “ note ” includes part of a note.

22. (1) No person shall, except with the permission of thebank, export from Sri Lanka—

(a) any Sri Lanka currency;

(b) any foreign currency;

Restriction onexport.

Restriction onimport.


(c) any Treasury Bills;

(d) any savings certificate expressed in Sri Lankaor any foreign currency;

(e) any gold;

(f) any of the following documents (including anysuch document which has been cancelled):—

(i) any certificate of title to a security andany coupon;

(ii) any policy of assurance;

(iii) any document certifying the destruction,loss or cancellation of any of thedocuments aforesaid; or

(g) any such article exported on the person of atraveller or in a traveller’s baggage as may beprescribed.

(2) In subsection (1)—

“ note ” includes part of a note;

“ security ” includes a secondary security; and

“ coupon ” shall be construed in accordance with themeaning of “ security ”.

(3) The Minister may by Order published in the Gazetteprovide that no goods shall, except with the permission of the bank,be exported from Sri Lanka to any destination specified in the Order.

(4) In granting permission under subsection (3) in respect ofthe exportation of goods for the purposes of sale, the bank shallsatisfy itself—

(a) that payment for the goods has been made to aperson resident in Sri Lanka by such means and insuch manner as may be prescribed in relation togoods of that class or description exported to thedestination, or is to be so made not later than sixmonths after the date of exportation; and

(b) that the amount of the payment that has been madeor is to be made represents such a return for thegoods as is in all the circumstances satisfactory inthe national interest:

Provided that the bank may direct that, in cases to which thedirection applies, paragraph (a) of this subsection shall have effect as

[ § 4, Law 39of 1973.]

[ § 4, Law 39of 1973.]


if for the reference to six months there were substituted a referenceto such longer or shorter period as may be specified in the direction,or as if the words “ or is to be so made not later than six monthsafter the date of exportation ” were omitted.

(5) Where, on the authority of permission granted undersubsection (3), a person is about to export goods from Sri Lanka andthe bank has reason to suspect that any declaration made by thatperson, in his application for the permission, as to the ultimatedestination of the goods is untrue in any material particular, thePrincipal Collector of Customs shall, on the advice of the bank,detain the goods until the bank is satisfied as to the truth of thatdeclaration and, if the bank is not so satisfied, the goods shall beforfeited and shall be dealt with or disposed of in such manner asthe Minister may direct.

(6) Where, at any time after the grant of permission undersubsection (3), the bank has reason to believe that the amount of thepayment that has been made or is to be made for the goods to whichthe permission relates is not in accord with paragraph (b) ofsubsection (4), the bank may direct the person holding the shippingdocuments relating to the goods to retain possession thereof untilsuch time as the person to whom the permission has been grantedhas made arrangements to receive as payment for the goods anamount which, in the opinion of the bank, accords with the aforesaidparagraph (b).

*(8) Any reference in this section to the destination of anygoods includes a reference to the ultimate destination thereof.

(9) The preceding provisions of this section shall be inaddition to and not in substitution or derogation of the provisions ofany other written law prohibiting, restricting or regulating theexportation of goods from Sri Lanka.

23. (1) The Customs Ordinance shall apply in relation toanything the importation or exportation of which into or from SriLanka is restricted by any of the provisions of this Part of this Actin like manner as that Ordinance applies in relation to articles theimportation or exportation of which into or from Sri Lanka isrestricted by any enactment; and section 24 of the Post OfficeOrdinance shall, in relation to any such things as aforesaid, haveeffect as though, for the words “ received from beyond seas ” andthe word “ imported ” occurring in that section, there weresubstituted respectively the words “ addressed to or received fromany place outside Sri Lanka ” and the words “ imported orexported ”.

* Subsection (7) is repealed by Law No. 39 of 1973.

Application ofCustomsOrdinance andPost OfficeOrdinance.


(2) Where anything in relation to which the CustomsOrdinance applies by virtue of subsection (1) is forfeited under thatOrdinance, such thing shall, notwithstanding any contrary provisionin that Ordinance, be dealt with or disposed of in such manner asthe Minister may direct.

(3) The importer or exporter of any such forfeited thing as isreferred to in subsection (2) may, in accordance with such directionsas may be given by the Minister either generally or specially in thecircumstances of any particular case, be paid in Sri Lanka currencyan amount not exceeding the value in Sri Lanka currency of thatthing.

(4) Payment to any importer or exporter under subsection (3)shall be made by the Deputy Secretary to the Treasury or by anyofficer authorised in that behalf by such Deputy Secretary; and anymoney required for any such payment is hereby charged upon theConsolidated Fund.

(5) In this section, “ importer ” and “ exporter ”, withreference to any postal article, mean respectively the addressee andthe sender of that article.

PART V

MISCELLANEOUS

24. (1) Except with the permission of the bank no personwho has a right (whether present or future and whether vested orcontingent) to receive any foreign currency, or to receive from aperson resident outside Sri Lanka a payment in rupees, shall do, orrefrain from doing, any act with intent to secure—

(a) that the receipt by him of the whole or part ofthat currency or, as the case may be, of thatpayment in rupees is delayed, or

(b) that the currency or payment ceases, in wholeor in part, to be receivable by him :

Provided that nothing in this subsection shall, unless the bankotherwise directs, impose on any person any obligation, in relation toany debt arising in the carrying on of any trade or business, toprocure the payment thereof at an earlier time than is customary inthe course of that trade or business.

(2) Where a person has contravened the provisions ofsubsection (1) in relation to any foreign currency or any payment inrupees—

Duty to collectcertain debts.


(a) the bank may give to him or to any other person inor resident in Sri Lanka who appears to the bank tobe in a position to give effect thereto such directionsas appear to the bank to be expedient for the purposeof obtaining or expediting the receipt of the currencyor payment in question, and,

(b) without prejudice to the preceding provisions of thissubsection, the Secretary to the Treasury may directthat there shall be assigned to the Deputy Secretaryto the Treasury the right to receive the currency orpayment or enforce any security for the receiptthereof.

25. (1) Where any statement or declaration has been madeunder any provision of this Act that any goods are to be sold outsideSri Lanka, no person who is entitled to sell or procure the sale ofthose goods shall, except with the permission of the bank, do orrefrain from doing any act with intent to secure—

(a) that such sale is delayed to an extent which isunreasonable having regard to the ordinarycourse of trade, or

(b) that, on such sale, any payment made for thegoods is not made in the manner indicated bythe statement or declaration.

(2) Where any permission or consent has been granted underthis Act subject to a condition providing that, or on the faith of anapplication stating an intention that, any goods should be importedinto Sri Lanka, no person who is entitled to procure the importationof those goods shall do, or refrain from doing, any act with intent tosecure that the importation thereof is delayed to an extent which isunreasonable having regard to the ordinary course of trade.

(3) Where in any such case as is specified in subsection (1)or subsection (2)—

(a) the goods have not been sold or imported asindicated by the statement, declaration, condition orapplication within the time thereby indicated or, ifno time is thereby indicated, a reasonable time or (ineither case) within such further time as may beallowed by the bank, or

(b) it appears to the bank that the goods cannot be soldor imported as indicated by the statement,declaration, condition or application,

the Secretary to the Treasury may give to any person who appears tohim to be in a position to give effect thereto such directions as

Duty not todelay sale orimportation ofgoods.


appear to him to be expedient as to the manner in which the goodsare to be dealt with.

(4) Without prejudice to the provisions of subsection (3), theSecretary to the Treasury may in any case to which those provisionsapply give directions that the goods shall be assigned to the DeputySecretary to the Treasury.

26. (1) Where a person—

(a) has made any payment which is prohibited bythis Act, or

(b) being bound under this Act to offer or cause tobe offered any specified foreign exchange to anauthorised dealer, has otherwise disposed ofthat exchange,

the Secretary to the Treasury may direct him to sell or procure thesale of any property which he is entitled to sell or of which he isentitled to procure the sale, being property which represents, whetherdirectly or indirectly, that payment or that specified foreignexchange, as the case may be, and may by the same or a subsequentdirection specify the manner in which, the persons to whom, and theterms on which the property is to be sold.

(2) Without prejudice to the provisions of subsection (1), theSecretary to the Treasury may in any case to which those provisionsapply give directions that the property shall be assigned to theDeputy Secretary to the Treasury.

27. (1) Where, under the preceding provisions of this Partof this Act, the Secretary to the Treasury has power to givedirections that any right to receive any currency or any payment inrupees or to enforce any security for the receipt thereof, any goods,or any other property shall be assigned to the Deputy Secretary tothe Treasury, the Secretary to the Treasury shall also have power todirect that the right, goods, or property shall vest in the DeputySecretary to the Treasury, and in any such case it or they shall vestin the Deputy Secretary to the Treasury free from any mortgage,pledge, or charge, and the Deputy Secretary to the Treasury shalldeal with or dispose of it or them in such manner as the Ministermay direct.

(2) Where, in pursuance of directions under the precedingprovisions of this Part of this Act, any right, goods, or property is orare assigned to the Deputy Secretary to the Treasury, or any right,goods, or property vests or vest in the Deputy Secretary to theTreasury in pursuance of directions given under subsection (1), the

Propertyobtained byinfringementof Act.

[ § 6, 17 of1971.]

[ § 6, 17 of1971.]

Provisionssupplementalto precedingprovisions ofPart V.


Deputy Secretary to the Treasury or any officer authorised in thatbehalf by such Deputy Secretary shall pay the net sum recovered bythe Deputy Secretary to the Treasury in respect of the right, goods,or property to the person making the assignment or, in the case ofany right, goods, or property vested in the Deputy Secretary to theTreasury under subsection (1), to the person, who, but for thedirections, would be entitled to the right, goods or property.

28. (1) Except with the permission of the bank, no personresident in Sri Lanka shall transfer to a person who is residentoutside Sri Lanka or is a nominee for a person resident outside SriLanka, any right to the sums assured by any policy of assurance, so,however, that where the person liable for the sums so assured makesany payment thereof to a person resident in Sri Lanka and notelsewhere, or makes with the permission of the bank, any paymentthereof to any other person—

(a) he shall not be bound to inquire as to theresidence of any person other than the personto whom, and (if it is not the same person) theperson to whose order, the payment is made;and

(b) the payment shall, to the extent of the sumspaid, discharge him from his liability under thepolicy, notwithstanding that the payment ismade to or to the order of a person who wasnot entitled thereto otherwise than by virtue ofa transfer prohibited by this subsection.

(2) Subsections (2) and (3) of section 18 shall apply inrelation to any transfer prohibited by this section as they apply inrelation to a transfer prohibited by this Act of a security.

(3) In this section, “ nominee ”, in relation to any policy ofassurance, has the same meaning as is assigned to it by subsection(3) of section 20 in relation to a security.

29. (1) Except with the permission of the bank, no personresident in Sri Lanka shall—

(a) settle, otherwise than by will, any propertyupon any trust under which an interest in thatproperty is conferred on a person who, at thetime of the settlement, is resident outside SriLanka, or

(b) exercise, otherwise than by will, any power ofappointment (whether created by will orotherwise) in respect of any property in favour

Settlements.

Transfer ofpolicies ofassurance.


of a person who, at the time of the exercise ofsuch power, is resident outside Sri Lanka.

(2) A settlement or an exercise of a power of appointmentshall not be invalid by reason that it is prohibited by this section,except so far as it purports to confer an interest in any property onany person who, at the time of the settlement or the exercise of thepower of appointment, is resident outside Sri Lanka.

(3) Subsections (2) and (3) of section 18 shall apply inrelation to a settlement or the exercise of a power of appointmentprohibited by this section as they apply in relation to a transferprohibited by this Act of a security.

(4) For the purposes of this section—

(a) any reference to sett l ing property includes areference to the making of any disposition, covenant,agreement or arrangement whereby the propertybecomes subject to a trust, or (in the case of aresettlement) to a different trust;

(b) a person shall be deemed to have an interest inproperty if he has any beneficial interest therein,whether present or future and whether vested orcontingent, or falls within a limited class of personsin whose favour a discretion or power in respect ofthe property is exercisable; and

(c) the expression “will “ includes any testamentarydisposition.

29A. No person shall operate or maintain any tourist, airlineor shipping service or carry on business as shipping agent or airlineagent except in accordance with such conditions and requirements asmay be imposed from time to time by the bank.

29B. No person in, or resident in, Sri Lanka shall performany prescribed service for a person resident outside Sri Lanka exceptin accordance with such conditions and requirements as may beimposed by the bank by Notification published in the Gazette.

29C. Notwithstanding anything contained in any otherprovision of this Act, a company (other than a banking company)which is not incorporated under any law in force in Sri Lanka orwhich is controlled directly or indirectly by any person or personsresident outside Sri Lanka, or any branch or office of any such

Tourist services,shippingagencies andairline agencies.[ § 5, Law 39 of1973.]

Prescribedservices to beperformed inaccordance withconditions andrequirementsimposed by thebank.[ § 5, Law 39 of1973.]

Restriction ofappointment ofcertaincompaniesand firms asagents ortechnical


company in Sri Lanka, or a firm consisting wholly or in part ofpersons resident outside Sri Lanka, shall not accept appointment as—

(a) agent in Sri Lanka of any person, company orfirm in the trading or commercial transactionsthereof; or

(b) technical or management adviser in Sri Lanka ofany person, company or firm,

except with the general or special permission of the bank; and wheresuch appointment is accepted without such permission, it shall bevoid.

30. (1) Where there is served on any person resident in SriLanka a notice in writ ing that the bank wishes any suchrequirements as are hereinafter mentioned to be complied with byany foreign company, and that person can by doing or refrainingfrom doing any act—

(a) cause the foreign company to comply with anyof the requirements; or

(b) remove any obstacle to the foreign companycomplying with any of the requirements; or

(c) render it in any respect more probable that theforeign company will comply with any of therequirements,

then, except so far as permission to the contrary may be given bythe bank, that person shall do or, as the case may be, refrain fromdoing that act.

(2) The requirements with respect to which a notice undersubsection (1) may be given are as follows, that is to say, theforeign company shall—

(a) furnish to the bank such particulars relating to theassets and business of such company as may bementioned in the notice;

(b) sell or procure the sale to an authorised dealer ofany foreign exchange mentioned in the notice, beingforeign exchange which it is entitled to sell or towhich it is entitled to procure the sale;

(c) declare and pay such dividends as may be mentionedin the notice;

(d) realise any of its assets mentioned in the notice insuch manner as may be so mentioned;

advisers in SriLanka.[ § 5, Law 39of 1973.]

Certainprovisionsrelating toforeigncompanies.[ § 6, Law 39of 1973.]


(e) refrain from sell ing, or transferring, or doinganything which affects i ts r ights or powers inrelation to, any such instrument or securities as maybe mentioned in the notice.

(3) Except with the general or special permission of thebank, no person resident in Sri Lanka shall do any act whereby anybusiness which is controlled by persons resident in Sri Lanka ceasesto be so controlled.

(4) Notwithstanding anything contained in any other law, notransfer of any interest in any business in Sri Lanka made by aperson resident outside Sri Lanka to any person also resident outsideSri Lanka shall be valid unless such transfer is confirmed by thebank on an application made to it for such confirmation by thetransferor or the transferee. The preceding provisions of thissubsection shall not apply to the transfer of any share in a company.

(5) Except with the general or special permission of thebank, no person resident in Sri Lanka shall transfer any interest inany business in Sri Lanka, or create any interest in any suchbusiness, to or in favour of a citizen of a foreign State.

(6) Except with the general or special permission of thebank, no person resident in Sri Lanka shall give a guarantee inrespect of any debt or any other obligation or liability of a personresident outside Sri Lanka.

(7) Except with the general or special permission of thebank, no person resident in Sri Lanka shall lend any money either toany firm or company (other than a banking company) which iscontrolled directly or indirectly by persons resident outside SriLanka.

(8) In this section, “ foreign company ” means a company notincorporated under any law in force in Sri Lanka and in the case ofwhich any of the following conditions is fulfilled:—

(a) that the company is by any means controlled (directlyor indirectly) by any person or persons resident in SriLanka; or

(b) that more than half of the sums which, on aliquidation thereof, would be receivable by holdersof share or loan capital, would be receivable directlyor indirectly by, or for the benefit of, personsresident in Sri Lanka; or


(c) that more than one-half of the assets which, on aliquidation thereof, would be available for distributionafter the payment of creditors or would be receivabledirectly or indirectly by, or for the benefit of, anyperson or persons resident in Sri Lanka; or

(d) that more than one-half—

(i) of the interest payable on its loans and loancapital, if any, or

(ii) of the dividends payable on its preference sharecapital, if any, or

(iii) of the dividends payable on its share capital, ifany, not being preference share capital,

is receivable directly or indirectly by, or for the benefitof, any person or persons resident in Sri Lanka.

For the purposes of this subsection, where the identity of theperson or persons by whom or for whose benefit, any sum, assets,interest or dividends are directly or indirectly receivable depends onthe exercise by any person resident in Sri Lanka of a power vestedin him in that behalf, the sum, assets, interest or dividends shall bedeemed to be receivable directly or indirectly by, or for the benefitof, any person or persons resident in Sri Lanka.

PART VI

SUPPLEMENTAL

*31. (1) Where any person applies for the permission of thebank for the making of a payment, or the placing of any sum, to thecredit of any person resident outside Sri Lanka, the bank may directthat the sum payable or to be credited shall be paid or credited to ablocked account only. Where such direction is given by the banksuch person shall pay or credit such sum to a blocked account.

(2) Where the bank directs that a payment shall be made to ablocked account only,—

(a) the manner in which the payment may be made shallbe either—

(i) to the banker, with a direction that the paymentshall be credited to a blocked account of theperson to whose credit the payment is made,which direction may, in the case of a payment

PART VA (containing sections 30A to 30H) is repealed by Law No. 13 of 1977.

Blockedaccounts.[ § 7, Law 39of 1973.]


by means of a cheque or warrant, be made bymarking the cheque or warrant with the words“ blocked account of ” (naming that person) orwords to the same effect, or

(ii) by a crossed cheque or warrant drawn in favourof that person, marked with the words “ payableonly to blocked account of payee ” or words tothe same effect; and

(b) the sum collected shall be credited by the banker toa blocked account of that person.

*(4) Any sum standing to the credit of a blocked accountshall not be dealt with except with permission of the bank.

(5) Where a person in whose name a blocked account isstanding is declared an insolvent under the law of Sri Lanka or dies,the banker may, notwithstanding anything in subsection (4), transferthe account to the name of the assignee of the insolvent’s estate orthe executor of the last will, or the administrator of the estate, of thedeceased, but, save as aforesaid, no change shall, except with thepermission of the bank, be made in the name in which the accountstands; and where any such change in made (whether or not thepermission of the bank is necessary therefor) the account shallremain a blocked account notwithstanding the change, and theprovisions of this section shall apply accordingly.

(6) Where—

(a) a sum is due from any person to any other personbut the bank directs that it shall be paid or creditedto a blocked account only, and

(b) the person to whom the sum is due nominates suchan account to the person from whom the sum is due,

the last-mentioned person shall be under a duty to the person towhom the sum is due to cause the sum to be paid or credited to thatblocked account, and the crediting of any sum to a blocked accountin pursuance of a direction of the bank shall, to the extent of thesum credited, be a good discharge to the person from whom the sumis due:

Provided that, in the case of a sum due under a contract, thepreceding provisions of this subsection shall not apply in so far asthe application of those provisions is inconsistent with the intentionof the parties to that contract.

* Subsection (3) is repealed and proviso to subsection (4) is omitted by Law No. 39 of1973.


(7) In this section—

“ blocked account ” means an account opened as ablocked account at an office or branch in Sri Lanka infavour of any person by a banker authorised by thebank to open blocked accounts, and

“ banker ”, in relation to any person, means a banker whoopens a blocked account in favour of that person.

32. (1) The Minister may by Order published in the Gazetteprovide that, for such of the purposes of this Act as may bespecified in the Order—

(a) any transaction with or by a branch of anybusiness, whether carried on by a bodycorporate or otherwise, shall be treated in allrespects as if the branch were a body corporateresident where the branch is situated, and

(b) the making of any book entry or otherstatement recording a debit against a branch ofany business in favour of any other branch ofthat business, shall be treated as a payment tothat other branch, and

(c) any property held by or on behalf of anyperson carrying on any business shall bedeemed to be held by such of the branches ofthat business as may be determined inaccordance with the Order;

and any such Order which makes, for any of the purpose of Part IIIof this Act, such provision as is mentioned in paragraph (c) of thissubsection may contain provisions declaring the circumstances inwhich a branch is to be treated as nominee for any other branch.

(2) Any reference in subsection (1) to a branch of a businessshall be deemed to include a reference to the head office of thatbusiness.

(3) Subsections (1) and (2) shall apply in relation to anybody of persons (whether corporate or unincorporate) carrying onany activity, whether for the purpose of profit or not, as they applyin relation to a business.

33. (1) It shall be an implied condition in any contract that,where, by virtue of this Act, the permission or consent of the bankis at the time of the contract required for the performance of anyterm thereof, that term shall not be performed except in so far as thepermission or consent is given or is not required:

Contracts.

Branches.


Provided that the preceding provisions of this subsection shallnot apply to that term in so far as the application of those provisionsto that term is inconsistent with the intention of the parties to thatcontract, whether by reason of their having contemplated theperformance of that term in despite of the provisions of this Act orfor any other reason.

(2) Notwithstanding anything in the Bills of ExchangeOrdinance, neither the provisions of this Act nor any condition,whether express or to be implied having regard to those provisions,that any payment shall not be made without the permission of thebank under this Act, shall be deemed to prevent any instrumentbeing a bill of exchange or promissory note.

34. Where any provision of any other written law imposes anobligation in respect of the doing of any act and the permission orconsent of the bank is, by virtue of this Act, required for thedischarge of the obligation, it shall be an implied condition of theobligation that it shall not be discharged except in so far as thepermission or consent is given or is not required.

35. (1) The provisions of Part 11 of this Act shall apply tosums required to be paid by any judgment or order of any court orby any award as they apply in relation to other sums, and it shall beimplied in any judgment or order of any court in Sri Lanka, and inany award given under the law of Sri Lanka, that any sum requiredto be paid by the judgment, order or award (whether as a debt, asdamages or otherwise) to which those provisions apply shall not bepaid except with the permission of the bank.

(2) Nothing in this Act shall be construed as preventing thepayment by any person of any sum into any court in Sri Lanka, butthe provisions of Part II of this Act shall apply to the payment ofany sum out of court, whether under an order of the court orotherwise, to or for the credit of any person resident outside SriLanka.

(3) In any insolvency proceedings, winding up of a company,or administration of the estate of a deceased person, carried on underthe law of Sri Lanka, a claim for a sum not payable without thepermission of the bank shall, notwithstanding that the permission hasnot been given or has been revoked, be admitted to proof as if thepermission had been given and had not been revoked:

Provided that nothing in the preceding provisions of thissubsection shall be construed as affecting the application of theprovisions of Part II of this Act to payments by the assignee of theinsolvent’s estate, or by the liquidator, or by the executor of the last

Obligationsunder otherwritten laws.

Legalproceedings,&c.


will, or administrator of the estate, of the deceased, or by any otherperson in such insolvency proceedings, or winding up, oradministration.

(4) The provisions of this Act restricting the making ofsettlements shall not apply to any deed of arrangement made for thebenefit of creditors generally, and the provisions of subsection (3)shall apply in relation to proceedings under any deed of arrangementas they apply in relation to insolvency proceedings.

(5) Where the permission of the bank is required under thisAct for the payment of a debt the amount of which is sufficientunder section 18 of the Insolvency Ordinance, to enable the creditorto petition for the sequestration of the estate of the debtor if thedebtor commits an act of insolvency, the debt may, notwithstandingthe aforesaid requirement, be allowed to be a good petitioningcreditor’s debt, if and to the extent that the debt can be satisfiedeither by a payment into court or by a payment to a blockedaccount.

36. Where a person resident in Sri Lanka leaves Sri Lanka,the bank may, before, at or after the time he leaves Sri Lanka, directthat, for such period as may be specified in the direction, paymentsby him or on his behalf and to him or to his credit and transactionsin or in relation to Treasury Bills, securities or secondary securitiesin which he is in any way concerned shall, whether or not hecontinues to be resident in Sri Lanka, be subject to such restrictionsas may be specified in the direction.

37. (1) Where any question arises as to the territory inwhich a person is or is not resident, the territory in which suchperson shall, for the purposes of this Act, be treated as resident ornot resident, as the case may be, shall be determined in accordancewith such general or special directions as may be given in thatbehalf by the Minister.

(2) For the purposes of this Act, the executor of the last willor the administrator of the estate of a deceased person shall, unlessthe Minister otherwise directs, be treated in respect of any matters inwhich such executor or administrator is concerned solely in hiscapacity as such, as resident—

(a) if directions given under subsection (1) apply in thecase of such deceased person, in the territory inwhich he is required by such directions to be treatedas having been resident; or

(b) in any other case, in the territory where at the timeof his death the deceased person was resident.

Personsleaving SriLanka.

Determinationof residence.


38. The bank may give—

(a) to bankers and to persons who are concerned withthe keeping of any register in Sri Lanka or areentrusted with the payment of capital moneys,dividends or interest in Sri Lanka, directions asrespects the exercise of any functions exercisable bythem by virtue of, or by virtue of anything doneunder, any provision of this Act, and

(b) to authorised dealers—

(i) such directions as aforesaid, or

(ii) directions as to the terms on which they are toaccept gold or foreign currency, or

(iii) directions requiring them to offer their gold orspecified foreign exchange for sale to theCentral Bank on such terms as may be set outin the directions.

39. (1) Without prejudice to any other provisions of thisAct, the bank may give to any person in, or resident in, Sri Lankadirections requiring him—

(a) to furnish, within such t ime and in suchmanner as may be specified in such directions,to the bank or to any person designated in suchdirections as a person authorised to require it,any information in his possession which thebank or the person so authorised, as the casemay be, may require for the purpose ofsecuring compliance with, or detecting evasionof, the provisions of this Act, or where suchperson does not have the information in hispossession, to obtain such information fromany such person in Sri Lanka or abroad as maybe specified in such directions and to furnishsuch information to the bank or to the personauthorised; or

(b) to attend in person before any officer specifiedin such directions at such place, at such dateand at such time as may be specified therein sothat he may be examined on any such matteror matters as may be specified in suchdirections.

(1A) Any person examined under the provisions of subsection(1) (b) shall answer truly all questions put to him by the officerexamining him.

Furnishing ofinformationand productionof documents.

[ § 8, Law 39of 1973.]

Directions tobankers,authorizeddealers &c.

[ § 7, 17 of1971.]


(2) A person required by any directions given undersubsection (1) to furnish information shall also produce such books,accounts or other documents in his possession or control as may berequired, for the purpose referred to in subsection (1), by the bankor by the person authorised to require the information, as the casemay be.

(3) Nothing in the preceding provisions of this section shallbe taken to require any person who has acted as counsel or attorney-at-law for any person to disclose any privileged communication madeto him in that capacity.

(4) Where a person is convicted for fail ing to giveinformation or produce any books, accounts or other documentswhen required so to do under this section, the court may make anorder requiring the offender, within such period as may be specifiedin the order, to comply with the requirements to give the informationor produce the books, accounts or other documents.

(5) In this section, “ bank ” includes any officer of theDepartment of Inland Revenue or Department of Customs generallyor specially authorised by the Monetary Board to exercise the powersconferred by this section.

40. (1) If the Head of the Department of Exchange Controlor any such officer who is designated as an Assistant to him or anysuch public officer not below the rank of Assistant to the Head of aDepartment of Government, as may be authorised by the Head of theDepartment of Exchange Control to act for the purposes of thissection is satisfied—

(a) that there is reasonable ground for suspectingthat an offence under this Act has been or isbeing committed and that evidence of thecommission of the offence is to be found atany premises or in any vessel, vehicle oraircraft or with any person; or

(b) that any books, accounts or other documentswhich ought to have been produced undersection 39 and have not been so produced areto be found at such premises or in any suchvehicle, vessel or aircraft or with such person;or

(c) that any foreign currency is to be found at anysuch premises or in any such vehicle, vessel oraircraft or with any such person,

[ § 8, Law 39of 1973.]

Search ofpremises.[ § 10, Law 39of 1973.]


the Head of the Department of Exchange Control or such officermay enter such premises or, as the case may be, any premises uponwhich the vehicle, vessel or aircraft or person may be, and searchsuch premises, or, as the case may be, such vehicle, vessel, aircraftor person.

(2) The Head of the Department of Exchange Control orsuch officer, as the case may be, may seize any article which isfound in the premises or in the vehicle, vessel or aircraft or with theperson and which he has reasonable grounds for believing to beevidence of the commission of any offence under this Act, or anybooks, accounts or documents which he has reasonable grounds forbelieving ought to have been produced under section 39:

Provided that no female shall, in pursuance of a search underthis section, be searched except by a female.

(3) Where by virtue of this section a person has any powerto enter into any premises, he may use such force as is reasonablynecessary for the purpose of exercising that power.

Where by virtue of this section, an officer has power to searcha person, such officer may examine such person, and such personshall answer truly all questions put to him by the officer examininghim.

(4) No person shall obstruct any other person in the exerciseof any powers conferred on that other person by virtue of thepreceding provisions of this section.

(5) Any person empowered to do any act under this sectionmay, if he thinks fit so to do, obtain the assistance of a peace officerfor doing such act.

41. (1) Any article seized by any authority under or byvirtue of this Act which the authority has reasonable ground forbelieving to be evidence of the commission of an offence againstthis Act may be retained for a period of three months or, if withinthat period there are commenced legal proceedings in respect of suchan offence in which the article is, or can properly be, adduced inevidence, until the final determination of those proceedings.

(2) The powers conferred by this section in relation to anyarticle shall be in addition to, and not in derogation of, any powersotherwise exercisable in relation thereto.

42. No person in or resident in Sri Lanka shall—

(a) with intent to evade the provisions of this Act,destroy, mutilate, deface, secrete or remove anybooks, accounts or other documents, or

Destruction,&c., ofdocuments,and falsestatements.

Retention ofseizedarticles.


(b) in furnishing any information for any of thepurposes of this Act make any statement which heknows to be false in a material particular, orrecklessly make any statement which is false in amaterial particular.

43. This Act shall bind the State and shall apply totransactions by a Government department or any person acting onbehalf of the State.

44. Any provision of this Act imposing any obligation orprohibition shall have effect subject to such exemptions as may begranted by order of the Minister, and any such exemption may beeither absolute or conditional.

45. Every decision of the bank to grant or refuse anypermission under this Act, or to revoke any permission which hasbeen so granted, or to rescind, add to or vary any conditions or toextend or reduce any time- limit to which the permission granted issubject, shall be communicated in writing by the bank to the personby whom application for the permission was made or, as the casemay be, to whom the permission was granted.

46. A person in regard to whom the bank makes a decisionunder this Act may, if he is dissatisfied with that decision, make awritten appeal against the decision to the Minister within ten daysafter that decision is communicated to him.

47. A decision of the bank against which an appeal is notmade in accordance with the provisions of section 46, and a decisionof the Minister on an appeal made in accordance with thoseprovisions, shall be final and conclusive and shall not be subject toreview or be called in question in any court.

48. Any permission, consent or authority granted under thisAct may be—

(a) general or special,

(b) absolute or conditional,

(c) limited so as to expire on a specified date, unlessrenewed, and

(d) varied or revoked.

49. In any prosecution of a person for an offence against thisAct, the burden of of proving that he had obtained the permission orconsent of the bank for doing the act or making the omission whichconstitutes the offence shall be on him.

Exemptions.

Decisions ofbank.

Appeals.

Finality ofdecisions.

Burden ofproof ofpermission.

Provisionsrelating topermission,consent orauthority.

Application toState.


49A. In any prosecution for the offence of contravening anyof the provisions of this Act in relation to foreign currency, it shallbe presumed, until the contrary is proved, that the currency inrespect of which the offence is alleged to have been committed isgenuine.

49B. In any legal proceedings in respect of any offence underthis Act, any of the following documents may be produced in courtand given in evidence against any accused and shall be prima facieevidence of the matters, transactions or accounts therein contained:—

(a) a certified copy of a banker ’s book or of anyextract thereof obtained from the manager orprincipal accountant of the bank;

(b) a certif ied copy of any book or other recordrequired by law to be maintained by a company ora certified copy of any extract thereof, obtainedfrom a director or secretary of the company; and

(c) a certified copy of any document or of an extractthereof in the proper custody of an officer of aforeign Government, and obtained from suchofficer.

50. No person shall be liable in any suit or other legalproceedings for any act done, or purporting to be done, in good faithin pursuance of the powers conferred by or under this Act, or for thepurpose of carrying out the provisions of this Act.

50A. (1) Except in the performance of his duties under thisAct, every officer or servant of the Department of Exchange Controlof the Central Bank shall preserve, and aid in preserving, secrecywith regard to all matters that may come to his knowledge in theperformance of his duties under this Act; and any such officer orservant who communicates any such matter to any person otherthan—

(a) the person to whom that matter relates or hisauthorised representative, or

(b) the Monetary Board, or

(c) the Governor of the Central Bank or anofficer of the Central Bank authorised bysuch Governor to obtain information regardingthat matter, or

(d) the Secretary to the Ministry charged with thesubject of Finance, or

Presumptionrelating toforeigncurrency.[ § 2, 47 of1957.]

Admissibilityof certaindocuments.[ § 11, Law 39of 1973.]

Duty ofofficers andservants tomaintainsecrecy.[ § 2, 35 of1956.]

Indemnity foracts done ingood faith.


Offences.[ § 13, Law 39of 1973.]

[ § 12, Law 39of 1973.]

(e) a public officer authorised by the Minister toobtain information regarding that matter, or

(f) a person to whom it is necessary tocommunicate that matter for the purpose ofsecuring compliance with, or detectingevasion of, any provision of this Act, or ofany other written law,

or suffers or permits any unauthorised person to have access to anybooks, papers or records of the aforesaid department or in thepossession or custody, or under the control, of the head of thatdepartment, shall be guilty of an offence.

(2) No officer or servant of the Department of ExchangeControl shall, in any legal proceedings to which the Monetary Boardis not a party, be compellable, except by order of the court, toproduce any book or document or to divulge or communicate anymatter coming under his notice in the performance of his dutiesunder this Act.

(3) For the purposes of this section any officer authorised bythe Monetary Board under subsection (5) of section 39 shall bedeemed to be an officer of the Department of Exchange Control ofthe Central Bank.

51. (1) Any person in or resident in Sri Lanka whocontravenes any provision of this Act or of any regulation madeunder this Act or fails to comply with any direction given orcondition or requirement imposed under this Act shall be guilty ofan offence, notwithstanding that the offence may, by virtue of PartIV of this Act, be also punishable under the provisions of theCustoms Ordinance.

(2) Any person who attempts to commit an offence againstthis Act shall be guilty of an offence.

(3) Where an offence against this Act is committed by abody corporate, any person who at the time of the commission ofthe offence was a director, general manager, secretary or othersimilar officer of the body corporate, or was purporting to act in anysuch capacity, shall be deemed to be guilty of that offence, unless heproves that the offence was committed without his consent orconnivance and that he exercised all such diligence to prevent thecommission of the offence as he ought to have exercised havingregard to the nature of his functions in that capacity and to all thecircumstances.

(4) Any person who commits an offence under this Actshall—

[ § 13, Law 39of 1973.]


(a) on conviction after summary trial before aMagistrate, be liable to imprisonment of eitherdescription for a term not exceeding eighteenmonths, or to both such imprisonment and a fine; or

(b) on conviction before the High Court, be liable toimprisonment of either description for a term notexceeding five years, or to both such imprisonmentand a fine;

and where the offence is concerned with any gold, currency, security,goods or other property, the court may, if it thinks fit so to do, orderthe gold, currency, security, goods, or property to be forfeited; andany gold, currency, security, goods or property forfeited under thissubsection shall be dealt with or disposed of in such manner as theMinister may direct.

(5) Except in the case of a body corporate, the maximumfine which may be imposed for an offence against this Act shall befifteen thousand rupees so, however, that where the offence isconcerned with any gold, currency, security, payment, goods or otherproperty, and does not consist only of a failure to give informationor produce books, accounts or other documents with respect theretowhen required so to do under section 39, a larger fine may beimposed not exceeding three times the amount or value of the gold,currency, security, payment, goods or property.

(6) A Magistrate before whom a prosecution is institutedagainst any person for an offence against this Act may,notwithstanding anything in the Code of Criminal Procedure Act,decide whether he will try that person summarily or take non-summary proceedings in respect of that offence:

Provided that the preceding provisions of this subsection shallnot affect or prejudice any right or power of the Attorney-Generalunder the aforesaid Code of Criminal Procedure Act.

(7) No prosecution in respect of any offence under this Actmay be commenced except at the instance of, or with the sanctionof, the bank:

Provided that this subsection shall not apply to a prosecutioncommenced by, or at the instance of, the Attorney-General.

(8) All offences under this Act shall be cognizable offencesfor the purposes of the application of the provisions of the Code ofCriminal Procedure Act, notwithstanding anything contained in theFirst Schedule to that Act.

[ § 13, Law 39of 1973.]

[ § 13, Law 39of 1973.]


(9) Notwithstanding anything in any other law any offenceunder this Act committed outside Sri Lanka may be tried before aMagistrate having jurisdiction in the division of Colombo or beforethe High Court holden in the judicial zone of Colombo.

52. (1) Before the commencement of a prosecution underthis Act, the bank may in writing require any person who in itsopinion has committed an offence under this Act to pay as a penaltya sum not exceeding two thousand rupees, within such period asmay be specified in the notification of such requirement.

(2) Where the offence referred to in subsection (1) isconcerned with any gold, currency, security, payment, goods or otherproperty, and is not only a failure to give information or producebooks, accounts or other documents with respect thereto whenrequired so to do under section 39,—

(a) the bank may in writing require such person to payas a penalty within such period as may be specifiedin the notification of such requirement an additionalsum not exceeding three times the amount or valueof the gold, currency, security, payment, goods orproperty; and

(b) the bank may, if it thinks it fit so to do, in writingrequire gold, currency, security, goods or property tobe delivered to the bank.

(3) Every requirement for delivery to the bank made undersubsection (2)(b) shall be communicated to the person in whosepossession the gold, currency, security, goods or property required tobe delivered is, and such person shall , upon receipt of suchcommunication, deliver to the bank such gold, currency, security,goods or property.

(4) Any gold, currency, goods or property delivered to thebank under this section shall be dealt with or disposed of in suchmanner as the Minister may direct.

(5) Any sum of money imposed as penalty under this sectionshall be disposed of in the following manner:—

(a) one-half of that sum shall be forwarded to theSecretary to the Treasury to be credited to theConsolidated Fund; and

(b) the other half of such sum may be divided amongany informer or informers who, in the opinion of thebank, supplied such information as led to thedetection of the offence referred to in subsection (1),or may be credited to the Consolidated Fund.

[ § 13, Law 39of 1973.]

Imposition ofpenalties bythe bank.[ § 14, Law 39of 1973.]


(6) No person against whom a requirement is made by thebank under this section shall except with the permission of the bank,sell, hypothecate, alienate, transfer or dispose of in any mannerwhatsoever any immovable property or securities belonging to himuntil such requirement is complied with or until the expiry of aperiod of two months from the end of the period specified in suchorder, whichever is earlier:

Provided, however, that where on the failure of such person tocomply with such requirement, any action is instituted against suchperson in respect of the offence committed by him in any courtbefore the expiry of the aforesaid period of two months, the courtmay direct that the prohibition on disposal of property referred to inthe preceding provisions of this subsection shall continue for suchfurther period as the court may determine.

(7) Any person against whom a requirement is made by thebank under this section may, within twenty-one days after thenotification of the requirement to him, appeal therefrom in writing tothe Minister. The appeal shall state the grounds of objection to therequirement.

(8) On an appeal made under subsection (7), the Ministermay confirm, reduce, increase or annul the penalty imposed, or issuesuch directions in respect of the gold, currency, security, goods orproperty required to be delivered to the bank as he may think fit.

(9) Where any person pays to the bank the penaltyimposed under this section, or pays the penalty and delivers to thebank the gold, currency, security, goods or property required to bedelivered to the bank under this section, as the case may be, suchperson shall not be liable to a prosecution for the offence in respectof which the penalty was imposed or the requirement made.

53. (1) The Minister may make such regulations as may benecessary for carrying out the principles and provisions of this Act.

(2) No regulation made under subsection (1) shall have effectunless it is approved by Parliament and is published in the Gazette.

(3) All applications, returns and other documents made orfurnished under this Act shall be in such form as the bank may fromtime to time specify or provide for the purpose.

54. (1) In this Act, unless the context otherwise requires—

“ authorised dealer ” means, in relation to gold or any foreigncurrency, a commercial bank for the time being authorised

Regulations,forms, &c.

Interpretation.


under section 4 to act for the purposes of this Act as anauthorised dealer in relation to gold or that foreigncurrency;

“ bank ” or “ Central Bank ” means the Central Bank of SriLanka established by the Monetary Law Act;

“ banker’s book ” includes any ledger, day book, cash book,account book and any other book used in the ordinarybusiness of a bank;

“ banking company ” has the same meaning as in theCompanies Ordinance ; *

“ bearer certificate ” means a certificate of title to securities bythe delivery of which (with or without endorsement) thetitle to the securities is transferable;

“ blocked account ” has the meaning assigned to it by section31 (7);

“ certificate of title to securities ” means any document of titlewhereby a person recognizes the title of any other personto securities issued or to be issued by the first-mentionedperson, and in the case of any such document with coupons(whether attached or on separate coupon sheets) includesany coupons which have not been detached;

“ certified copy ” of any book, record, extract or document,means a copy of the book, record, extract or document,together with a certificate written at the foot of such copythat it is a true copy of such book, record, extract ordocument; and that such book, record, extract or documentis still in proper custody, such certificate being dated andsubscribed by the person in whose custody it is, with hisname and official title;

“ company ” means a company registered under the enactmentsrelating to companies from time to time in force in SriLanka or in any other country;

“ coupon ” means a coupon representing dividends or intereston a security;

“ currency ” includes coins, currency notes, bank notes, postalorders, money orders, cheques, drafts, travellers’ cheques,letters of credit, bills of exchange and promissory notes;

“ foreign assets ” means any movable or immovable propertyoutside Sri Lanka of any class or description whatsoeverand without prejudice to the generality of the preceding

Repealed and replaced by the Companies Act, No. 17 of 1982.

[ § 15, Law 39of 1973.]

[ § 15, Law 39of 1973.]

[ § 15, Law 39of 1973.]

[ § 15, Law 39of 1973.]

[ § 8, 17 of1971.]

[ § 8, 17 of1971.]


provisions of this definition, includes foreign exchange,foreign currency, gold and securities;

“ foreign currency ” means any currency other than Sri Lankacurrency and includes any currency payable by a foreignGovernment or institution to a person in, or resident in, SriLanka in respect of his pension or other gratuities due tohim;

“ foreign exchange ” means foreign currency and includes alldeposits, credits and balances payable in any foreigncurrency, and any such drafts, travellers’ cheques, letters ofcredit and bills of exchange as are expressed or drawn inSri Lanka currency but payable in any foreign currency;

“ gold ” means gold coin or gold bullion;

“ Minister ” means the Minister in charge of the subject ofFinance;

“ Monetary Board ” means the Monetary Board of the CentralBank;

“ policy of assurance ” means any policy securing the paymentof a capital sum or annuity on the occurrence of a specifiedevent which is certain to happen and includes—

(a) any policy by which the payment of money is assuredon death (except death by accident only) or thehappening of any contingency dependent on humanlife, and

(b) any policy securing the payment of an immediateannuity;

and the reference in this definition to the occurrence of aspecified event which is certain to happen shall include theoccurrence, which is certain to happen, of one of specifiedevents none of which by itself is certain to happen;

“ prescribed ” means prescribed by the Minister by Orderpublished in the Gazette;

“ rupees ” means Sri Lanka rupees;

“ secondary securities ” has the meaning assigned to it bysection 19;

“ securities ” means shares, stock, bonds, capital in anypartnership, notes (other than promissory notes), debentures,debenture stock, units under a unit trust scheme and sharesin an oil royalty;

“ specified foreign exchange ” has the meaning assigned to itby section 6;

[ § 8, 17 of1971.]

[ § 8, 17 of1971.]

[ § 15, Law 39of 1973.]

[ § 8, 17 of1971.]


“ Sri Lanka currency ” means currency which is expressed ordrawn in Sri Lanka rupees;

“ tourist, airline or shipping service ” means service of anyclass or description prescribed to be a tourist, airline orshipping service for the purposes of this Act;

“ unit trust scheme ” means any arrangements made for thepurpose, or having the effect, of providing for personshaving funds available for investment, facilities for theparticipation by them, as beneficiaries under a trust, inprofits or income arising from the acquisition, holding,management or disposal of any property whatsoever;

“ unit ” means, in relation to a unit trust scheme, a right orinterest (whether described as a unit, as a sub-unit, orotherwise) which may be acquired under that scheme.

(2) Any provision of this Act (however worded) the effect ofwhich is to prohibit the doing of any act where a person to or bywhom the act is to be done or who stands in a specified relation toany property possesses any specified attribute as to residence orotherwise shall, where the act is done to or by two or more personsor, as the case may be, where two or more persons stand jointly inthat relation to the property, operate to prohibit the doing of that actif any of those persons possess that attribute; and any provision ofthis Act imposing an obligation on any person to do an act if hepossesses any specified attribute as to residence or otherwise shall,in relation to any act which can only be done by two or morepersons jointly—

(a) where all those persons possess that attribute,operate to impose a joint obligation on all of themto do the act, and

(b) where some only of them possess that attribute,operate to impose a separate obligation on each oneof them who possesses that attribute to do all hecan to secure the doing of the act.

(3) Any power conferred by this Act to require declarationswhich are to be furnished on any occasion shall include a power torequire that the declarations shall be made by specified persons andshall be verified in a special manner.

[ § 8, 17 of1971.]

[ § 15, Law 39of 1973.]

Documents

15th August, 1953. - Central Bank of Sri Lanka...[ 15th August, 1953.] 1. This Act may be cited as the Exchange Control Act. 2. (1) The Central Bank of Ceylon shall, as agent of the