DIRECTORATE OF DIRECTORATE OF INDUSTRIES SERVICESINDUSTRIES SERVICES

DIRECTORATE OF DIRECTORATE OF INDUSTRIES SERVICESINDUSTRIES SERVICES

FUNCTIONS & PROCEDURES

THILAK ARUMAPPERUMA ARACHCHITHILAK ARUMAPPERUMA ARACHCHI

SUPERINTENDENT OF CUSTOMSINDUSTRIES & SERVICES DIRECTORATE

EXPORT FACILITATION UNIT

Friday, 30 December 2016 @ Auditorium, Sri Lanka Customs

OBJECTIVES

CUSTOMS PROCEDURES WITH ECONOMIC IMPACT

ECONOMIC DEVELOPMENT TRADE FACILITATION

STRUCTURE

Ind

ust

ries

& S

erv

ices

Dir

ect

ora

te

Project Unit

Export Facilitation Unit

Bank Guarantee Unit

Warehouse Keeping Unit

INFAC & CBCU Unit

Bonding Investigations Unit

Monitoring Unit

Parcel Post Office

Reven

ue &

Serv

ices

Clu

ster

CORE TOOLS

INW

AR

D P

RO

CE

SS

ING

BO

ND

ED

WA

RE

HO

US

ING

BONDED WAREHOUSING

(S69-S100)

INWARDPROCESSING

(S22A)

CONTAINERFREIGHTSTATIONS

(S103)

CORE TOOLSBONDED WAREHOUSEAny place provided by the Minister in which goods entered to be warehoused may be lodged, kept, and secured without payment of duty, although prohibited to be used in Sri Lanka. (S167)

CONTAINER FREIGHT STATIONSPlace designated by DGC for storage and clearance of goos under Customs control after they have been destuffed from containers or when they are to be stuffed into containers; for the storage of containers with or without goods. (S167)

INWARD PROCESSINGInward Processing (IP) provides for the imports of materials as inputs for processing and export without payment of import duties. The processing may include from simple repacking, sorting to complicated manufacturing by small to medium scale authorized operators.

Postal Clearance

BondedWarehousing

Industries &

Services

Inward Processing

Entrepôt Trade

Manufacturein

Bond

Apparel&

Textiles

FRONTEND FUNCTIONS

BACKEND FUCNTIONS

Industries & Services

Directorate

INWARD PROCESSING (IP)

INWARD PROCESSING

(IP)

TIEP-ISCHEME

TIEP-IV SCHEME

INFACSCHEME

IGSCHEME

IP – TIEP(I&IV)/INFAC/IG

DIRECTEXPORT

Raw materials/Consumables/Packing materials

Plant/Machinery/Parts

Finished GoodsSemi Finished Goods

Packing materials

EXPORTER UNDER IP/BOI

EXPORTER UNDER IPProcessingAssembly

Manufacture(S22A)

ENTITIES ENTITLED FOR EXEMPTIONS

INDIRECTEXPORT

DEEMEDEXPORT

FIN

AL

EX

PO

RT

Finished Goods

SALE FORHOME USE

(Duties Payable)

LOCAL TRADERS / CONSUMERS

BONDED WAREHOUSING

BONDEDWAREHOUSING

BONDED WAREHOUSE

WarehouseShall mean any place provided for the deposit of goods on the landing or for shipment thereof for the security of the Customs. (S167)

Bonded WarehouseShall mean any place provided by the Minister in which goods entered to be warehoused may be lodged, kept, and secured without payment of duty, although prohibited to be used in Sri Lanka. (S167)

BONDED WAREHOUSES

PUBLIC BONDS(SLPA)

PRIVATE BONDS

Entered by an importer of any goods on Availability of space and acceptance by Customs

Duty free sales

Home use

Re-export/MCC

Indirect export

Ship store supplies

Clearance of passenger baggage

PRIVATE BOND

Duty FreeService Bond

(Only to serve duty free

feeder bonds – Outside

ports)(S69-S100)

DUTY FREE TRADE

PRIVATE BOND

Duty FreeFeeder Bond

(Only to serve duty free

shops – Inside ports)

(S69-S100)

PRIVATE PRIVATE BONDBOND

Duty Free Duty Free ShopsShops

(Only to (Only to serve serve

passengers – passengers – Inside ports)Inside ports)(S69-S100)(S69-S100)

Entered by bondsman approved goods

RE

-BO

ND

TR

AN

SF

ER

AP

PLI

CA

TIO

N

PASSENGER

SHIP CREW

PRIVATE BOND

Duty FreeGeneral

Bond

(S69-S100)

DUTY FREE TRADE

Entered by bondsman approved goods

EX-BOND

FOREIGN MISSIONS

QUALIFIED PROJECTS

PUBLIC BOND(SLPA)

JCT Oil Bank

(S69-S100)

SHIP STORES – BUNKER TRADE

Entered by license holder

RE-BOND

OIL BARGESBUNKERS TOFOREIGN GOING VESSELS

EX-BOND

BONDED WAREHOUSE

(S69-100 of CO)

SPECIFIC COMMODITY BONDS

Entered by bondsman approved goods. (TO BOND)

Enter for Home useDuties Payable (EX-BOND)

➔ Sugar➔ Rice

De-consolidationConsolidation

(S69-S100, S103A)

MULTI COUNTRY CONSOLIDATION

Bonded warehouse &Container Freight Stations

Export /Re-export

Import – Origin A

Import – Origin B

Import – Origin N

Local Cargo A Local Cargo N

ENTREPÔT TRADE

Value AdditionLabelingRe-packing

Bonded warehouse

Re-stuffing

Re-ShipmentT/S Cargo

Relaxed Exchange Control Relaxed Import Control Simple Value Addition No security required for Customs duties No change of Commodity Restrictions on commodities with negative economic impact Transfer under Customs Supervision

ENTREPÔT TRADE

ProhibitedNarcoticsArms and ammunitionGoods prohibited under international conventions

RestrictedCloves re-export to countries under preferential trading agreementsTextile and clothing – re-export to USA, Canada, India, Austria, Italy, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Spain, Luxembourg, Sweden, Netherlands, Portugal, and UK.

MANUFACTURE IN BOND (MIB)

ManufactureIn

Bond(S69-S100)

MIB

DIRECTEXPORT

Raw materials/Consumables/Packing materials

Plant/Machinery/Parts

Finished GoodsSemi Finished Goods

Packing materials

EXPORTER UNDER IP/BOI

MIB(S69 – S100)

ENTITIES ENTITLED FOR EXEMPTIONS

INDIRECTEXPORT

DEEMEDEXPORT

FIN

AL

EX

PO

RT

Finished Goods

SALE FORHOME USE

(Duties Payable)

LOCAL TRADERS / CONSUMERS

MONITORING & UPDATES

INDUSTRIES UNDER IP

BONDED WAREHOUSES

Imports of InputsDirect ExportIndirect ExportDuty Free SalesHome Use

SYSTEM AUDIT✔ ASYCUDA✔ THINETH✔ BONDING REGISTERS

CUSTOMS BOI COORDINATION

● Termination of BOI venturesTermination of BOI ventures– Recovery of liabilities if anyRecovery of liabilities if any

● Local SalesLocal Sales– Inspection and assessment goodsInspection and assessment goods

BONDING INVESTIGATION UNIT

● Investigate into suspected frauds/violations Investigate into suspected frauds/violations within the scope of Industries and Services within the scope of Industries and Services Directorate, and BOIDirectorate, and BOI

● Report on findingsReport on findings● Assist at inquiries under Customs Assist at inquiries under Customs

OrdinanceOrdinance● Ensure actions are taken to deter Ensure actions are taken to deter

recurrencerecurrence

Approval and registration

PROCEDURES

Securing of liabilities

Entering import of inputs & machinery

Entering exports of finished products

Entering for home use

Writing-off of liabilities

Annual verification & renewal

APPROVAL & REGISTRATION

● BONDED WAREHOUSE– Approval by the Minister on the recommendation of the DGC

– Appointment by DGC (S69)

● INWARD PROCESSING– Approval on conversion+wastage by MIC & Customs (S22A)

● CONTAINER FREIGHT STATION– Approval by the Minister

– Establish by DGC (103A)

● Allocation of Customs Reference Number (Warehouse Code)

SECURING LIABILITIES

● Covering Customs duties and other levies● Bank Guarantees● Corporate Guarantees● Valid for one year● Renewable

ENTERING BY CUSDEC

● Customs DeclarationCustoms Declaration● Customs Office Code (CBBD1)Customs Office Code (CBBD1)● Customs Procedure CodeCustoms Procedure Code

– Examples:Examples:● 7700-TRD7700-TRD● 7700-TRU7700-TRU● 7700-TIE7700-TIE● 7700-TRS7700-TRS

● Commodity Description & HS Commodity Description & HS CodeCode

● QuantityQuantity● ValueValue

WRITING-OFF LIABILITIES

● Liabilities on import – Record is created in THINETH

– Secured against BG/CG/PG

– Debit note is issued

● Re-Export/Ex-Bond/Re-Bond/GRN– MUD (Material Utilization Declaration)

– THINETH is updated within one month to write off import liabilities

– Credit granted enhancing Guarantee value

RENEWAL

● Annual● Verification● Renewal & Verification Charges● Renewal

POSTAL CLEARANCE

➔ Responsible for clearance of ➔ Air / Sea parcels➔ Letters and Customs Detained

packets➔ Express Mail Service (EMS)➔ Bulk posts (books)➔ Export parcels

➔ Working points➔ Colombo Central Mail Exchange➔ Galle➔ Kandy➔ Trincomalee➔ Jaffna➔ Katunayake Free Trade Zone

POSTAL CLEARANCE PROCEDURE

● Postal Department notifies consignee with Foreign Parcel Notice (POD-3) along with Postal Department notifies consignee with Foreign Parcel Notice (POD-3) along with POD31 in triplicate. (POD: Post Office Declaration)POD31 in triplicate. (POD: Post Office Declaration)

● Consignee submits FPN + POD31 to countersConsignee submits FPN + POD31 to counters● Postal service produce mail for inspection by CustomsPostal service produce mail for inspection by Customs● Customs appraiser determines tariff applicableCustoms appraiser determines tariff applicable● Taxer calculates applicable duties and enters on POD and issue a Duty Receipt to Post Taxer calculates applicable duties and enters on POD and issue a Duty Receipt to Post

MasterMaster● Post master collects Customs duties and release the parcel/mailPost master collects Customs duties and release the parcel/mail● In respect of BOI/IP/BONDED Clearance, a CusDec shall be produced in addition to In respect of BOI/IP/BONDED Clearance, a CusDec shall be produced in addition to

PODPOD● Taxer prepares Cash-Sheet and tallies with that of the Post Master at the end of the day.Taxer prepares Cash-Sheet and tallies with that of the Post Master at the end of the day.● Customs shroff collects the collection on the next working dayCustoms shroff collects the collection on the next working day

CUSTOMS PROCEDURES WITHECONOMIC IMPACT

Offered in GOOD FAITHImplemented in TRUSTRelaxed for PRODUCTIVITYAimed at PROGRESS

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