WT/TPR/M/347/Add.1  
3 February  2017 
(17-0666) Page: 1/57 
Trade Policy Review Body  
1 and 3 November 2016  Original: English/anglais/inglés  
 
 
  TRADE POLICY REVIEW  
SRI LANKA 
MINUTES  OF THE MEETING  
Addendum  
Chairperson: H.E. Ms. Irene Young (Hong Kong, China)  
This document contains the advance written questions  and additional questions by WTO 
Members , and replies provided by  Sri Lanka .1 
 
 
Organe d' examen des politiques commerciales  
1 et 3 novembre 2016  
EXAMEN DES POLITIQUE S COMMERCIALES  
SRI LANKA 
COMPTE RENDU DE LA R ÉUNION  
Addendum  
Présidente : S.E.  Mlle. Irene Young (Hong Kong, Chine)  
Le présent document contient les questions écrites communiquées à  l'avance par les 
Membres de l'OMC, leurs questions additionnelles, et les réponses  fournies par  Sri Lanka .1 
 
 
Órgano de Examen de las Políticas Comerciales  
1 y 3 de noviembre de 2016  
EXAMEN DE LAS POLÍTI CAS COMERCIALES  
SRI LANKA 
ACTA DE LA REUNIÓN  
Addendu m 
Presidenta: Excma.  Sra. Irene Young (Hong Kong, China)  
En el presente documento figuran las preguntas presentadas anticipadamente por escrito  y 
las preguntas adicionales de los Miembros de la OMC,  así como las respues tas facilitadas por  Sri 
Lanka .1 
                                                
1 In English only./En anglais seulement./En inglés solamente.  WT/TPR/M/347/Add.1  
 
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  AUST RALIA  
 
Report by the Secretariat (WT/TPR/S/347)  
1. Economic Environment  
Page 14, Paragraph 1.5  
 
The report notes that the main risk to sustained growth in Sri Lanka is its weak fiscal position and 
the resulting public debt overhang.  
 
Question 1  
What progr ess has Sri Lanka made to s trengthen its fiscal position?  
 
Answer  
Fiscal position of Sri Lanka is constrained by sluggish performance of government revenue and 
rigidity of recurrent expenditure during the review period.  
 
Therefore the Government has commit ted to improve its fiscal position in the medium term by 
increasing the revenue collection, reducing the budget deficit and rationalizing the public 
expenditure. These initiatives will be supported by rationalization of Public Debt related to SOEs by 
conve rting them into the joint venture equity or equity and restructuring SOEs in response to the 
market driven business environment . 
 
Report by the Secretariat (WT/TPR/S/347)  
1. Economic Environment  
1.1  Fiscal Policy  
Page 15, Paragraph 1.7  
 
The report notes that recent efforts to broaden the tax base, improve tax administration and to 
rationalize tax exemptions have not produced the desired results.  
 
Question 2  
What steps will Sri Lanka take to improve its revenue collection while remaining mindful of the 
constraint on trade cre ated by high tariffs?  
 
Answer  
Government, on a policy priority basis, has adopted a number of initiatives to improve revenue 
including the following initiatives minimizing constraint on trade created by high tariffs:  
a) Increasing the di rect tax to indirect tax ratio from 20:80 to 40:60 in the medium terms by 
expansion of tax base,  
b) Rationalization of tax exemptions, and concessions,  
c) Automation of treasury management as well as revenue management system  
d) Redrafting the revenue related le gislation to eliminate leakages and tax evasion.  
e) Facilitating expansion of domestic economic transactions through the FTAs and BITs with 
major trading partners to expand the tax base.  
Report by the Secretariat (WT/TPR/S/347)  
2. Trade and Investment Regime  
2 Trade Policies and Practices by Measure  
2.4  Investment Regime  
Page 32, Paragraph 2.42  
 
The report notes that government policies, including the Underutilised Assets Acts, and regulations 
aimed at restricting foreign land ownership is likely to impact fo reign investment.  
 
Question 3  
Will Sri Lanka amend these policies in light of its commitments to improve the investment 
environment? If so, what amendments are likely?  
 
 
 WT/TPR/M/347/Add.1  
 
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  Answer  
The acquisition of property was carried out under the Revival of Underperfor ming Enterprises or 
Underutilized Assets Act, No. 43 of 2011 which was a scheme adopted previously. The government 
currently recognizes the adverse and detrimental effect of such policies on attracting and 
maintaining foreign investments in Sri Lanka and t herefore, is in the process of repealing such Act. 
Accordingly, steps are being taken in this regard by the Ministry of Public Enterprise Development.  
In relation to restricting foreign land ownership, a Bill is to be presented to the Parliament shortly. 
The proposed Bill will give legislative standing to the policy decision to cease the collection of land 
lease tax payable by foreigners for an indenture of lease entered into from 1st January 2016. With 
regard to outright transfers of land to foreigners, a company with less than 50% foreign 
shareholding is permitted to purchase land outright. Furthermore, the Land (Restriction on 
Alienation) Act, No. 38 of 2014 makes provision for certain exemptions to the general prohibition 
on transfers of title of land to  foreigners. These exemptions are contained in Section 3 of the Act 
under reference  and comprise the following transfers of land:  
a) to a Diplomatic Mission of another State or to and international, multilateral or bilateral 
organization  
b) a condominium parcel  situated on or above the 4th floor  
c) transfer to a foreign investor consequent to a cabinet decision prior to January 1. 2013 as 
per an agreement structured under the tax regime prior to 01 -01-2013 and has ensured 
compliances through inward remittances  
d) by intestacy, gift or testamentary disposition to a next of kin (who is a foreigner) of the 
owner of such land  
e) to a dual citizen of Sri Lanka  
f) to any bank with more than 50% of foreign shareholding at an auction or execution of a a 
decree of court for recovery of loans  
g) to any Finance institution with more than 50% foreign shareholding:  
i) where such land has been mortgaged  
ii) to execute a lease, or  
iii) a decree of court to enforce the recovery of a loan  
h) to a company with more than 50% foreign ownership from 01 .01.2013 to 29.10.2014 
(certification date), if such company has been in active operation in Sri Lanka for a period 
not less than 10 consecutive years, with consultation with the Minister of Land and prior 
written approval of the Cabinet  
i) any foreign compan y engaged in international commercial operations and the land is 
purchased to locate or relocate its global or regional operations  
 
Report by the Secretariat (WT/TPR/S/347)  
2 Trade and Investment Regime  
2.4 Investment Regime  
2.4.1 Legal framework  
Page 32, Paragraph 2.44  
 
Australia notes that investment in agriculture and/or agro processing, animal husbandry and/or 
processing, fisheries and/or fish processing services is a priority for Sri Lanka and is subject to 
investment incentives (Table 2.3).  
 
Question  4 
Are there any exemptions to the restrictions on foreign ownership and leasing of land imposed by 
the “Land (Restrictions on Alienation) Act” to allow for investment into the agriculture and fisheries 
sectors?  
 
Answer  
The agriculture and fisheries sector  is a priority sector of Sri Lanka and foreign shareholding is 
allowed for investments for all subsectors agriculture and fisheries excluding the following:  
- Coastal fishing: prohibited  WT/TPR/M/347/Add.1  
 
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  - Growing and primary processing of tea, rubber, coconut, cocoa, rice, su gar and spices: up to 
40% of the issued capital of such company or a higher percentage of foreign investment, 
with the approval of the Board of Investment of Sri Lanka.  
With regard to land, outright transfers are permitted to companies where the foreign sh areholding 
is less than 50%. If foreign shareholding is greater than 50%, such companies have the option of 
entering into long -term leases for a period up to 99 years. For such indentures of leases, entered 
into after 1st January 2016, the requirement of u pfront payment of land lease tax of 15% of the 
value of lease for entire period has also been lifted and therefore not payable.  
 
Report by the Secretariat (WT/TPR/S/347)  
2. Trade and Investment Regime  
2.4 Investment Regime  
2.4.2  Investment management and policy  
Page 33, Paragraph 2.49  
 
Question 5  
When will the proposed Investment Act be enacted?  
 
Answer  
The Government is in the process of drafting legislation to establish the Agency for Development 
whose function will be to fast -track, streamline and attr act Foreign Direct Investments into Sri 
Lanka. In the meantime, a Development Agency and an International Trade Agency designate  has 
already been set up under the Ministry of Development Strategies and International Trade to 
expedite matters relating to in vestment and trade for the purposes of improving the current 
business environment.  
 
Report by the Secretariat (WT/TPR/S/347)  
2. Trade and Investment Regime  
2.4 Trade Policies and Practices by Measure  
2.4.4  Investment incentives and promotion  
Page 28, Par agraph 2.51  
 
Question 6  
When will Sri Lanka introduce the new incentive scheme for investment?  
 
Answer  
The new incentive scheme is in the process of being finalized and will be submitted by the Minister 
of Development Strategies and International Trade to the economic sub -committ ee chaired by the 
Prime Minister and cabinet of Ministers for their due approval.  
 
Report by the Secretariat (WT/TPR/S/347)  
3. Trade Policies and Practices by Measure  
3.1  Measures Directly Affecting Imports  
3.1.4  Tariffs  
3.1.4.3  Applied tariff  
Page 43, Paragraph 3.18  
 
The report notes that only 38 per cent of tariff lines are bound. This gives Sri Lankan authorities 
considerable scope to change tariffs, which contributes to the unpredictability of the import 
regime. Australian expor ters report frequent shifts in Sri Lanka’s tariff regime are a deterrent to 
trade.  
 
Question 7  
Will Sri Lanka improve the predictability of its import tariff regime? If so, what measures will Sri 
Lanka take?  
 
Answer  
The Secretariat has acknowledged that “ the tariff regime remained relatively unchanged during the 
period, with applied rates declining slightly from an average of 11.5% in 2010 to 10.3% in 
2016”(Page 8: Paragraph 8 of the Report). The relative changes even had been done to reduce the 
average ap plied tariff rates.  WT/TPR/M/347/Add.1  
 
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  Sri Lanka is the  only  country in the region with a simplified tariff regime with three tariff band 
regime of 0%, 15% and 30% with high rate of predictability. Sri Lanka is also sensitive to the 
global market price trends to ensure level  playing field for industries and protection of consumer 
welfare practiced by  many other members.  
 
Sri Lanka continues to maintain a 56.3% of the tariff lines under the 0% tariff band. Duty free 
rates are applied nearly to 15% agriculture tariff lines and  about 64% of non -agriculture tariff 
lines.  Moreover, the remaining tariff lines are maintained, covering 19.6% of tariff lines at lower 
band of 15% and 22.8% of tariff lines at 30%.  
 
Report by the Secretariat (WT/TPR/S/347)  
3. Trade Policies and Practic es by Measure  
3.1  Measures Directly Affecting Imports  
3.1.4  Tariffs  
3.1.4.3 Applied tariff  
Page 44, Paragraph 3.20  
 
Question 8  
Australia welcomes the decline in Sri Lanka’s average applied MFN tariff on agricultural products 
over the period of the review.  What is Sri Lanka’s long term policy on tariffs on agricultural 
products?  
 
Answer  
As noted, over 15% agriculture tariff lines are at zero duty rates, and the average tariff applied on 
rest of the agri culture items remain below 25%.  It is 50% less than our  bound commitmen ts on 
the agriculture products.  
 
As a net food importing developing country, the long term policy on tariffs on agriculture products 
is determined on the basis of development needs of the economy, sustainable livelihood, food 
security, agri culture sector as the main employment generator and on the outcome of the ongoing 
negotiations at multilateral level.  
 
Report by the Secretariat (WT/TPR/S/347)  
3. Trade Policies and Practices by Measure  
3.1  Measures Directly Affecting Imports  
3.1.5  Other  charges affecting imports  
Page 48, Paragraph 3.24  
 
The report notes that in addition to the tariff, Sri Lanka applies a range of levies and taxes. These 
additional charges significantly increase the cost of imports. Furthermore, these taxes and levies 
are prone to change, which adds to the unpredictability of the import regime.  
 
Question 9  
Is Sri Lanka looking to streamline these additional levies and taxes on imports? If so, what 
measures will it take?  
 
Answer  
 
The objectives of levies and taxes are to ap ply them on non -discriminatory basis. Sri Lanka's 
excise duty, value added tax, and nation building tax are applied equally to both imported and 
domestic goods and do not give rise to any concerns under Sri Lanka's national treatment 
obligations.  
 
With res pect to three other measures, the Export Development Board Levy ("CESS"), the Special 
Commodity Levy, and the Ports and Airport Development Levy, these measures are applied at the 
border. Sri Lanka is reviewing these measures and it is expected that the CE SS and the Ports and 
Airport Development Levy will be phased out. Towards this objective, the Government through its 
budget of 2017, proposes commencing phasing out of CESS.  
 
The Special Commodity Levy operates as Sri Lanka's customs tariff for a number (3 9) of 
agricultural products. This Levy applies on an MFN basis to imports of these products from all 
sources. The Special Commodity Levy is a single duty, applied only on 39 essential commodities in  WT/TPR/M/347/Add.1  
 
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  place of Customs Import Duty. On application of Special C ommodity Levy, no any other duties and 
internal taxes shall be applicable on those tariff lines. Purpose of the Special Commodity Levy is to 
facilitate the inflow of selected essential commodities taking into account domestic economic 
sensitivities.  
 
Repo rt by the Secretariat (WT/TPR/S/347)  
3. Trade Policies and Practices by Measure  
3.3  Measures Affecting Production and Trade  
3.3.2  Competition policy and price controls  
Page 61, Paragraph 3.90  
 
The report notes that the relevant authorities don’t have the power to initiative investigations into 
the existence of monopolies or to examine mergers or acquisitions.  
 
Question 10  
Does Sri Lanka propose to strengthen its competition law? If so, how will it differ from existing 
laws?  
 
Answer  
The existing Law does not cover monopolies and mergers. However, Consumer Affairs Authority is 
established to monitor and regulate matters pertaining to anti -competition, to carry out 
investigations into the prevalence of anti -competitive practices under trade practices and 
restrictive trade practices. It is proposed to carry out investigations into existence of monopoly 
situation, and creation of Anti -competitive Mergers which creates market dominant positions. 
Further, control or elimination of mergers is considered under the proposed Competition Law.  
 
Report by the Secretariat (WT/TPR/S/347)  
3. Trade Policies and Practices by Measure  
3.3  Measures Affecting Production and Trade  
3.3.3  State trading, state -owned enterprises, and privatization  
Page 63, Paragraph 3.97  
 
The report  notes that the State -Owned Enterprises (SOEs) collectively represent a risk to public 
finances. The outstanding obligations of the central government and the SOEs total around 12.2% 
of GDP (Rs.1.36 trillion).  
 
Question 11  
What is the status of Sri Lanka’s  SOE reform?  
 
Answer  
With a view to transforming SOEs commercially viable ventures, the Unity Government has 
established a separate Ministry of Public Enterprise Development to focus on the requirements. 
Some of the immediate initiatives taken in reform pr ocess involve the following;  
 Plantation Advisory Committee was appointed by the Ministry of Public Enterprise 
Development to study and recommend measures to restructure five plantation companies of 
this Ministry. The committee recommended measures which in clude short, medium and long 
term actions. Accordingly, calling Expression of Interest (EOI) from interested parties for the 
Public Private Partnership to utilize the assets  is in progress.  
 
 Action is underway to amalgamate Sri Lankan Airlines and Mihin La nka to ensure that the 
institutions function in profitable manner.  
 
 Merging of two State Housing Financial Institutions namely, Small and Medium Investment 
Bank (SMIB) and Housing Development Finance Corporation (HDFC) is under evaluation.  
 
 Action is being  taken to appoint consultants to assess the other SOEs and recommend 
measures to restructure them.  WT/TPR/M/347/Add.1  
 
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  Report by the Secretariat (WT/TPR/S/347)  
3. Trade Policies and Practices by Measure  
3.3  Measures Affecting Production and Trade  
3.3.3  State trading, state -owned enterprises, and privatization  
Page 63, Paragraph 3.98  
 
Question 12  
When will the new Public Enterprise Act be enacted?  
 
Answer  
Public Enterprises Act is under drafting process.  
 
Report by the Secretariat (WT/TPR/S/347)  
4. Trade Policies by Sector  
4.2  Mining and Energy  
4.2.2  Energy  
Page 90, Paragraph 4.67  
 
Sri Lanka has achieved a national electrification level of 100%. The report notes that demand for 
electricity is likely to grow at about 4 -6% per year.  
 
Question 13  
Is Sri Lanka in a position t o meet the increase in demand for electricity in forward years and what 
measures are being taken?  
 
Answer  
Long Term Generation Expansion Plan (LTGEP) 2015 -2034, which was approved by Public Utility 
Commission (PUC) of Sri Lanka in September 2016, forecast  Sri Lanka electricity demand for 25 
years. The revised based case plan 2015 -2035 shown in Annex II (LTGEP 2015 -2034- ) indicate 
the future renewable and the thermal power plant additions to meet the electricity demand 
forecast.  
 
Report by Sri Lanka (WT/TP R/G/347)  
5.1 Intellectual Property (IP)  
Page 9, paragraph 5.1(a) and (b)  
 
Australia notes Sri Lanka’s proposed amendments to the Intellectual Property Act No 36 of 2003, 
in particular the amendment for registration of Geographical Indications, and also the  proposed 
amendment to include a copyright exception for the use of published copyright material by people 
with print disability.  
 
Question 14  
Could Sri Lanka provide some more detail on the proposed amendments for registration of 
Geographical Indications?  Do the proposed amendments concerning Geographic Indications include 
safe guards such as publication of, and reasonable means to allow for oppositions to, any terms 
proposed for GI registration in Sri Lanka?  
 
Answer  
In order to protect unique products suc h as Ceylon Tea and Ceylon Cinnamon in Sri Lanka, as an 
interim measure a proposal was made to register GI, by an amendment to the IP Act. Cabinet has 
now approved the same, to prepare the Bill. There is no provision to file notice of opposition 
against GI  registrations.  
 
However oppositions can be filed against GIs under certification marks system. A comprehensive 
Legal frame work for GI will be proposed by 2018 .  
 
Question 15  
In addition to undertaking amendments to join the Marrakesh Treaty, does Sri Lan ka envisage also 
working towards joining the WIPO Copyright Treaty?  
 
 
 WT/TPR/M/347/Add.1  
 
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  Answer  
Yes, Sri Lanka will work towards joining WIPO Copyright treaties including Beijing Treaty in the 
future.  WT/TPR/M/347/Add.1  
 
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  BRAZIL  
 
S347  
Para 3.116. (…)  Additionally, a draft amendment to the IP  Act to introduce limitations and 
exceptions to the copyright provisions to facilitate access to printed materials by the visually 
impaired has been approved by the Intellectual Property Advisory Commission and a Cabinet 
Memorandum to this effect has been finalized. However, according to the authorities, the 
Government has not given its approval for this yet. Sri Lanka has not ratified the Marrakesh Treaty 
to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise 
Print Disabled.  
 
G347  
Para 5.1.(b)  Proposed Amendments to the Intellectual Property Act No. 36 of 2003 introducing 
exceptions to copyright provisions facilitating access to printed material by the visually impaired or 
print disabled with a view to ratifying th e Treaty obligations;  
 
Question 1:   
While Congratulating Sri Lanka for the ratification of the Marrakesh VIP Treaty, on October 5th, 
Brazil would like to request additional information on initiatives taken and planned for its 
implementation.  
 
Answer  
Cabine t of Ministers has now approved the proposed amendment. Government of Sri Lanka 
deposited ratification documents on 5th October 2016 which will come into effect in January 2017.  
A subcommittee will be appointed comprising of members representing visually i mpaired persons’ 
and book publishers, to discuss the way forward. A regulation will be published identifying the 
organizations who could engage in preparing Audio copies. Association for Blind Consortium (ABC) 
has under taken to assist Sri Lanka, to provid e assistance for cross border measures (to 
implement exchange of books successfully ). WT/TPR/M/347/Add.1  
 
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  CANADA  
 
Questions from the Secretariat Report  
Page 24 (Para 2.12):  
Sri Lanka’s comprehensive and consistent trade, investment, and related policies are currently 
being d eveloped by the Ministry of Development Strategies and International Trade. A key priority 
identified by the Government at this time is to review and renegotiate existing trade agreements.  
 
Question 1  
Does Sri Lanka have further information on the existin g trade agreements it will be renegotiating?  
 
Answer  
Sri Lanka currently has bilateral trade agreements with India and Pakistan and regional trade 
engagements under SAFTA, APTA and negotiation under BIMSTEC. The country is currently 
pursuing  further expans ion of bilateral FTAs with India and Pakistan which have exceeded over 10 
years . 
 
Page 25 (Box 2.1):  
As listed in the chart of priority activities in industry, trade and investment in 2015, Sri Lanka 
plans to introduce a Trade Regulation Act to replace the  Imports and Exports (Control) Act to 
facilitate trade.  
 
Question: 2  
Does Sri Lanka have any further information to provide on how it expects the introduction of a new 
Trade Regulation Act to facilitate trade?  
 
Answer  
Draft Act on antidumping and Safeguar d legislation in Sri Lanka would be incorporated into the 
new Trade Promotion Act which will repeal the Imports and Exports (control) Act. No. 01 of 1969 
and facilitate the promotion of trade.  
 
Page 26 (Para 2.16)  
The Report by the Secretariat notes that S ri Lanka is not a party to any of the WTO plurilateral 
agreements; it has been an observer to the Agreement on Government Procurement since 2003.  
 
Question: 3  
Does Sri Lanka intend to become party to the WTO GPA within the next five years?  
Answer  
Sri Lank a intends becoming a party to the WTO GPA once it reaches a level of preparedness, 
exposure and competitiveness in international markets.  
 
Page 14 (Para 3.29)  
It is noted Sri Lanka does not apply variable levies or seasonal tariffs. However, agricultural t ariffs 
and Special Commodity Levy rates are modified (or waived) by the Minister of Finance in certain 
instances according to domestic market conditions; these tariff changes could have the same 
results as a seasonal tariff.  
 
Question: 4  
Can Sri Lankan pr ovide information on the main agriculture imports that have received a special 
commodity levy within the last two years?  
 
Answer  
The Special Commodity Levy operates as Sri Lanka's customs tariff for a number (39) of 
agricultural products. This Levy applies  on an MFN basis to imports of these products from all 
sources. The Special Commodity Levy is a single duty, applied only on 39 essential commodities in 
place of Customs Import Duty. On application of Special Commodity Levy, no other duties and 
internal ta xes shall be applicable on those tariff lines. Purpose of the Special Commodity Levy is to 
facilitate the inflow of selected essential commodities.  
 
The main agriculture products which are coming under the Special Commodity Levy are Palm Oil, 
Big Onion, P otato, Lentils, Sugar, Sprats and Dhal.  
 WT/TPR/M/347/Add.1  
 
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  Page 55 (Para 3.62)  
The Report by the Secretariat indicates that there are over 1,400 standards relating to products 
certification scheme, materials, processes and practices. These standards are primary voluntary; 
41 (…) are referred to as technical regulations.  
 
Questions: 5  
Could Sri Lanka provide an overview of its voluntary standards development process? To what 
extent are the voluntary standards based on available international standards?  
 
Answer  
Formulations of national standards are carried out by two separate Divisions of Sri Lanka 
Standards Institution (SLSI) headed by two Directors.  
 
In the formulation of Standards, the policy of the Sri Lanka Standards Institution is to be in line 
with the International S tandards and practices as far as practicable. To this effect International 
Standards are adopted, as Sri Lanka Standards, wherever feasible.  
 
In the selection of Standards formulation projects, priority is given to standards that facilitate 
internal and ex ternal trade and to enhance the international competitiveness of Sri Lankan 
products with the prime objective of safeguarding the interest of the consumer.  
 
Sri Lanka Standards are developed through Committees and as cooperative effort; by negotiations 
and consensus of all interested parties concerned. This is achieved through consultation of various 
expert groups representing manufacturers, consumers/users, Academia, NGOs, Research 
organizations, Public Institutions and Independent Technical Organizations . 
 
The Council of the SLSI appoints Sectoral Committees covering broad subject areas to advise the 
SLSI on standards formulation  and implementation a ctivities. Professionally qualified staff of Sri 
Lanka Standards Institution provides secretarial and technical assistance on matters pertaining to 
principles and procedures of standardization.  
 
Sectoral Committees presently in operation are given below  
 Agriculture  
 Food 
 Chemical  and Polymer Technology  
 Paper, Board and Packaging  
 Textile, Leather and Garments  
 Societal needs   
 Electronic s engineering  
 Electrical Appliances and Accessories  
 Electric Cables and Conductors  
 Information Technology  
 Materials, M echanical Systems and Manufacturing Engineering  
 Building and Construction Materials  
 
A paper advertisement is published in newspapers inviting public comments to the draft standards 
and two months are given as the comment period.  Comments received will b e discussed at the 
Sectoral committees and the finalized version is sent to the Council for Authorization.  
 
From the total No. of 2473  Sri Lanka Standards we have adopted the international standards as 
follows. Total No. of adoptions 1255/ISO,911/IEC, 170/ ASTM,79 /EN and Others 95  
 
Question 6  
Could Sri Lanka explain how Sri Lanka’s technical regulations and conformity assessment are 
developed and adopted?  
 
Answer  
In addition to reply provided to question number 5, the relevant authorities are responsible fo r 
imposing technical regulations (e.g. food advisory committee, import and export controller, WT/TPR/M/347/Add.1  
 
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  consumer affairs authority etc.) SLSI acts as a facilitator by assisting the inspecting and testing 
process in implementing these regulations.  
 
Question 7  
Does Sr i Lanka require regulators to conduct a regulatory impact assessment when they are 
considering drafting new regulations or conformity assessment?  Are trade impacts included in the 
assessment?  
 
Answer  
Consultations are held to assess various elements of im pacts.  
 
Page 55 (Para 3.63)  
The “SLS Marks Scheme”, Sri Lanka’s product certification scheme, enables the SLSI to grant 
permits to eligible local and foreign manufacturers to use the “SLS ” mark on their products. The 
SLS mark certifies that the product ha s been manufactured in accordance with the relevant Sri 
Lankan standard’s specification and verified by regular inspections and tests by the SLSI  
 
Questions: 8  
Could Sri Lanka outline the criteria used by the SLSI to determine the SLS Mark Scheme eligibili ty 
of local and foreign manufacturers?  
 
Answer  
SLS Marks Scheme is a scheme that gives a third party guarantee on quality of a product and 
compliance with the requirements of the specification is assured through regular monitoring of the 
quality assurance  system through audits carried out by qualified Auditors of the Institution and 
product testing. Sri Lanka Standards Institution Act No.6 of 1984, and the regulations made there 
under empower the Sri Lanka Standards Institution to issue such permits to man ufacturers. The 
permit shall be valid for a period of three years.  
 
If two consecutive samples comply with the requirements of the relevant Sri Lanka Standard and 
the company has a Quality Management System in compliance with ISO 9001: 2008, the permit to 
use the SLS Mark will be granted to the manufacturer.  
 
The Product Certification Scheme is voluntary in nature. However, SLS Mark has been made 
mandatory (List attached) through Directions issued under the Consumer Protection Act No. 1 of 
1979 and Consumer  Affairs Authority Act No. 9 of 2003.    
Requirements;  
 
  A Sri Lanka standard Specification shall be available for the product.  
  Manufacturer and the Brand Owner shall be legal entities.  
  The brand shall have registered status.  
  An application shall be pro duct/brand and manufacturing location specific.  
  If the same product under the same brand name is manufactured at more than one 
manufacturing location, applications shall be submitted for all locations simultaneously.  
  For overseas manufacturers, having c ertified against ISO 9001 standard is a prerequisite, 
as product shall conform to the Sri Lanka standard. It is not practicable to carry out 
Surveillance audits once in 06 months as done for local manufactures.  
(Product specific prerequisites shall be fulf illed as relevant)  
 The manufacture shall have sound documented quality management system to consistently 
meet product quality to the relevant standard.  
 
Question 9  
Could Sri Lanka describe the difference between the SLS Mark Scheme and other Sri Lankan 
standards in terms of quality and conformity assessment?  
 
Answer  
Other product Certification Schemes  
 
a) Energy Labeling Scheme  WT/TPR/M/347/Add.1  
 
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  Specification for the label and the method of determination of star rating are specified in SLS 1200 
for Magnetic Ballasts and SLS  1225 for Compact Fluorescent Lamps (CFL’s).  
 
Depending on the energy loss / consumption / conversion efficiency of an appliance the efficiency 
rating shall be determined and designated by a number of stars as per the relevant Sri Lanka 
Standard.  
 
b) Product Certification Scheme For Tea (Pcst)  
 
Sri Lanka Standards Institution (SLSI) in association with the Sri Lanka Tea Board (SLTB) 
operates a Product Certification Scheme to certify the manufacturing process and the final 
product, i.e. Black Tea.   Tea Boa rd Regulations & Sri Lanka Tea Board Standards/ Guidelines 
for Sri Lankan Origin Tea and Sri Lanka Standards (SLS SLS 135:2009, ISO 3720:1986 and 
SLS 1315 - Parts 1& 2) are used in implementing this scheme.    
 
c) System Certification Schemes  
 
 Quality Management System   - ISO 9001 
 Environmental Management System   - ISO 14001  
 HACCP    - SLS 1216  
 Food Safety management System   - ISO 22000  
 Occupational Health & Safety Scheme    - OHSAS 18001  
 Energy Management Scheme   - ISO 50001  
 Supermarket Certifi cation Scheme   - SLS 1432  
 Organic Certification Scheme   - SLS 1324  
 Vegetarian Certification Scheme   - SLS 1460  
 Good Manufacturing Practices Scheme   - GMP (relevant Sri Lanka Standard e.g. SLS 
143 for hygienic practices for food manufacturing)  
 
Question 10  
Can foreign conformity assessment bodies be accredite d by Sri Lanka for certifying to the SLS 
Marks Scheme?  
 
Answer  
Sri Lanka Standards Institution (SLSI) can delegate it’s authority to any accredited conformity 
assessment body to carry out the conformity assessment in accordance with the procedures on 
behal f of SLSI, for SLSI to Grant permits under the SLS marks scheme.  
 
Page 61 (Para 3.91)  
Section 41 of the Consumer Affairs Authority Act permits the Consumer Affairs Council to take into 
consideration the “public interest” when reviewing and authorizing anti competitive practices.  
 
Question: 11  
Could you please provide examples of when public interest considerations were taken into account 
or where they could be used in anti -competitive practices cases?  
 
Answer  
In terms of section 35 of the Act “Anti – compe titive ” practices shall be deemed to prevail where a 
person in the course of business, pursues a course of conduct which of itself or when taken 
together with a course of conduct pursued by persons associated with him, has or is intended to 
have or is like ly have the effect of restricting, distorting  or preventing competition in connection 
with production, supply or acquisition of goods in Sri Lanka or the supply or securing of services in 
Sri Lanka”.  
 
The above definition regarding anti –competitive practi ces covers a wide spectrum of situations and 
one has to consider the following aspects.  
I. That anti -Competitive practices prevails in the course of business conduct;  
II. It could be pursued by one person or by a group;  
III. Such anti -Competitive practice is confined to goods and services provide d in Sri Lanka;  
IV. Such Anti – Competitive practice will restrict, distort or prevent competition;  WT/TPR/M/347/Add.1  
 
- 14 - 
 
  V. Such practices are likely or are intended to have the effect of restricting or preventing 
competition.  
Page 65 (Para 3.110):  
 
As pr oposed in the 2016 Budget, the Government of Sri Lanka envisages the establishment of a 
Central Procurement Agency.  
 
Question: 12  
Is the Sri Lankan Government on target to introduce a Central Procurement Agency; if so, when 
do you envisage the Agency will begin operating?  
 
Answer  
Sri Lanka has already established an Independent National Procurement Commission as one of the 
nine independent commissions under the 19th Amendment to the Constitution. The National 
Procurement Commission has been empowered to str eamline Procurement Policy, Monitoring of 
Public Procurement and Facilitation of Appeal Process related the public procurement.  
 
A policy paper on the proposed Central Procurement Secretariat/Agency referred under the Budget 
Proposal 414/2016 has been plac ed for stakeholders’ consultation.  
 
Page 65 (Para 3.111)  
The Report by the Secretariat notes that in 2010, the Government started implementing a system 
for electronic tendering (e -procurement). Certain aspects of the procurement process were being 
carried  out online, such as the general advertising process, the publication of procurement 
invitations, and the inspection of pre -qualification applications and bidding documents. However, 
the electronic submission of bids was not allowed.  
 
Question: 13  
Could S ri Lanka provide an update on the implementation of its e -procurement system?  
 
Answer  
The report by the Secretariat provides information on the existing E -Procurement Practices in Sri 
Lanka. The electronic submission of the bids and follow up are pending f or implementation subject 
to developing the required supportive infrastructure and process readiness. However, steps have 
already been in place for establishment of the E -Signature Certification Authority, the 
operationalization of National E -Payment Gatew ay and development of required infrastructure 
together with the legislative enactment towards the E -Procurement Process in the future.  
 
Page 93 (Para 4.84)  
 
It is noted that an industrial policy was initiated by the Ministry of Industry and Commerce 
recent ly, but has yet to come to fruition; however a separate policy for SME development was 
recently launched.  
 
Question: 14  
Does the Sri Lankan Government have information on the number of SMEs that have been aided 
through the launch of the SME development po licy? 
 
Answer  
A National Policy Frame Work for SME development formulated by the Ministry of Industry and 
Commerce taking a lead role and the policy has been submitted for the approval of the cabinet of 
ministers. This SME policy is expected to facilitate many SMEs in the following categories.  
         Distribution of the Micro, Small and Medium sector and the persons engaged  
 
 No of establishments  Persons engaged  
 Number  % Number  % 
Micro  935,736  91.99  1,338,675  59.37  
Small  71,126  6.99 529,751  23.49  
Medium 10,405  1.02 386,756  17.14  
Total  1,017,267  100 2,255,182  100 
Source:  Report on listing stage Economic Census 2013/14.  WT/TPR/M/347/Add.1  
 
- 15 - 
 
  CHINA  
 
Questions based on Report by the Secretariat (WT/TPR/S/347)  
Page 9, paragraph 5:  
“Despite efforts to encourage investment, th ere have been no changes in the long -standing 
investment restrictions, some of them applied in many strategic sectors, and more restrictions 
have been put in place such as prohibiting the sale of land to foreigners.”  
 
Question 1:   
Does Sri Lanka have any p lans to relax the long -term investment restrictions, especially in the 
fields of urban  infrastructure  and public utility, transportation, tourism, port and development of 
islands? If a ny, please introduce the plan and the schedule for the relaxation of investment 
restrictions.  
 
Answer  
Western Region Mega Polis plan has now been developed to address critical infrastructure plans of 
the region. The Master plan envisions comprehensive upg rades, overhauls, and enhancements 
across all sectors to achieve the required levels of connectivity, efficiency, speed and 
reliability.Information on investment opportunities available under this plan is available at  
http://www.megapolis.gov.lk/masterplan.php  in the areas of transport, energy , water and many 
others . 
 
Page 9, paragraph 7:  
“Sri Lanka's trade measures on imports focus on tariffs, import licenses, and additional charges 
and taxes.”  
 
Page 9, paragraph 9:  
“Sri Lanka has in place a large number of additional levies and charges that are applied in addition 
to the tariff on a wide variety of products.”  
 
Question 2:   
Will the trade measures taken by Sri Lanka for applying import licenses and collecting additional 
levies and charges unduly restrict or impede relevant trade? Are these measures consistent with 
the related WTO rules and obligations of the WTO members?  
 
Answer  
Sri Lanka has no trade restrictions but has adopted a number of licensi ng requirements for 
importation of a few selected goods considering their impact on the public health, national and 
global security and environment. These measures are applied on non -discriminatory basis in 
consistent with WTO Rules and obligations. Charge s are collected from services rendered which are 
very lowest charges in the region and also consistent with the WTO Rules and obligations.   
 
The objectives of levies and taxes are to apply them on non -discriminatory basis. Sri Lanka's 
excise duty, value ad ded tax, and nation building tax are applied equally to both imported and 
domestic goods and do not give rise to any concerns under Sri Lanka's national treatment 
obligations.  
 
Question 3:  
Please introduce whether the application of import licensing proced ures is administered in a fair 
and equitable manner in Sri Lanka.  
 
Answer  
Sri Lanka's  import licensing procedures are transparent and administered in a fair and equitable 
manner . 
 
Page 10, paragraph 12:  
“Export incentives include tax and various fiscal inc entives, a duty drawback scheme, a Temporary 
Importation for Export Processing (TIEP) Scheme, and a manufacture in bond scheme.”  
 
Page 10, paragraph 16:  
“Sri Lanka's agricultural sector remains an important contributor to the economy and trade, 
accounting for nearly 9% of GDP and about one fourth of total exports. A number of policy WT/TPR/M/347/Add.1  
 
- 16 - 
 
  instruments are used in the sector, such as a special commodity levy; export cess; subsidies, 
notably the fertilizer subsidy; and tariffs.”  
 
Question 4 : 
Does the export incentiv es including the policy instruments used in the agricultural sector comply 
with the WTO rules? Please provide details.  
 
Answer:  
Sri Lanka does not maintain incentives such as export subsidies in the agriculture sector. The 
Fertilizer subsidy is a generally  available subsidy which is categorized as a Green Box subsidy.  
 
Question 5:   
Could Sri Lanka please introduce the direction of adjustment in its export incentives in the future?  
 
Answer  
Sri Lanka suspended the incentive scheme that insisted upon export r equirements. A new 
incentive policy is being developed which will be neutral and horizontal in application which is also 
competitive with incentives provided by other countries, whilst being WTO compliant.  
 
Page 40, paragraph 3.1:  
“During the period under review, the main change to import procedures in Sri Lanka was the 
implementation of a single window system in January 2016. ”  
 
Question 6 :  
Please introduce which department is in charge of the single window, which departments are 
involved and how about th e way of implementation and specific results.  
 
Answer  
Department of Customs is in charge of the single window facilitates online processing of 
documentation relating to import and export and thereby reducing the trade cost. The system will 
be further impro ved under Category “C” implementation requirements of the TFA.  
 
Other Government’s Departments involved are(1) Imports and Exports Control Department,(2) Sri 
Lanka Standards Institute,(3)Sri Lanka Tea Board,(4) Department of Animal Production and 
Health,(5 ) Coconut Development Authority,(6) Department of Trade and Investment Policy,(7) 
Inland Revenue Department,(8) Registrar of Motor Vehicle,(9) Department of Fisheries and Aquatic 
Resources,(10) Department of Wildlife  Conservation,(11) Food Control Adminis tration Unit of the 
Ministry of Health,(12) Consumer Affairs Authority,(13) Department of Agriculture,(14)Forest 
Department,(15) Telecommunication Regulatory Authority,(18) Ministry of Agriculture ,(19) 
Department of Indigenous Medicine,(20) National Film Corporation.  
 
There are two ways of implementation (1) connecting through own web service and (2) connecting 
through the administrative selectivity module of ASYCUDA World system.  
 
Specific result is to get online license, approvals, permits and duty conce ssions etc to Customs 
Computer system.  
 
Page 60, paragraph 3.86:  
“The authorities also took a decision to establish an Exim Bank so as to provide financial assistance 
to exporters and importers, and to promote international trade in goods, services, and ca pital.”  
 
Question 7:   
What kind of support policy does the government of Sri Lanka intend to provide for the proposed 
Exim Bank?  
 
Answer  
The Exim Bank is a proposal of the Budget 2016. Actions would be initiated in the coming year to 
establish the EXIM ban k with some seed capital from the government.  
 
Question 8:   
What are the areas and specific ways of the support for the proposed Exim Bank?  
 WT/TPR/M/347/Add.1  
 
- 17 - 
 
  Answer  
Areas and specific ways of support are in the process of being  finalized.  
 
Page 102, paragraph 4.120:  
“About half of LCBs are foreign banks, although the number of branches of foreign banks is 
considerably lower than the number of branches of domestic banks; i.e. 220 versus 2,694 (Table 
4.20). Increased demand for credit increased the asset growth and improve d the financial 
performance of banks in recent years. ”  
 
Question 9:   
What are the policies of Sri Lanka regarding the access of foreign banks and establishment of their 
branches ? 
 
Answer  
Any application submitted will be evaluated based on the legal requi rements and policy 
considerations given the merits of each application on a case -by-case basis and the evaluation 
process will focus on the suitability of the applicant having regard to the interests of the national 
economy, including the banking needs of Sri Lanka.  
 
Any specific areas which require the attention of any new entrants, including branches of foreign 
banks will be specified in the license issued by the Central Bank to engage in the banking business. 
At present, all foreign banks in Sri Lanka o perate as branches. The minimum entry capital 
requirement of Rs. 5 bn., however is being presently reviewed.  
 
The existing Guidelines on Opening of New Banks in Sri Lanka can be accessed from the following 
link: http://www.cbsl.gov.lk/pics_n_docs/09_lr/_docs/licensing/bsd_licensing.pdf . 
 
In terms of the provisions of the Banking Act, opening, relocation and closing down of any 
branches and ATMs require the prior writt en approval of the Central Bank and the concurrence of 
the relevant Minister. All banks operating in Sri Lanka, including foreign banks are required to 
establish two branches outside the Western Province for each new branch established in the 
Western Provi nce. 
 
Question 10:   
What’s your comment on the role played by foreign banks in the economic and social development 
of Sri Lanka?  
 
Answer  
Except larger foreign banks, other foreign banks cater to a niche customer segment of the 
economy and engage in selecte d banking activities. Foreign banks have been arranging syndicate 
loans and granting loans for infrastructure development. However, the Central Bank expects 
foreign banks in Sri Lanka to demonstrate greater participation in economic activities and to make 
a significant contribution to the economy.  
 
Question 11:   
Are there any plans and measures for further opening up?  
 
Answer  
Any decision pertaining to opening the financial services sector to foreign parties shall be done at a 
national level in line with th e economic policy direction of the Government. There are no 
restrictions and foreign banks can be permitted to engage in banking business on a case by case 
basis.  
 
Page 113, paragraph 4.162:  
“For computer reservation services, marketing and selling of air transport services, aircraft repair 
and maintenance, ground handling services, and airport management services, Sri Lanka does not 
have any restrictions or limitations on foreign participation in these subsectors but they are subject 
to obtaining the requi red licensing and approvals. ”  
 
Question 12:   
Are there any restrictions on the access of foreign investment into such sectors of c ivil aviation 
services like airport, air traffic management and aviation  fuel? If any, what are they specifically? WT/TPR/M/347/Add.1  
 
- 18 - 
 
  Does Sri Lanka have any plans and schedule for further opening up?  
 
Answer  
At the moment, this is a regulated area which requires the approval from the Ministry of Transport 
and Civil Aviation. The Civil Aviation Act (No. 14 of 2010) specifies that companies with foreign 
shareholding can only be registered in Sri Lanka for this service if such shareholding is minority 
(i.e. 49% foreign -51% local and below).  
 
Questions based on Report by Sri Lanka  (WT/TPR/G/347)  
Page 7, paragraph 4.2:  
“Further, future measures would be sought to optimize the utilization of manufacturing and 
services opportunities available in the regional and global trading and investment arena while 
maintaining an appropriate poli cy space for strengthening and developing the domestic industry.”  
 
Question 13:  
Please explain the concrete content of “appropriate policy space for strengthening and developing 
the domestic industry”.  
 
Answer  
Sri Lanka seeks an appropriate policy space f or strengthening and developing the domestic 
industry with the objective of achieving the country’s sustainable development goals, during the 
country’s bilateral and regional trade engagements, particularly in consideration of economic 
asymmetries between Sri Lanka and its negotiating partners.  
 
Question 14:   
What kind of measures will be adopted by the authorities of Sri Lanka to ensure the consistency 
between the foreign trade policy and the domestic industry policy?  
 
Answer  
Sri Lanka’s domestic industry  policy is complemented by its foreign trade policy. Sri Lanka 
therefore, continuously maintains consistency between the two policies.  
 
Page 8, paragraph 4.12  
“Trade in services, intellectual property, government procurement, trade facilitation and customs  
valuation, Agreement on information technology, e -commerce are prominent new areas of 
consideration for the country's proactive engagement.”  
 
Question 1 5: 
Is trade in services of traditional Chinese medicine included in the area of trade in services 
activities that Sri Lanka would like to proactively engage in?  
 
Answer  
This area has not been seriously considered by Sri Lanka for trade in services negotiations as yet.  
 
Page 9, paragraph 4.13:  
“The National Committee on Trade Facilitation (NCTF) has also bee n setup with joint participation 
of relevant government institutions and the private sector.”  
 
Question 16:   
Please introduce the specific structure and operational mechanism of NCTF, especially the role of 
businesses in it.  
 
Answer  
The Terms of Reference of the NCTF is being drafted specifying the roles and responsibilities of the 
Members of the NCTF. The NCTF is expected to coordinate all TFA implementation -related activities 
with other stakeholders. The NCTF IS CO -Chaired by the Director General of Custo ms and the 
Director General of Commerce. There are other twelve government agencies and seven trade 
chambers in the Committee. Each member has nominated one or more representatives to the 
technical committee of the NCTF. The NCTF meets regularly to discuss  matters relating to 
implementation of the WTO –TFA. Progress of the implementation of the WTO TFA is to be 
informed to the Agency of International Trade in the Ministry of Development Strategies and 
International Trade.  WT/TPR/M/347/Add.1  
 
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  CHINESE TAIPEI  
 
PART I: REGARDING THE SECRETARIAT REPORT (WT/TPR/S/347)  
3. TRADE POLICIES AND PRACTICES BY MEASURE  
3.1 Measures directly affecting imports  
3.1.9 Sanitary and phytosanitary measures  
 
Page 56 (Para 3.69)  
Plant imports are covered by the Plant Protection Act No. 35 of 1999 and  its regulations in relation 
to plant quarantine activities. The Act is administered by the National Plant Quarantine Service in 
the Department of Agriculture. Plant imports need to be accompanied by a permit, issued by the 
Director General of Agriculture or the Additional Director of the National Plant Quarantine Service. 
Permits are issued immediately for vegetable seeds that are included in an approved list, which is 
published in newspapers periodically. In addition, consignments must also be accompanied  by: a 
phytosanitary certificate issued within 14 days prior to shipment; an International Safe Transit 
Association (ISTA) certificate; a declaration stating that the consignment is free of soil, certain 
pests and seed treatment; and a certificate of origi n. Imports of fresh fruits and vegetables for 
human consumption must be accompanied by a certificate from the plant protection authority of 
the country of origin stating that the fruit has been in cold storage for more than two weeks. 
Certificates from cou ntries having an incidence of fruit flies are not accepted. The consignment is 
subject to inspection by a Plant Quarantine Officer.  
 
Question 1  
Could Sri Lanka provide the scientific reasons why imports of fresh fruits and vegetables for 
human consumption must be accompanied by a certificate from the plant protection authority of 
the country of origin stating that the fruit has been in cold storage for more than two weeks?  
 
Answer  
1. The proposed cold treatment is effective to destroy the juvenile stages (i ncluding the 
parasitoids/hperparasitoids) of fruit flies and prevent the completion of the life cycle and escape as 
adults to the environment.  
 
2. Fruit flies (categorized broadly as melon fruit flies and fruit flies) are highly destructive pests 
of many f ruits and cucurbit vegetables in Sri Lanka  
 
3. Fruit flies are polyphagous; they have a wide host range including many wild plants and 
endemic species. Therefore  fruit flies can multiple in abundance even in the absence of fruits 
grown for consumption  
 
4. Sri Lanka will have to impose especial restrictions when importing fruits and vegetables for 
consumption. This would help prevent any risk of entering fruit flies (alien invasive or otherwise) 
to the country through undetected infested fruits/ vegetables .  One such mechanism of alien fruit 
flies gaining access to the country is the discarded remains of fruits and vegetables in the market 
or at household level  
 
5. These alien fruit flies could be of the same species present in Sri Lanka but of different 
biotypes capable of withstanding insecticides or other intervention approaches use to control them. 
More importantly the accidentally introduced fruit flies may be physiologically more fitting to the 
climatic conditions in the country.  
 
6. Fruits and vegetab les infested with eggs or early stages of larvae cannot be detected easily, 
making unnoticed entry of these pests difficult to control.  
 
7. Sri Lanka imposes these Fruit Fly Exclusion and Detection Programs to protect the health 
and value of Sri Lanka’s ag ricultural resources that could be threatened by the establishment of 
exotic fruit fly populations.  
 
8. Further an area wide Fruit Fly eradication program has been established in Sri Lanka since 
2014 by the Department of Agriculture in consultation with t he Export Development Board, the 
growers’ and exporters; associations. This program has been successful in exporting fruits and 
vegetables free from fruit fly infestations.  
 WT/TPR/M/347/Add.1  
 
- 20 - 
 
  Question 2  
According to the statement in this paragraph, certificates from countri es having an incidence of 
fruit flies are not accepted. Could Sri Lanka provide the scientific names of the concerned fruit flies 
and any quarantine requirements of pest free area recognition for fruits flies of concern?  
 
Answer  
1. In order to import fruit s and vegetables to Sri Lanka, we require declaration certificate to 
the effect that he fruits have been produced in an area free from fruit flies of genera Anastrepha, 
Ceratities, Rhagoletis and the following fruit fl ies under the genus Bactrocera;  Bactro cera jarvisi, 
Bactrocera musae, Bactrocera neohumeralis, Bactrocera papayae, Bactrocera philippiensis and 
Bactrocera tryoni as verified by an official survey, and transferred to the ship in a manner to 
preclude infestation en route  
 
2. The cold storage tra nsport alone would not be sufficient if the above mentioned fruit flies are 
present in the exporting country, as such Sri Lanka requires taking the above extra precautionary 
measures to prevent the alien (invasive) species gaining entry to the country.  
 
3. The disinfestations methods recommended for fruit fly control include methyl bromide 
fumigation, cold treatment or irradiation. Methyl bromide is phytotoxic to fruit and shortens self -
life and negatively affect on the quality of the fruit. According to th e Montreal Protocol limitations 
have been imposed on the use of methyl bromide. On the other hand cold storage on fruit quality 
is minimal. Therefore cold storage can be approved for disinfestations of most of the fruit flies, but 
the life stages of some s pecies may not be destroyed as expected. Therefore Sri Lanka recognizes 
cold treatment as a quarantine treatment for the importation of fresh fruits to the country.  
 
IV. TRADE POLICY BY SECTORS  
4.2  Mining and energy  
4.2.2 Energy  
4.2.2.4 Electricity  
 
Page 90 (Para 4.70)  
Developments during the review period mainly involved establishing new power generation 
facilities pursuant to the CEB's Long -Term Generation Expansion Plan (2013 –32). Competitive 
bidding was also introduced for the state enterprises in the sector.  
 
Question 3  
Could you please to provide more information on the Ceylon Electricity Board’s (CEB’s) Long -Term 
Generation Expansion Plan (2013 -32) 
 
Answer  
At present Ceylon Electricity Board has published a Long – Term Generation Expansion plan for t he 
period of 2015 – 203 4. Which can be obtained from the Ceylon Electricity Board website that is 
www.ceb.lk/publications . 
 
Question 4  Would Sri Lanka government explain why and how the competitive bidding is 
introduced under the CEB’s Long -Term Generation Expansion Plan (2013 -32)? 
 
Answer  
The electricity sector is governed by Sri Lanka Electricity Act and No 20 of 2009 subsequent 
amendment No. 35 of 2013.  According to the legal provisions it is necessary to f ollow competitive 
bidding process and also according to government procurement guidelines it is must to follow 
competitive bidding process, in order to enhance the competition to gain economic benefits to the 
country.  
 
IV. TRADE POLICY BY SECTORS  
4.2 Minin g and energy  
4.2.2 Energy  
4.2.2.5 Petroleum  
 
Page 91 (Para 4.77)  
Other developments during the period include the issuance of the "Sri Lanka Upstream Petroleum 
Local Content Guidelines" in 2013, which were necessitated after the oil and gas exploration WT/TPR/M/347/Add.1  
 
- 21 - 
 
  activities recommenced. The objectives of the Guidelines provide for maximum employment 
opportunities for Sri Lankan nationals, improve local capacity building, and increase the 
competitiveness of the local business community in the sector. Thus, the PRDS req uires that every 
contractor, operator, sub -contractor, alliance partner and other foreign entity involved in oil or gas 
projects:  
 
• Consider local content as an important element of their overall project development and 
management philosophy;  
• Submit an annual Local Content Development (LCD) Plan, for review and approval by the 
Ministry of Petroleum Resources Development, outlining planned local goods and services 
sourcing, employment, education, training, and R&D opportunities earmarked for Sri Lankan 
nationals;  
• Submit a verifiable Local Content Report outlining the progress in utilizing Sri Lankan 
resources during the preceding financial year; and  
• Under specific terms of a Bid Inviting Document, develop and submit a conceptual Local 
Content Developme nt Plan based on the Guidelines as part of the bid package.  
 
Question 5  
Could you please to provide detailed information regarding the Bid Inviting Document under the 
Local Content Guidelines? Are the local content considerations a mandatory requirement un der the 
Guidelines?  
 
Answer  
The bid inviting document from the 2013 Licensing Round will soon be superseded by one created 
for Sri Lanka’s 3rd Licensing Round, planned for the first half of 2017.  However, the Local Content 
Guidelines themselves are unlike ly to change, so a similar treatment of LC development as to that 
in the 2013 LR can be envisaged. Sri Lanka crafted flexible and non -prescriptive LC guidelines for 
the nascent stage of the national upstream industry, and these continue to be guidelines an d not 
rules. As such they are not mandatory but merely a matter for consideration.  
 
Question 6  
Is the annual Local Content Development Plan submitted for the review and approval a 
requirement under the Local Content Guidelines? What is the legal effect of the approval of such 
plans?  
 
Answer  
The annual LC development plan is part of the bid documents solicited rather than part of the LC 
guidelines. As such, the response to Q1 above is applicable; ie that the submitted LCD plan will be 
evaluated and scored. T herefore, once a Petroleum Resources Agreement (PRA) has been signed 
between the Government and an investor, we consider the LCD plan enforceable, although the 
PRDS will remain collaborative in its approach.  WT/TPR/M/347/Add.1  
 
- 22 - 
 
  EUROPEAN UNION  
 
3 TRADE POLICIES AND PRACTICES BY MEASURE  
3.1.5.5 Excise Duty  
Paragraph 3.31, page 49  
According to the report, motor vehicles are subject to an excise duty. In May 2016, Sri Lanka 
introduced a revised excise duty structure for motor vehicles based on engine size. The new 
system imposes an excise duty that could go up to 700% of the value of the actual manufacturer’s 
price for a 3500 cc engine, or 400% for a smaller engine size vehicle of 1999 cc. While the excise 
duties are not discriminatory per se, as they also affect domestic producer s, the EU considers that 
these excise duties are prohibitive and act as a deterrent to potential customers.  
EU  
 
Questions No 1 -2:  
Could Sri Lanka present the rationale for the imposition of such a high excise duty that could go up 
to 700% of the value o f the actual manufacturer’s price for a 3500 cc engine, or 400% for a 
smaller engine size vehicle of 1999 cc? Could Sri Lanka indicate why only engine size was withheld 
as criterion for the duty, and not more environmentally relevant criteria like fuel eff iciency?  
 
Answer  
Duty structure on motor vehicles in Sri Lanka is basically promoting importation and use of new 
generation of motor vehicles with alternative energy use and environmental friendliness which are 
suitable for Sri Lankan road networks. For ex ample exercise duty on 3500 CC (diesel) is 660% 
while 3500 CC hybrid vehicle is 311%.  
 
The environment criteria proposed by the EU Delegation is one of the factors, Sri Lanka has 
seriously considered with the EU standards to introduce necessary legislativ e framework to 
introduce standards for motor vehicles.  
 
The existing policy has been made by considering various factors such as affordability, existing 
infrastructure including road networks, motor vehicle - people ratio (Motor Vehicle - People Ratio is 
1:3 in Sri Lanka), equity principle of taxation, evading taxation through under -invoicing and 
under -valuation.  
 
3.3.2.1 Price regulation  
Paragraph 3.94, page 61  
According to the report, all drugs registered with the National Medicines Regulatory Authorities  are 
subject to price regulation indefinitely. According to the media, the Sri Lankan Ministry of Health in 
coordination with the Ministry of Finance have announced that they are planning to introduce a 
new pricing formula to control the prices of pharmace utical products, setting a maximum retail 
price based on current median prices in the market that would represent a trade restriction for the 
EU imported products or may even push EU products out of the market.  
 
EU questions No 3 -4:  
Could Sri Lanka presen t an update on the state of play of this piece of legislation?  
 
Answer  
The new regulation has come into effect on 21st October 2016 with the publication of Extra 
Ordinary Gazette Notification No. 1989/61.  
 
Could Sri Lanka explain how this measure would co mply with WTO rules, in particular with Art. 
III.4 of the GATT?  
 
Answer  
The proposed MRP will apply on non -discriminatory basis on all manufacturers, importers, and 
trader or pharmacists.  
 
3.3.5 Intellectual property rights  
Reference is done to the on -going legislative process for the adoption of a new law on the 
protection of plant varieties.  
 WT/TPR/M/347/Add.1  
 
- 23 - 
 
  EU question No 5:   
Could Sri Lanka clarify whether its authorities are still working on a new piece of legislation and 
when Sri Lanka plans to adopt this new legis lation on the protection of plant varieties?  
 
Answer  
This draft law is under consideration by Ministry of Agriculture and adoption of the new legislation 
is in the process.  
 
3.3.5.2 Patents  
Paragraph 3.117, page 66  
According to the report, certain invent ions are not patentable in Sri Lanka.  
 
EU question No 6 : 
Could Sri Lanka explain in detail what the exceptions to patentable matter are?  
 
Answer  
(a) Discoveries, scientific theories and mathematical methods;  
(b) Plants, animals and other microorganism and an esse ntially biological process for the 
production of plants and animals other than non -biological and microbiological processes:  
Provided however, that a patent granted in respect of micro - organisms shall be subject to 
the provisions of this Act;  
 
(c) Schemes, ru les or methods for doing business, performing purely mental acts or playing 
games;  
(d) Methods for the treatment of the human or animal body by surgery or therapy, and 
diagnostic methods practiced on the human or animal body:  
Provided however, any product used  in any such method shall be patentable;  
 
(e) An invention which is useful in the utilization of special nuclear material or atomic energy 
in an atomic weapon;  
(f) Any invention, the prevention within Sri Lanka of the commercial exploitation of which is 
necessary to protect the public order, morality including the protection of human, animal 
or plant life or health or the avoidance of serious prejudice to the environment.  
Paragraph 3.120, page 67  
The secretariat reports explains that, if the use of a patent licen ce is considered anti -competitive, 
the Director General of NIPO may authorize any person, body of persons, government department 
or statutory body to exploit the patent without a licence from the owner of the patent.  
 
EU question No 7:   
Could Sri Lanka exp lain what are the criteria used by the Sri Lankan authorities for assessing the 
anti-competitiveness of a patent that would then give the right to authorise its exploitation without 
a licence from the owner of the patent?  
 
Answer  
In a situation of national  emergency or any other circumstances of extreme urgency or in case of 
public non -commercial use for the purposes such as national security, nutrition, health or for the 
development of others vital section of the national economy  
 
3.3.5.5 Geographical indi cations  
Pages 68 and subs.  
 
EU questions No 8 -9:  
Could Sri Lanka explain how foreign GIs can be registered and consequently protected in Sri 
Lanka? Is the direct registration of such GIs on the basis of the Act possible?  
 WT/TPR/M/347/Add.1  
 
- 24 - 
 
  Answer  
Foreign GIs can be curre ntly registered as certification marks. By 2018 it is expected to propose a 
comprehensive Legal frame work for Gis as per provisions of  TRIPS . 
 
EU question No 10:  
Could Sri Lanka clarify if in the sentence 'In the case of similar GIs, protection is accord ed to each 
indication' the term 'similar' shall be understood as 'homonymous'?  
 
Answer  
Yes. 
 
EU questions No 11 -12:  
The EU would also like to obtain clarifications on how the relations between GIs and trademarks 
are regulated, in particular:  
 
Can the reg istration of a trademark which contains or consists of a geographical indication with 
respect to goods not originating in the territory indicated be refused or invalidated, if use of the 
indication in the trademark for such goods is of such a nature as to mislead the public as to the 
true place of origin? , and Is the coexistence between a GI and a prior trade mark possible? If yes, 
under what conditions (if any)?  
 
Answer  
When GI registration takes place trademark database also will be examined depending on  the class 
of goods.  
 
WT/TPR/G/347 – Government Report  
5 INTELLECTUAL PROPERTY (IP)  
Paragraph 5.1, page 9  
According to the report, Sri Lanka is currently implementing an "IP hub" project with the 
assistance of WIPO. The report indicates the project include s IP policy formulation, upgrading, 
modernization of the National Intellectual Property Office (NIPO) including upgrading of the IP 
Automated System (IPAS).  
 
EU question No 13:  
Could Sri Lanka explain in more detail what the IP hub will be responsible fo r and whether it will 
be a permanent structure?  
 
Answer  
The project is  to create an enabling Intellectual Property environment to increase the capacity and 
pace for technology scouting, absorption, adaptation and innovation. The project will enable 
different training opportunities from WIPO for universities and research institutions in the 
developing countries to achieve a more cumulative and sustainable impact on beneficiary 
countries . WT/TPR/M/347/Add.1  
 
- 25 - 
 
  NEW  ZEALAND  
 
REPORT BY THE WTO SECRETARIAT (WT/TPR/S/347)  
(2) TRADE A ND INVESTMENT REGIME  
2.1 General Framework and Policy  
Paragraph 3  of the report states that the Sri Lankan Government aims to ‘reduce the reliance on 
agriculture in order to focus on development of the services and industrial sectors’. Paragraph 2.10 
goes on to say that ‘the main shift envisioned was a reliance on agriculture in the initial phase to 
start a rapid recovery… it was anticipated that the share of agriculture in GDP was to be eventually 
consolidated at 12%, industry at 28 -30%, and services at ar ound 60% by 2016. As of 2015, the 
share of agriculture, industry, and services to GDP was at 7.9%, 26.2% and 56.6% respectively’.  
 
Question 1  
New Zealand notes from the Secretariat’s report that Sri Lanka wants to reduce its reliance on the 
agriculture se ctor and that it has almost reached the target GDP shares it set for the services and 
industrial sectors. Along with diversifying the economy and successfully expanding focus on the 
services and industrial sectors, has Sri Lanka considered further reform f or the agriculture sector, 
including reducing government intervention under programmes such as those reported by the 
Secretariat in paragraph 4.16?  
 
Answer  
The Sri Lanka’s current position is not to reduce the reliance on agriculture but to consolidate 
agriculture sector with the aim of increasing its contribution to 12% of the GDP. The Government 
of Sri Lanka’s intervention in agriculture is at minimum level and on the basis of ensuring rural 
livelihood, food security and sustainability . 
Sri Lanka propose s to reform agriculture sector in following areas  
o Farm mechanization through introducing machinery and tools  
o Intensive cultivation and irrigation techniques/systems are introduced  
o Soil Fertility and soil and moisture conservation, site specific fertilizer application 
and recommendation.  
o High quality planting material industry, tissue culture and bio tech approaches  
o Eco-friendly agriculture and conservation, traditional agro -technique, heritage 
conservation site  
o Agro –processing, product development, quality  assurance  
o Low interest credit and machine grants, micro -credit revolving funds  
o Promotion of healthy food, minimizing agro chemical and fertilizer/promoting 
organic agriculture  
o Good Agriculture Practices -food safety concern, certification, branding  
o Market Promotion  
The way forward in agriculture sector in Sri Lanka mainly looks at the transformation towards the 
commercialization with technological innovations to achieve an inclusive and sustainable growth, 
ensuing the foods security of the people while enh ancing the drive of competitiveness, targeting 
the international market.  
 
In line with the future direction of the sector, the government initiatives are mainly concentrated 
on filling the gaps to increase the competitiveness in the sector with increased production and the 
productivity. Other measures include the establishment of mega zones and Techno Parks , fiscal 
and financial incentives with simplified systems and procedures that will encourage private sector 
involve ment in the SME sector including agri culture production and value addition. The Good 
Agricultural Practices (GAP) are given due consideration for ensuring quality of the produce, which 
catalyse the entering into international market.  The proposed marketing authority will bridge the 
gaps in v alue chain and ensure more effective marketing network enable the farmers to harness 
the full benefit of their business. The market forces are enabled to decide the market price of 
commodities. This will lead for fair competition within the private sector benefiting the producers 
as well as the consumers.  
 
In order to maintain the sustainable fishery industry and to stay in the international market 
competitively, maintaining a scheme for quality assurance and complying with international 
regulations are no w being given due consideration.  WT/TPR/M/347/Add.1  
 
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  (3) TRADE POLICIES AND PRACTICES BY MEASURE  
3.1.1 Customs Procedures and Requirements  
Paragraph 3.6  of the report states that the decisions of the Customs Department Imports 
Division Secretariat (“D Branch”) are final. Th is suggests that there is no provision for judicial 
review.  
 
Question 2  
Is there any avenue for judicial review of decisions taken by the Customs Department Imports 
Division Secretariat?  
 
Answer  
Avenues for judicial review exist for decisions of the Custo ms Department Import Division D -
Branch (now known as Declaration directorate) or any other division of the Customs Department.  
 
Paragraph 3.7  states that the Specialized Services Directorate gives pre -import classification 
rulings on commodities, which is  binding for a period of six months.  
 
Question 3  
Would Sri Lanka consider making the validity period for advance rulings by the Specialized 
Services Directorate longer than six months?  
 
Answer  
Specialized Service Directorate gives pre -import classificatio n ruling on commodities, which is 
binding for period of one year.  
 
3.1.4 Tariff bindings  
Paragraph 8 of the Secretariat’s report states that ‘Sri Lanka has amended its tariffs during the 
last review period. This has deteriorated since the last review with the MFN rate exceeding the 
bound rate on 132 lines in 2016, up from 103 lines in 2010’. Paragraph 3.17 further states that 
‘corrective measures would be undertaken’.  
 
Question 4  
a) According to the Secretariat report, the number of tariff lines exceeding t he bound rate has 
increased from 103 lines to 132 lines in the last review period. Please explain Sri Lanka’s view on 
the conformity of these tariffs with its obligation under WTO Agreements and what corrective 
measures are being undertaken to address thes e. 
Answer  
A total of 97 out of 132 tariff lines have exceeded the bound rates due the revision and reduction 
of tariff bands from 5 band tariff system to 4 band tariff system and finally 3 band tariff system in 
November 2015.  
 
Required follow up has alread y been taken to adjust those 91 tariff lines in par with the Sri Lanka’s 
bound rates commitments to WTO under the Revenue Protection Order with the budget 2017.  
 
A total of 35 tariff lines classified under the Chapter 22 and 24 mainly on tobacco and alcoh ol have 
been assigned with higher duty rates on MFN basis, taking into account public health and social 
issues.  
 
b) New Zealand welcomes the recent reduction in Sri Lanka’s applied tariffs for dairy products 
as a step in the right direction. Can Sri Lanka  please advise what remaining steps need to be taken 
to return its applied tariffs back in line with its WTO bindings and when these can be expected to 
happen?  
 
Answer  
Government of Sri Lanka has already explained set of compelling factors behind the tarif f structure 
on dairy products to the New Zealand delegation bilaterally as well as at the WTO Committee 
Meetings.  
 
The existing duty structure of 20% or Rs. 225 / Kg has been framed, with duty waivers according 
to global market price trends, in considerat ion with various factors such as global market 
fluctuations, milk products as essential commodity, livelihood and sustainability of domestic dairy WT/TPR/M/347/Add.1  
 
- 27 - 
 
  production as a cottage industry, government investment on the dairy industry. Therefore Sri 
Lanka proposes e xploring alternate measures under the WTO provisions.  
 
3.1.5 Other charges affecting imports  
Paragraph 3.24  of the report states that ‘In addition to the tariff on a wide variety of products; 
these include the Export Development Board Levy (CESS), Excise D uty, Value Added Tax (VAT), 
Ports and Airports Development Levy, Nation Building Tax, port handling charges and the Special 
Commodity Levy. Cumulatively, these significantly increase the cost of importing and, in some 
cases, can exceed 100% of the c.i.f. v alue. The Report further states in paragraph 9 of the 
Summary that ‘The Excise Duty, VAT, and Nation Building Tax apply to both imported and 
domestic goods while the others are charge on imported goods’.  
 
Question 5  
a) New Zealand notes from the Secretari at’s report that Sri Lanka’s additional levies and 
charges, namely the Export Development Board Levy, Ports and Airports Development Levy and 
the Special Commodity Levy, are discriminatory towards imported goods. Can Sri Lanka please 
explain how the way th ese levies and charges are administered is consistent with the principle of 
non-discrimination (Article 3(4) of the GATT)?  
 
Answer  
The additional levies namely the Export Development Board Levy ("CESS"), and the Ports and 
Airport Development Levy are appl ied at the border.  Sri Lanka is reviewing these levies and it is 
expected that the CESS and the Ports and Airport Development Levy will be phased out. Towards 
this objective, the Government through its budget of 2017 proposes phasing out of CESS.  
 
The Sp ecial Commodity Levy operates as Sri Lanka's customs tariff for a number (39) of 
agricultural products. This Levy applies on an MFN basis to imports of these products from all 
sources. The Special Commodity Levy is a single duty, applied only on 39 essenti al commodities in 
place of Customs Import Duty. On application of Special Commodity Levy, no any other duties and 
internal taxes shall be applicable on those tariff lines. Purpose of the Special Commodity Levy is to 
facilitate the inflow of selected essent ial commodities taking into account domestic economic 
sensitivities.  
 
b) Can Sri Lanka also advise whether these levies and charges are collected for cost recovery 
purposes?  
 
Answer  
Charges are being collected on cost recovery basis consistent with the WT O Rules.  
 
c) Does Sri Lanka plan any reforms to reduce the discriminatory nature of these measures?  
 
Answer  
With regard to measures namely, the Export Development Board Levy ("CESS") and the Ports and 
Airport Development Levy, are applied at the border.  S ri Lanka is reviewing these measures and it 
is expected that the CESS and the Ports and Airport Development Levy will be phased out. 
Towards this objective, the Government through its budget of 2017 proposes phasing out of CESS.  
 
3.3.4 Government Procurem ent 
Paragraph 3.100 of the Report states that Sri Lanka has participated as an observer to the WTO 
Agreement on Government Procurement (GPA) since 2003. Paragraph 3.105 outlines Sri Lanka’s 
price preferences for locally manufactured goods, a policy that do es not align with the GPA’s non -
discrimination principle.  
 
Question 6:  
What steps has Sri Lanka taken to date, and intends to take in the future, towards aligning its 
government procurement regime with the GPA requirements?  
 
Answer  
Sri Lanka is currently not a member to GPA. Once Sri Lanka becomes a member, the Government 
Procurement regime will be aligned with the GPA requirements.  WT/TPR/M/347/Add.1  
 
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  (4) TRADE POLICIES BY SECTOR  
4.1 Agriculture and Fisheries  
WT/TPR/S/347, sections 4.1.1.1 and 4.1.1.4, page 71, 75, paragrap h 4.3, 4.9  
 
Paragraph 4.3  of the report states that the Government’s new agricultural policy ‘aims to make 
the country self -sufficient in maize, soya beans, chillies, onions and potatoes by 2018’.  
 
Paragraph 4.9  goes on to say that ‘Sri Lanka introduced a Special Commodity Levy on certain 
agricultural products upon importation’ and that it was ‘enacted to encourage local industries’. The 
report also notes in paragraph 3.37 that the Special Commodities Levy applies to items such as 
‘milk powder, dhal, sugar,  potatoes, and onions’.  
 
Question 7:  
Given Sri Lanka’s new agricultural policy aims to make the country self -sufficient in certain 
agricultural products and that the Special Commodity Levies are imposed on the imports of the 
same products to encourage loc al industries, what measures has Sri Lanka taken to ensure that 
the two instruments do not restrict importation of these products?  
 
Answer  
Objectives of the two measures are not to restrict imports, but to ensure food security, price 
stability of essential  food items and sustainable livelihood as a net -food importing developing 
country.  
 
4.1.2 Fisheries  
WT/TPR/S/347, section 4.1.2.2, page 83, paragraph 4.40  
It is noted in section 4.1, paragraph 4.40 of the Secretariat’s report that Sri Lanka intends to 
provide financial assistance in the event of the introduction of new technologies in large -scale 
fisheries for the high seas.  
 
Question 8:  
a) Can Sri Lanka identify the fisheries affected by support programmes:  
 by geographical area (e.g. territorial sea, EEZ, hi gh seas), and;  
 the species affected by the programmes (e.g. both target and by -catch species).  
 
Answer  
Sri Lanka currently concentrates to prevent, deter and eliminate illegal, unreported and 
unregulated fishing (IUU fishing) and comply with number of Reso lutions that has been introduced 
by regional fisheries management organizations  to combat against IUU fishing.  Newly introduced 
Vessel Monitoring System for fishing boats operating in high seas under the support programme 
helps to monitor and control IUU f ishing activities.  Mitigation of illegal fishing activities in territorial 
sea, EEZ and high seas benefits fish resources and sustainability.  Further support programmes 
are supposed to implement mainly focusing on management aspects particularly, to minim ize the 
impact of existing fishing within territorial, EEZ and high seas.  Therefore positive results in 
respect of fisheries management will be increased without affecting area or species.  
 
b) Can Sri Lanka confirm the primary objectives of its support progr ammes, and the extent to 
which the programmes are delivering on those objectives?  
Answer  
Fishing industry of Sri Lanka is a vital sector for the nation in concern of socio -economic aspects 
such as nutrition, food security, employments, foreign exchange ear nings and government 
revenue.  Further it provides livelihood mainly for the coastal fishing community.  Increase of per 
capita fish consumption to eradicate mal -nutrition in the country is given high priority as 70% 
owned to fish out of animal protein is contained in Sri Lanka diet according to the local cultural 
pattern.  Therefore Sri Lanka has the responsibility to secure the industry and also needs to ensure 
the sustainable fishing industry in the country.  In addition Sri Lanka needs to replace existi ng 
small scale deep sea and high sea fleet due to lack of compatible order to comply international 
obligations in term of fisheries management.  Further through the proposed support programme, it 
is mainly expected replacement of existing gill net fishery with management friendly line fishery 
including new technology resulting reduction of by catch and minimizing post -harvest losses.  As a 
result monitoring will be facilitated and enhanced.  
 WT/TPR/M/347/Add.1  
 
- 29 - 
 
  c) UN SDG Target 14.6 calls on governments by 2020 to prohibit certai n forms of fisheries 
subsidies which contribute to over -capacity and overfishing, and eliminate subsidies that 
contribute to IUU fishing, and refrain from introducing new such subsidies. What initiatives 
does Sri Lanka have in place to implement that targe t, including the standstill 
commitment?  
Answer  
Sri Lanka does not implement subsidies which contribute to over -capacity and overfishing,  and 
contribute to IUU fishing.  
 
Following are some of action taken by Sri Lanka towards achieving UN SDG Target 14.6.  
 
i. Establishment and enforcement of new regulations to prevent IUU fishing activities  
ii. Limitation of introduction of new fishing boats in high seas  
iii. Limitation of new fishing boats in coastal area  
 
d) In the event of the introduction of new technolog ies in large -scale fisheries for the high 
seas, can Sri Lanka provide details on the measures it will take to ensure that the financial 
assistance provided for these technologies does not result in over -fishing?  
Answer  
The proposed support programme, it i s mainly expected replacement of existing gill net fishery 
with management friendly line fishery including new technology resulting reduction of by catch and 
minimizing post -harvest losses.  As a result monitoring will be facilitated and enhanced.  
 
Followi ng are some of other positive measures taken.  
1. Preventing over fishing through reduction of by catch and discard  
2. Enhance monitoring, controlling  
3. Enhance reporting  
4. Improve level of compliance.  
 
4.2.2 Energy  
WT/TPR/S/347, section 4.2.2.2, page 8 8, paragraph 4.6  
Box 4.1  ‘Energy sector targets in the Energy Empowered Nation development plan’ states that the 
Sri Lankan Governments aims to ‘increase the share of electricity generation from renewable 
energy sources from 50% in 2014 to 60% by 2020 and finally to meet the total demand from 
renewable and other indigenous energy resources by 2030’ and ‘reduce petroleum fuel use in the 
transport subsector by 5% by introducing alternative strategies such as efficient modes of 
transport and electrification of  transport by 2020’.  
 
Question 9  
New Zealand welcomes the Sri Lankan Government’s “Energy Empowered Nation development 
plan” and notes the goals to meet total demand from renewable and other indigenous energy 
resources by 2030, and to reduce petroleum fuel  use in the transport subsector. In keeping with 
these objectives, has Sri Lanka considered endorsing the ‘Friends of Fossil Fuel Subsidy Reform’ 
Communiqué to support actions to reform inefficient fossil fuel subsidies given the trade, energy 
and climate benefits of reform? Removal of fossil fuel subsidies levels the playing field for 
investment in and uptake of renewable energy and associated technologies.  
 
Answer  
Sri Lanka will take positive note of this suggestion.  
 
Section 4.4.4 Transport services  
Paragraph 4.151  of the report states that Sri Lanka has ‘continued to invest heavily in recent 
years in both ports and roads so as to be a world -class hub for merchandise and to develop and 
repair its road infrastructure’.  
 
Question 10  
What experience, if any , does Sri Lanka have in using PPPs for transport infrastructure projects?  
 WT/TPR/M/347/Add.1  
 
- 30 - 
 
  Answer  
Under the proposed Megapolis Development Plan, the PPA on Transport Infrastructure is 
considered.  WT/TPR/M/347/Add.1  
 
- 31 - 
 
  SINGAPORE  
 
PART I:  QUESTIONS REGARDING THE SECRETARIAT REPORT  
II TRADE P OLICY REGIME: FRAMEWORK AND OBJECTIVES  
QUESTIONS:  
TRADE POLICIES BY SECTOR  
Page 99 (Para 4.104): Tourism  
 
Question -1 
The report notes that as part of Sri Lanka’s Tourism Development Strategy, Sri Lanka hopes to 
increase accommodation capacity, improve the regulatory framework, simplify the tax system, find 
transport solutions, and improve service standards in the tourism sector. How will Sri Lanka 
transform its regulatory framework towards these goals?  
 
Answer  
 
Goals  Regulatory Framework  
Increase accommod ation capacity  Investment on Resort Development projects in 
selected areas such as Kalpitiya Island Resort 
project, Yala wild resort project, Kuchchaweli 
Beach Resort Project, Dedduwa Lake Resort 
Projects etc.  
Improve the regulatory framework  The current  tourism strategy for Sri Lanka was 
developed for the years 2011 to 2016. The new 
vision document sets a new course for Sri Lanka 
to adopt a tourism strategy where the guiding 
philosophy, visitor demand and supply – side 
experiences are aligned.  
Simplify  the tax system  Every institution licensed under the Tourist 
Development Act, No. 14 of 1968 is eligible to 
pay a levy of one percent per monthly turnover.  
Find transport solutions  Commencement of City tour bus services for the 
selected locations based on  most tourist 
attractions. Already started in Pinnawala and 
Sigiriya.  
Improve service standards in the tourism 
sector  Standardization of Services: An industry 
requirement to ensure that all Sri Lankan 
registered hotels in the country are classified 
becam e mandatory from May 20 this year. 
Issuing an Extraordinary Gazette No. 1963/28 
on April 20 the government has stated that a 
tourist hotel upon registration should obtain 
classification from the Director General of the Sri 
Lanka Tourism Development Authori ty (SLTDA).  
The star class hotels will be reclassified every 
three years in this manner and during this time 
the said establishment would be allowed to use 
the approved symbol for that particular 
classification along with the name of the hotel.    
 
Page 101 (Para 4.112): Tourism  
 
Question -2 
According to the Secretariat Report, Sri Lanka has established a "One Stop Unit" (OSU) to attract 
investment in tourism. The Unit is a specialized unit set up under the Sri Lanka Tourism 
Development Authority which has  specialized staff from various government agencies that 
coordinate activities such as approvals, submitting applications, obtaining licences, and identifying WT/TPR/M/347/Add.1  
 
- 32 - 
 
  projects. The OSU provides fast -track government approvals, liaises with the Board of Investment 
of Sri Lanka (BOI) on incentive schemes, recommends visas, and coordinates building plan 
approvals. Does Sri Lanka have plans to establish similar one stop units in other sectors as well?  
 
Answer  
In addition the One Stop unit for investment in tourism, th e Board of Investment of Sri Lanka has 
set up a One Stop Shop catered to facilitating investments for all other sectors.  WT/TPR/M/347/Add.1  
 
- 33 - 
 
  REPUBLIC OF KOREA  
 
PART I: Questions Regarding the Secretariat Report  
1.1 Fiscal Policy  
Page 131(Para 1.7)  
 
During the period under re view, the fiscal deficit increased from 6.5% of GDP in 2011 to 7.5% in 
2015, well above the targeted 4.4%. The fiscal deficit for 2016 is targeted to be 5.4% of GDP. 
Although growing in absolute terms, revenue collection as a proportion of GDP declined to around 
13.0% in 2015. The decline came about despite the one -off revenue measures that the 
Government implemented such as the "super gains tax", which was a retroactive tax on individuals 
and companies that earned in excess of Rs 2 billion in profits in 20 14. The authorities recognize 
that the continued weak revenue increase has been the key challenge of fiscal consolidation. 
Recent efforts to broaden the tax base, improve tax administration and to rationalize tax 
exemptions have not produced the desired re sults. Steps continue to be taken to enhance tax 
compliance, and to improve tax audit and risk management. Initiatives are also being taken to 
increase the efficiency of the Customs and Excise Departments by curtailing undervaluation, 
improving audits and streamlining licensing procedures.  
 
Question 1  
Korea is concerned about the chronic fiscal deficits experienced by Sri Lanka, as it is closely 
related to its trade policy and performance in general. In this regards, we would like to repeat the 
same questio n on Sri Lanka’s fiscal policy, which was raised by Korea in 2010. How does Sri Lanka 
evaluate the possibility that the current fiscal situation has a negative impact on trade 
liberalization? What is Sri Lanka’s fiscal consolidation plan in the future?  
 
Answer  
Fiscal position of Sri Lanka is being constrained by a sluggish performance of government revenue 
and rigidity of recurrent expenditure during the review. Accordingly, the fiscal position during the 
review period has been reported as follows.  
 
 2011  2012  2013  2014  2015  
Govt Revenue  13.4 12.0 11.9 11.4 13.0 
Budget Deficit  -6.2 -5.6 -5.4 -5.7 -7.4 
 
Accordingly, the Government has committed to improve its fiscal position in the medium term by 
increasing the revenue collection, reducing the budget defi cit and rationalizing the public 
expenditure, rationalization of Public Debt related to SOEs by converting them into the joint 
venture equity or equity and restructuring SOEs in responsive to the market driven business 
environment.  
 
In the government reve nue front, the government has adopted a number of initiatives to improve 
revenue which include the followings:  
a) Increasing the direct tax to indirect tax ratio from 20:80 to 40:60 in the medium terms by 
expansion of tax base,  
b) Rationalization of tax exempt ions, and concessions,  
c) Automation of treasury management as well as revenue management system  
d) Redrafting the revenue related legislation to eliminate leakages and tax evasion.  
e) Facilitating expansion of domestic economic transactions through the FTAs and BITs with 
major trading partners to expand the tax base.   
 
2.4 Investment Regime  
Page 32 (Para 2.44)  
In 2014, Sri Lanka passed the Land (Restrictions on Alienation) Act that imposed new restrictions 
on the sale, transfer, or lease of land, properties, or condominium units. The law prohibits the 
transfer of land to a foreigner, foreign company, or a local company with more than 50% foreign 
ownership. Certain exceptions applied to any land transferred to a company with more than 50% 
foreign ownership from 1 January 2013 to 29 October 2014 if the company had been in active 
operation in Sri Lanka for a period of not less than 10 consecutive years; and also for diplomatic 
missions, condominium parcels on or above the fourth floor, transfer/disposition to a next of kin 
foreigner, and duel citizens. The law also introduced a new land lease tax of 15% applied to WT/TPR/M/347/Add.1  
 
- 34 - 
 
  foreigners leasing land, but it only remained in place for about two years, as it was later removed 
in the 2016 Budget.  
 
Question 2  
Korea is worried that th e Land (Restrictions on Alienation) Act may discourage foreign investors 
from entering the Sri Lankan market. Would the Sri Lankan Government contemplate any policy 
measures to attract more foreign investors despite the Act, including a possible ease of re strictions 
imposed by the Act?  
 
Answer  
With regard to leasing of land to foreigners, a Bill has been drafted which is to be presented to the 
Parliament shortly. The proposed Bill will give legislative standing to the policy decision to cease 
the collection  of land lease tax payable by foreigners for an indenture of lease entered into from 
1st January 2016. In relation to outright transfers of land to foreigners, a company with less than 
50% foreign shareholding is not prohibited from purchasing land outrigh t. Furthermore, the Land 
(Restriction on Alienation) Act, No. 38 of 2014 makes provision for certain exemptions to the 
general prohibition on transfers of title of land to foreigners. These exemptions are contained in 
Section 3 of the Act under references.   
 
Sri Lanka similar to other countries retain some restrictions on outright purchase of land by 
foreigners.  WT/TPR/M/347/Add.1  
 
- 35 - 
 
  TURKEY  
 
THE SECRETARIAT REPORT  
Summary, pg. 9, para. 5  
 
It is stated in the Secretariat Report that “Despite efforts to encourage investment, ther e have 
been no changes in the long -standing investment restrictions, some of them applied in many 
strategic sectors, and more restrictions have been put in place such as prohibiting the sale of land 
to foreigners.”  
 
Could Sri Lanka provide more information  about its approach to the elimination of 
current restrictions?  
 
Answer:  
Current Exchange Control restrictions have been relaxed by Gazette No.1970/49 dated 10th  June 
2016 wherein the prohibited sectors for foreign investment has been reduced from 5 to 3 sectors 
(pawn broking, retail trade with a capital of less than USD One Million and coastal fishing). Apart 
from these 3 sectors, foreign investments are permitted subject to line agency approval.  
 
With regard to land, outright transfers are permitted to companies where the foreign shareholding 
is less than 50%. If foreign shareholding is greater than 50%, such companies have the option of 
entering into long -term leases for a period up to 99 years. For such indentures of leases, entered 
into after 1st January 2016, the requirement of upfront payment of land lease tax of 15% of the  
value of lease for entire period has also been lifted and therefore not payable.  
 
Summary, pg. 9, para. 9  
It is stated in the Secretariat Report that “Sri Lanka has in place a lar ge number of additional 
levies and charges that are applied in addition to the tariff on a wide variety of products; these 
include the Export Development Board Levy (Cess), Excise Duty, Value Added Tax (VAT), Ports 
and Airports Development Levy, Nation Bui lding Tax, port handling charges and the Special 
Commodity Levy. The Excise Duty, VAT, and Nation Building Tax apply to both imported and 
domestic goods while the others are charged on imported goods. The charges can be high and 
significantly increase the cost of importing, in some cases exceeding 100% of the c.i.f. value. 
Furthermore, many have been modified several times during the review period, thus adding 
unpredictability for importers.”  
 
Could Sri Lanka elaborate on the difference between taxes impose d on domestic and 
imported goods, and clarify if the taxes imposed only on imported goods comply with 
the national treatment principle of GATT/ WTO?  
 
Answer  
The objectives of levies and taxes are to apply them on non -discriminatory basis. Sri Lanka's 
excise duty, value added tax, and nation building tax are applied equally to both imported and 
domestic goods and do not give rise to any concerns under Sri Lanka's national treatment 
obligations.  
 
With respect to three other measures, the Export Development Bo ard Levy ("CESS"), the Special 
Commodity Levy, and the Ports and Airport Development Levy, these measures are applied at the 
border.  Sri Lanka is reviewing these measures and it is expected that the CESS and the Ports and 
Airport Development Levy will be phased out. Towards this objective, the Government through its 
budget of 2017 proposes phasing out of CESS.  
 
The Special Commodity Levy operates as Sri Lanka's customs tariff for a number (39) of 
agricultural products. This Levy applies on an MFN basis to imports of these products from all 
sources. The Special Commodity Levy is a single duty, applied only on 39 essential commodities in 
place of Customs Import Duty. On application of Special Commodity Levy, no any other duties and 
internal taxes shall be app licable on those tariff lines. Purpose of the Special Commodity Levy is to 
facilitate the inflow of selected essential commodities taking into account domestic economic 
sensitivities.  
 WT/TPR/M/347/Add.1  
 
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  2.4 Investment Regime, pg, 32, para. 2.42 -44 
It is stated in the Secre tariat Report that “…Furthermore, there have been no major multinational 
enterprises setting up operations in Sri Lanka in manufacturing during the past decade. Some 
recent government policies, such as restricting land purchases by foreigners and utilizati on of the 
Underutilized Assets Act, adopted by Parliament in November 2011, to expropriate companies and 
assets, may have actually deterred potential foreign investment. … 2.44. In 2014, Sri Lanka 
passed the Land (Restrictions on Alienation) Act that impos ed new restrictions on the sale, 
transfer, or lease of land, properties, or condominium units. The law prohibits the transfer of land 
to a foreigner, foreign company, or a local company with more than 50% foreign ownership.”  
 
Could Sri Lanka provide more detailed information about its expropriation policy of 
companies and assets?  
 
Answer  
The acquisition of property was carried out under the Revival of Underperforming Enterprises or 
Underutilized Assets Act, No. 43 of 2011 which was a scheme adopted previo usly. The government 
currently recognizes the adverse and detrimental effect of such policies on attracting and 
maintaining foreign investments in Sri Lanka and therefore, is in the process of repealing such Act. 
Accordingly, steps are being taken in this regard by the Ministry of Public Enterprise Development. 
It can be assured, however, that any expropriation of foreign investments will be carried out on a 
non-discriminatory basis, for a public purpose and against the payment of compensation.  
 
Could Sri L anka comment on how government’s current investment policy regarding 
land allocation to foreigners affects the inward FDI flow to the country, considering that 
one of the priorities of the Sri Lankan government is to promote FDI inflow?  
 
Answer  
With regard  to land, outright transfers are permitted to companies where the foreign shareholding 
is less than 50%. If foreign shareholding is greater than 50%, such companies have the option of 
entering into long -term leases for a period up to 99 years. For the purp ose of reducing the up -
front costs of setting up business in Sri Lanka, indentures of leases entered after 1st January 2016 
are no longer required to make the up -front payment of land lease tax of 15% of the value of the 
lease for the entire period. In add ition, Sri Lanka also intends on further relaxation of this policy in 
order to promote FDI inflow . 
 
2.4.1 Legal Framework, pg. 32, para. 2.44  
It is stated in the Secretariat Report that “In 2014, Sri Lanka passed the Land (Restrictions on 
Alienation) Act t hat imposed new restrictions on the sale, transfer, or lease of land, properties, or 
condominium units. The law prohibits the transfer of land to a foreigner, foreign company, or a 
local company with more than 50% foreign ownership. Certain exceptions appl ied to any land 
transferred to a company with more than 50% foreign ownership from 1 January 2013 to 29 
October 2014 if the company had been in active operation in Sri Lanka for a period of not less than 
10 consecutive years; and also for diplomatic missio ns, condominium parcels on or above the 
fourth floor, transfer/disposition to a next of kin foreigner, and duel citizens. The law also 
introduced a new land lease tax of 15% applied to foreigners leasing land, but it only remained in 
place for about two ye ars, as it was later removed in the 2016 Budget.”  
 
Given the prevailing restrictions on the acquisition of real property for foreign investors 
in Sri Lanka, could Sri Lanka provide information on the legal procedure to acquire a real 
property for investmen t purposes?  
 
Answer  
The proposed Bill to be presented to the Parliament shortly  will give legislative standing to the 
policy decision to cease the collection of land lease tax payable by foreigners for an indenture of 
lease entered into from 1st January 20 16. With regard to outright transfers of land to foreigners, a 
company with less than 50% foreign shareholding is not prohibited from purchasing land outright. 
Furthermore, the Land (Restriction on Alienation) Act, No. 38 of 2014 makes provision for certai n 
exemptions to the general prohibition on transfers of title of land to foreigners. These exemptions 
are contained in Section 3 of the Act under reference.  
 WT/TPR/M/347/Add.1  
 
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  2.4.3 Investment Restrictions, pg. 33, para. 2.50  
It is stated in the Secretariat Report that “S ri Lanka continues to restrict investments in certain 
sectors or otherwise impose limitations such as advance permissions or additional capital on 
certain investments; these remain unchanged since the previous review. Many of the restrictions 
are in strate gic sectors such as tea, coconuts, communications, and fishing; and there are no plans 
at present to liberalize these. Furthermore, there are restrictions on the sale of land to foreigners”  
 
Could Sri Lanka explain whether it is planning to diminish the nu mber of restricted 
sectors or limitations imposed on foreign investors?  
 
Answer  
With regard to the restrictions on strategic sectors mentioned in the question, as Sri Lanka is 
primarily an agricultural economy, such sectors are restricted due to limited la nd availability, food 
security, water requirement and livelihood dependency. Therefore, Sri Lanka encourages investors 
to enter into joint ventures in relation to such sectors.  
 
In relation to restricting foreign land ownership, a Bill has been drafted whi ch is to be presented to 
the Parliament shortly. The proposed Bill will give legislative standing to the policy decision to 
cease the collection of land lease tax payable by foreigners for an indenture of lease entered into 
from 1st January 2016. With rega rd to outright transfers of land to foreigners, a company with less 
than 50% foreign shareholding is not prohibited from purchasing land outright. Furthermore, the 
Land (Restriction on Alienation) Act, No. 38 of 2014 makes provision for certain exemptions to the 
general prohibition on transfers of title of land to foreigners. These exemptions are contained in 
Section 3 of the Act under reference.   
 
2.1 General Framework and Policy, pg. 22 -23, para. 2.5  
It is stated in the Secretariat Report that “Trade, inv estment, and related policies are developed 
under the aegis of the Ministry of National Policies and Economic Affairs with the necessary inputs 
furnished by the various other government bodies including the Department of Commerce of the 
Ministry of Industr y and Commerce, the Department of National Planning of the Ministry of 
National Policies and Economic Affairs, and the Trade and Investment Policy Department of the 
Ministry of Finance. They work under broad mandates for trade, tariff, and investment polic ies, 
including pursuing preferential trade negotiations; implementing revised tariffs under reciprocal 
trade agreements; and reviewing import tariff policies and border measures.”  
 
Today’s world is witnessing a transformation in manufacturing processes and  the 
creation of new business models due to breakthrough technological innovations. As a 
country that acknowledged the importance of innovation in development and set it at 
the core of a national strategy, could Sri -Lanka elaborate on the specifics of the National 
Strategy on Innovation -driven Development Plans with respect to enabling the 
successful integration into the above mentioned transformation processes?  
 
Answer  
The focus of the Government is to rebalance its economic growth model, being more open, private 
sector -led, knowledge -intensive, and one that successfully develops and sells higher value goods 
and services in global and domestic markets.  
 
The transformation of Sri Lanka to upper -middle income status essentially requires a transition 
from an e conomy largely driven by commodity products and relatively inexpensive inputs to 
production (eg: labour) to a knowledge -intensive economy focused on developing and 
commercializing high value products and services. This transformation needs to be driven by a 
growth oriented agenda that leverages (i) Export oriented SMEs with strong growth potential, (ii) 
Growth oriented start -up companies and (iii) Industry -facing research and development 
capabilities.  
 
Therefore, the Ministry of Development Strategies and I nternational Trade has undertaken a rapid 
assessment of the Innovation and Entrepreneurship landscape in collaboration with the relevant 
stakeholders and development partners to enhance Sri Lanka's competitiveness. It is expected to 
formulate a National In novation Policy through this initiative.  
 WT/TPR/M/347/Add.1  
 
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  Could Sri -Lanka also provide a brief evaluation on the foreseeable impacts of this 
Strategy on the development of Single Window Strategies to improve cross -border 
electronic commerce in the future?  
 
Answer  
It is expected that above initiatives will lead to improve in cross -border electronic commerce in 
future and improving competitiveness through reduction in trade transaction cost.  
 
3.1.5.4 Trade Policies and Practices by Measure – Measures Directly Affecting Imp orts – 
Other Charges Affecting Imports – Export Development Board Levy (Cess), pg. 49, para. 
3.30 
 
3.1.5.7 Trade Policies and Practices by Measure – Measures Directly Affecting Imports – 
Other Charges Affecting Imports – Ports and Airports Development Levy  (PAL), pgs. 49 -
50, para. 3.33  
 
It is stated in the Secretariat Report that, “Since 2004, the Sri Lankan Government has been 
charging a cess on a range of imports, including fruits, vegetables, processed and unprocessed 
food, shoes, bags, rubber and plasti c products, textile products, consumer items such as toiletries 
and perfumes, ceramic ware, glassware and pens. The Cess is applied to over 3,500 tariff lines at 
the HS eight -digit level. The Cess is applied on the c.i.f. value and ranges from 1% to 35%. T he 
authorities state that the Cess is imposed for revenue generation reasons. In 2015, the Cess 
accounted for over 3.4% of total tax revenue in Sri Lanka.”  
 
“As per the Ports and Airports Development Levy Act No. 18 of 2011, imports were previously 
subject  to a levy of 5% of the c.i.f. value of the imports; while inputs used solely for processing 
and re -export purposes were charged 0.5%. Since January 2016, the rate of PAL has been 
increased to 7.5%.”  
 
At the outset, an ad valorem duty with no fixed maximum  fee, by its very nature, is not ‘limited in 
amount to the approximate cost of services rendered’. For example, high -price items necessarily 
will bear a much greater tax burden than low -price goods, yet the service accorded to both is 
essentially the same.  Given the fact that cess duties are unconformable with Articles VIII.1 (a) and 
III.4 of the GATT,  
 
Could Sri Lanka express its perspective regarding the abolishment of this levy or 
providing its conformity to the GATT?  
 
Answer  
The objectives of levies an d taxes are to apply them on non -discriminatory basis.  
With regard to other measures namely; the Export Development Board Levy ("CESS") and the 
Ports and Airport Development Levy, these measures are applied at the border. Sri Lanka is 
reviewing these meas ures and it is expected that the CESS and the Ports and Airport Development 
Levy will be phased out. Towards this objective, the Government through its budget of 2017  
proposes phasing out of CESS.  
 
3.2.4 Trade Policies and Practices by Measure – Measures D irectly Affecting Exports –
Export Incentives, pg. 57, para. 3.79  
It is stated in the Secretariat Report that, “Sri Lanka graduated from Annex VIIb of the SCM 
Agreement on 31 December 2015. As such, no new export incentives will be provided to investors. 
According to the authorities, a new incentive scheme, which is expected to be neutral and 
horizontal in application, is being formulated. Under the scheme, the authorities plan to apply a 
reduced rate of 17.5% to all target sectors. The new legislation is ye t to be passed.”  
 
It can be deduced that Government of Sri Lanka seeks to introduce non -specific pattern to its 
export incentives by formulating a scheme which is neutral and horizontal in application. However, 
according to Article 2.3 of the Agreement on Subsidies and Countervailing Measures, any 
prohibited subsidies; e.g. subsidies contingent upon export performance, shall be deemed to be 
specific. Therefore, it seems that Sri Lanka should actually eliminate the export performance 
criterion while designin g the new incentive scheme.  
 
 WT/TPR/M/347/Add.1  
 
- 39 - 
 
  Could Sri Lanka provide its views on this issue?  
 
Answer  
Sri Lanka fell within Article 27.2 (a) of the WTO Agreement on Subsidies and Countervailing 
Measure, being a developing country member referred to in Annex VII (b). Acc ordingly, the 
prohibition on export subsidies under Article 3(1)(a) was not applicable to Sri Lanka. However, 
having reached a GNP per capita of 1000 USD in constant 1990 dollars for 3 consecutive years, Sri 
Lanka graduated fom Annex VII (b) and due to res ervation of rights under Article 27.4 extension 
procedure, Sri Lanka has had the legal cover to provide export subsidies until the end of 2015.  
Accordingly, from 2016, Sri Lanka suspended the incentive scheme that insisted upon export 
requirements. A new incentive policy is being developed which will be neutral and horizontal in 
application which is also competitive with incentives provided by other countries, whilst being WTO 
compliant.  
 
Table A2.2 Investment Protection Agreements, pg. 125  
According to th is table, Sri Lanka has 24 bilateral investment treaties (BIT) with other countries or 
groups of countries in force. The date of entry into force of these Agreements indicate that there is 
no newly signed BITs.  
 
Could Sri Lanka explain its approach about signing new BITs?  
 
Answer  
Sri Lanka has revised our Model BIT to ensure policy flexibility for the government. Sri Lanka is in 
the process of negotiating BITs and negotiating investment chapters in comprehensive FTA’s with 
a few other countries.  
 
THE GOVE RNMENT REPORT  
6. Investments, pg. 10, para. 6.1  
 
It is stated in the Government Report that “The Board of Investment of Sri Lanka (BOISL) Act of 
1978 continues to provide the necessary legal framework for the promotion of investment in Sri 
Lanka. During th e review period of 2010 to 2015, the total inflow of FDI into Sri Lanka was US$6.9 
billion compared to US$3.1 billion for the earlier review period of 2005 -2009.”  
 
Could Sri Lanka give more detail on the suspension of certain infrastructure projects 
such a s “Colombo Port City Project” and “Colombo Lotus Tower Project”, and the 
reasoning behind the suspension decisions in line with the legal framework of the 
investments in Sri Lanka?  
 
Answer  
Colombo Port City project was suspended for a period of one year du ring which the government 
conducted the Supplementary Environmental Impact Assessment (SEIA) which was done to 
understand and fully assess the project’s impacts and mitigation measures in developing a 
comprehensive plan to maximize the benefits to the coun try. The project work has been resumed 
in September 2016.  
 
The Colombo Lotus Tower Project has also resumed after the resolution of a land issue between 
the Sri Lanka Ports Authority and the Urban Development Authority.  
 
Sri Lanka would like to reiterate that no compromise is intended to be made in relation to 
environmental requirements to which all investments must accordingly adhere.  
 
4. Trade Policy Measures, pg. 8, para. 4.7  
It is stated in the Government Report that “Sri Lanka grants preferential tari ffs under its bilateral 
and regional agreements on reciprocal basis. There are no major changes to this area from the 
previous review report except for commencement of negotiations in 2016 on comprehensive free 
trade agreements with India, China and Singap ore. The market access gained under prevailing 
FTAs/RTAs is significant, although Sri Lanka is yet to reap the full potential. South Asian 
Preferential Trade Agreement (SAPTA), South Asia Free Trade Area (SAFTA), Asia Pacific Trade 
Agreement (APTA), India – Sri Lanka Free Trade Agreement (ISFTA), Pakistan Sri Lanka Free 
Trade Agreement (PSFTA) and the Global System of Tariff Preferences (GSTP) are currently active. 
Sri Lanka has also submitted its application to receive preferential treatment from the EU un der WT/TPR/M/347/Add.1  
 
- 40 - 
 
  the Special Incentive Arrangement for Sustainable Development and Good Governance of the EU 
Generalized Scheme of Preferences.”  
 
Could Sri Lanka give more information on the negotiations of “India –Sri Lanka 
Comprehensive Economic Partnership Agreement (CEPA)”, about which Sri Lankan 
government has expressed reservations, especially regarding the inclusion of trade in 
services in the Agreement and clarify if the aforementioned Agreement is intended to 
substitute the envisaged “India –Sri Lanka Comprehensi ve Economic Partnership 
Agreement (CEPA)”?  
 
Draft Answer  
The proposed Economic Technology Cooperation Agreement (ETCA) is being negotiated. The ETCA 
agreement is in comprehensive in nature and would include trade in goods, services, investment, 
economic an d technology cooperation and other areas of interests to both parties.  WT/TPR/M/347/Add.1  
 
- 41 - 
 
  UNITED STATES  
 
Questions Based on the Government Report, WT/TPR/G/347  
Page 6, Paragraph 3.6:  Sri Lanka states “[i]t is therefore expected that necessary flexibilities be 
provided for s mall economies such as Sri Lanka during the process of agricultural negotiations.” 
What is meant by necessary flexibilities?  
 
Answer  
Flexibilities have been widely recognized for small and vulnerable economies during the DDA 
process, in particular when pro posals under Revision 4 on agriculture were negotiated. Further, 
Ministerial Declaration of MC -10 made in Nairobi (Para 26) emphasized on such flexibilities for 
SVEs with the aim of facilitating their fuller integration into multilateral trading system by taking 
into account the needs of SVEs in all areas of negotiations. Sri Lanka seeks such flexibilities during 
the process of agriculture negotiations.  
 
Page 8, Paragraph 4.12:  Sri Lanka states “Sri Lanka has been gradually implementing its trade 
policy, m oving the economy away from protectionism towards greater trade openness and global 
economic integration.” Which trade policy implementations reflect this shift away from 
protectionism in the agricultural sector?  
 
Answer  
Sri Lanka introduces its trade libe ralization moving away from import substitution policies since 
1977. Sri Lanka made its agricultural bound commitments at an average rate of 50%, which is 
much lower than in many countries in 1995. Further, the average applied rate maintained is 50% 
less t han Sri Lanka’s bound commitments on agricultural products. (Average agriculture applied 
rate is 25.3%). It has further declined during the review period. Sri Lanka also does not maintain 
export subsidies on agriculture.  
 
Page 9, Paragraph 5.1(e):  The rep ort notes that “a copyright division will be setup in the NIPO 
which will also be responsible for monitoring the Collective Management Societies.”  Please provide 
additional information regarding this process, including:  
 
a. What role will NIPO play in monito ring the Collective Management Societies?  
 
Answer  
Copyright division will be set up NIPO in order to register establish a voluntary registry system for 
Copyright it will be a ‘prima – facia’ evidence for the Copyright holders.  
 
A draft amendment has alread y been prepared to implement the voluntary registration system. In 
respect of Collective Management Societies NIPO will form a Collective Management Society for a 
specified period for musicians which will be a separate body from other Collective Management  
Societies for all other musicians and singers with the members of the Collective Management 
Societies.  
 
It is expected to regularized collection of royalty and distribution of royalty under the supervision 
of NIPO officials and members who will be represe nting other CMOs as well. A draft regulation will 
be proposed in order to form/ establish the CMOs in a lawful manner (The proposal to form this 
CMO is still under discussion and hope to finalize by end of 2016).  
 
b. Will stakeholders have a role in NIPO’s ov ersight activities?  
Answer  
Yes, the musicians and singers will be working in the CMO.  
 
Page 9, paragraph 5.3:  Sri Lanka indicates it has convened a Steering Committee on Intellectual 
Property Development in 2015 with the objectives of, among others, accedi ng to WIPO 
administered Treaties/Protocols/Agreements.  Which, if any, patent -related Treaties/Protocols/  
Agreements does Sri Lanka plan to join?  WT/TPR/M/347/Add.1  
 
- 42 - 
 
  Answer  
No plans get to exceed to Patent related treaties. However Sri Lanka is currently preparing. The 
NIPO i s currently taking measures as an objective to accede to Madrid agreement by end of 2017 
or early 2018. Therefore any other new developments in respect of accession for treaties will take 
place after 2018.  
 
Questions Based on the Secretariat Report, WT/TPR /S/347  
Page 8, paragraph 5:  The Secretariat reports that “more restrictions have been put in place such 
as prohibiting the sale of land to foreigners.” Why is Sri Lanka placing more restrictions on foreign 
investment when it is trying to facilitate greater  foreign investment? What plans does Sri Lanka 
have to remove these and other existing restrictions on foreign investment?  
 
Answer  
There are several other countries which have restrictions on outright purchasing of land by 
foreigners. With regard to leasin g of land to foreigners, a Bill has been drafted which is to be 
presented to the Parliament shortly. The proposed Bill will give legislative standing to the policy 
decision to cease the collection of land lease tax payable by foreigners for an indenture of  lease 
entered into from 1st January 2016. In relation to outright transfers of land to foreigners, a 
company with less than 50% foreign shareholding is not prohibited from purchasing land outright. 
Furthermore, the Land (Restriction on Alienation) Act, No . 38 of 2014 makes provision for certain 
exemptions to the general prohibition on transfers of title of land to foreigners. These exemptions 
are contained in Section 3 of the Act under reference.  
 
Page 11, paragraph 19:  The Secretariat reports that Sri Lan ka is “establishing a "One Stop Unit" 
for investment in tourism.”  Does Sri Lanka have plans to expand this one stop unit to other 
sectors and if so what is the timeline for such an expansion?  
 
Answer  
In addition the One Stop unit for investment in tourism , the Board of Investment of Sri Lanka has 
set up a One Stop Shop catered to facilitating investments for all other sectors.  
 
Page 24, Paragraph 2.11:  The Secretariat states “ . . . the 100 Day Programme[sic] has 
introduced, inter alia, guaranteed purchase  prices for various basic agricultural commodities.” Can 
Sri Lanka explain how it intends to determine the guaranteed purchase prices, which commodities 
qualify as “basic agricultural commodities”, and how Sri Lanka will implement this policy?  
 
Answer  
 
 The 100 Day Programme was a temporary measure to reduce cost of living and ensuring 
minimum income to farmers.  
 Guaranteed floor price was introduced on paddy, liquid milk and rubber only.  
 Implementation of guaranteed price for limited quantity of paddy was d one by the Paddy 
Marketing Board (PMB) and purchased paddy was released to the local market.  
 PMB role is to stabilize the open market price with the aim of enhancing the livelihood of the 
farmers. The PMB purchases approximately 7% of total production of p addy. The private 
sector therefore, plays a major role on paddy purchases and marketing. PMB is expected to 
compete with the private sector. The PMB therefore, does not receive or provide any subsidy 
on its operations. Funds requirements of the PMB are cha nneled from the State Banks as 
launched.  
 The liquid milk at guaranteed price is being purchased by the local major dairy industries 
including government sponsored enterprises to ensure minimum income of cattle breeders.  
 Guaranteed price for Rubber confine d to small holdings was implemented through the 
Department of Rubber Development which facilitated the private sector as well as rubber 
industrialist to by rubber from small holdings.  
 Guaranteed price for paddy and rubber were time bound as well as seasona l in nature while 
guaranteed price for liquid milk is continuing for the time being.  
 
Page 25, Box 2.1: The Secretariat lists as an activity “[p]rovide tax concessions for local 
entrepreneurs from 2016 to enhance their productivity levels and develop compe titiveness.” Can 
Sri Lanka explain which sectors will be imp acted by these tax concessions?  WT/TPR/M/347/Add.1  
 
- 43 - 
 
  Answer  
Implementation of this programme has been differed.  
 
Page 32, paragraph 2.42:  The Secretariat reports that “Some recent government policies, such 
as restric ting land purchases by foreigners and utilization of the Underutilized Assets Act, adopted 
by Parliament in November 2011, to expropriate companies and assets, may have actually 
deterred potential foreign investment.” Does Sri Lanka have any intention to r epeal the 
Underutilized Assets Act and remove its policy restricting land purchases by foreign investors?  
 
Answer  
The acquisition of property was carried out under the Revival of Underperforming Enterprises or 
Underutilized Assets Act, No. 43 of 2011 which  was a scheme adopted by the previous 
government. The current government recognizes the adverse and detrimental effect of such 
policies on attracting and maintaining foreign investments in Sri Lanka and therefore, is in the 
process of repealing such Act. A ccordingly, steps are being taken in this regard by the Ministry of 
Public Enterprise Development.  
 
Page 33, Table 2.2:  The Secretariat indicates that there is a 40 percent equity cap in “mass 
communications; education; freight forwarding; travel agencies;  and shipping agencies.”  What 
are the plans of Sri Lanka to liberalize these sectors to foreign investment and allow majority 
foreign shareholding? This would seem to help Sri Lanka’s efforts to increase investment, position 
itself as a travel and service s hub, bring high technology, and increase transportation and tourism 
investment.  
 
Answer  
Current Exchange Control restrictions have been relaxed by Gazette No.1970/49 dated 10th June 
2016 wherein the prohibited sectors for foreign investment has been red uced from 5 to 3 sectors 
(pawn broking, retail trade with a capital of less than USD One Million and coastal fishing).  
 
There are certain limitations imposed on foreign investments, contained in Exchange Control 
Regulation No. 1232/14 dated 19 -04-2002 as a mended by No. 1248/19 dated 08 -08-2002. These 
investments will be approved only up to 40% of the issued capital of such company or a higher 
percentage of foreign investment, with the approval of the Board of Investment of Sri Lanka. The 
areas are subject t o limitations on a few selected areas.  
 
Page 34, paragraph 2.51:  The Secretariat notes that “Sri Lanka has promoted certain sectors in 
which investment restrictions still remain, e.g. aviation, energy/mining, telecommunications, and 
retail trade.” We there fore ask why Sri Lanka hasn’t liberalized the existing investment restrictions 
in these areas to promote foreign investment.  
 
Answer  
At the moment, these are regulated areas under the Exchange Control Regulation No. 1232/14 
dated 19 -04-2002 as amended by G azette No.1970/49 dated 10th June 2016, which requires the 
approval from the relevant line Ministry.  
 
Accordingly,  for  Transport  Civil Aviation it needs to get the approval of the line Agency . Also the 
 Civil Aviation Act (No. 14 of 2010) specifies tha t companies with foreign share holding can only be 
registered in Sri Lanka for this service if such share holding is minority (i.e. 49% foreign -51% local 
and below).  
 
Energy/mining, telecommunications are regulated areas but 100% foreign investments are al lowed 
with the approval of the line agency.  
 
Retail trade with a capital above USD One Million is permitted.  
 
Page 41, paragraph 3.9:  The Secretariat’s report states that Sri Lanka has notified it has no 
regulations on pre -shipment inspections. However, Pr e-Shipment Inspection Certificates are 
required by Sri Lankan Customs for vehicle imports.  
 
When will Sri Lanka be notifying these measures to the WTO or removing the pre -shipment 
inspection requirements?  
 WT/TPR/M/347/Add.1  
 
- 44 - 
 
  Answer  
All used motor vehicles falling under H.S.C odes 87.02, 87.03,87.04 and 87.05 being imported to 
Sri Lanka shall be subjected to a pre -shipment inspection and shall have a certificate of export 
inspection issued by the relevant authorized inspectors appointed by the Secretary to the Ministry 
of Finan ce and Planning. Sri Lanka will be notifying this requirement to WTO shortly.  
 
Page 41, paragraph 3.11:  The Secretariat’s report states that Sri Lanka’s Customs 
(Amendment) Act No. 2 of 2003 allows for the application of minimum values with the approval of  
the Cabinet of Ministers and maintains minimum values for certain products.  
 
Can you advise how the application of minimum values is consistent with the WTO Agreement on 
Customs Valuation?  
 
Answer  
Since May 2016, Sri Lanka has adopted the transacted valu e as supported by the invoice of the 
manufacturer or invoice certified by the manufacturer within the meaning of Customs Valuation 
Agreement as incorporated by Amendment Act No. 2 of 2003.  
 
Page 41, paragraph 3.13:  The Secretariat’s report notes that Sri L anka has not notified its rules 
of origin.  
 
Will Sri Lanka notify its rules of origin in effect to the WTO?  
 
Answer  
Sri Lanka does not employ non -preferential rules of origin. A notification to this effect to WTO will 
be made.  
 
Page 43, paragraph 3.17:  The Secretariat Report states --“The applied MFN rate exceeded the 
bound rate for 132 lines in 2016, up from 103 lines in 2010 (Table A3.1). The products affected 
include, inter alia, tobacco products, alcoholic beverages, textiles, carpets, and switches.” T he 
report also states that corrective actions would be taken.  
 
When will Sri Lanka lower its applied import tariffs to meet its WTO bound tariffs commitment?  
 
Answer  
A total of 97 out of 132 tariff lines have exceeded the bound rates due the revision and r eduction 
of tariff bands from 5 band tariff system to 4 band tariff system and finally 3 band tariff system in 
November 2015.  
 
Required follow up has already been taken to adjust those 91 tariff lines in par with the Sri Lanka’s 
bound rates commitments to WTO, under the Revenue Protection Order with the budget 2017.  
 
A total of 35 tariff lines classified under the Chapter 22 and 24 mainly on tobacco and alcohol have 
been assigned with higher duty rates on MFN basis, taking into account health issues, Socia l and 
Religious issues.  
 
Would these corrective measures include rectifying all 132 lines for which the applied rates exceed 
bound rates, or just those lines added in November 2015?  
 
Answer  
As indicated above.  
 
Page 52, paragraph 3.47:  The Secretariat's R eport mentions proposed trade defence bills on 
anti-dumping, countervailing, and safeguard measures. Please provide an update as to the status 
of the bills.  
 
Answer  
The Draft Trade Defense Bill has been approved by the Cabinet and soon it will be presented  to the 
Parliament shortly.  
 
Page 60, paragraph 3.87: The Secretariat states that “The authorities pointed out that the 
SLECIC does not provide any form of export financing including loan or grants.” Please explain WT/TPR/M/347/Add.1  
 
- 45 - 
 
  what this means in light of the fact tha t this paragraph also states that “It [SLECIC] also issues 
guarantees to banks and other financial institutions to facilitate the granting of pre -shipment and 
post-shipment finance.” The WTO Ministerial Decision of 19 December 2015 defines “export 
financin g support” to include insurance and guarantees.  
 
Page 60, paragraph 3.87:  The Secretariat describes the Sri Lanka Export Credit Insurance 
Corporation (SLECIC) as an accredited export credit agency of the government and part of the 
Ministry of Finance. This  agency provides export insurance and guarantee programs. Do any of 
these programs cover agricultural products?  
 
Answer  
Sri Lanka Export Credit Insurance Corporation (SLECIC) does not engage in any form of direct 
financing of exports in the present context . It only involves in provision of Insurance to the 
Exporters to facilitate hedging of their risks against nonpayment by their foreign buyers due to 
commercial and/or noncommercial risks and provision of Guarantees to Banks to cover their risks 
arising on non-settlement of advances granted to exporters on pre and post shipment stages. The 
latter facilitates the exporters to have easy access to Bank Finance on much more liberal terms for 
their working capital needs.  
 
SLECIC’s financing involvement is limited  to the extent of indemnification of losses arising on 
Insurance Policies issued to the Exporters and Guarantees issued to the Banks.  
 
Therefore, SLECIC’s “export financing support” does not involve any direct financing of exports but 
financial support is provided by other means as explained above.  
 
Page 62, paragraph 3.95:  The Secretariat's Report states that Sri Lanka has not made any 
notification to the Working Party on State Trading Enterprises, despite having a biennial obligation 
to do so. Please indi cate when Sri Lanka will make this required notification.  
 
Answer  
Notification to WTO with respect to State Trading Enterprises are largely limited to the enterprises 
which have been granted exclusive or special rights or privileges including statutory or  
constitutional powers in the exercise of which they influenced through purchases or sales, the level 
of or direction of imports or exports.  
 
None of the Sri Lankan State Trading Enterprises are covered by this definition; hence there is no 
need for notifi cation.  
 
Page 65, paragraph 3.113:  Sri Lanka indicates that legislation on plant varieties was in the 
process of being drafted, but has not yet been adopted. Could the GOSL provide an update on the 
status of legislation on plant varieties?  Has the draft l aw been reviewed by public stakeholders? Is 
the legislation Sri Lanka is considering in conformity with the International Union for the Protection 
of New Varieties of Plants (UPOV)? Does Sri Lanka plan to join UPOV 1991 and take advantage of 
the benefits o f membership?  
 
Answer  
Answer will be provided soon.  
 
Page 65, paragraph 3.113:  Could the GOSL provide an update on its accession to the WIPO 
Performances and Phonograms Treaty, WIPO Copyright Treaty as well as the Information 
Technology Agreement? Does Sri  Lanka have any intention to accede to those treaties? If so, is 
there a projected time frame?  
 
Answer  
NIPO is expecting to join WIPO internet treaties and proposal will be made after 2018 with a time 
frame of 2 -3 years from 2018.  
 
Page 65, paragraph 3.113 : Could the GOSL provide an update on development of its national IP 
strategy? What is the timeline for completion of the IP action plan? Does Sri Lanka have a copy of 
this strategy to share? Is the GOSL receiving or seeking any additional support for this  effort 
beyond WIPO? Will the IP Action Plan and national strategy be opened up for public and 
stakeholder comments?  WT/TPR/M/347/Add.1  
 
- 46 - 
 
  Answer  
A subcommittee has been appointed to draft an IP policy for Sri Lanka and it is expected to finalize 
by end of 2017 and upon prepari ng a draft document it will be submitted for approval of the 
authorities and it will be made public calling for opinion hopefully by mid 2017.  
 
In addition to assistance of WIPO it is expected to seek the support or assistance of USPTO, 
Department of Comme rce, State Department of Commerce Washington DC, and Government of 
Republic of Korea.  
 
Page 66, Paragraph 3.114 : The Secretariat notes that NIPO’s responsibilities include “facilitating 
the enforcement of IP rights, such as dispute resolution in copyright and related rights.” Please 
provide additional information as follows:  
 
a. What types of disputes are brought before NIPO?  
b. What is the division of jurisdiction between NIPO and the commercial high courts with 
respect to copyright cases?  
 
Answer  
Answer w ill be provided soon.  
 
Page 66, Paragraph 3.115: The Secretariat notes that “[t]he expression of folklore is protected 
under a sui generis set of provisions.” Please provide additional information as follows:  
 
a. What rights are recognized under the sui ge neris protection for the expression of folklore?  
Answer will be provided soon.  
 
b. Who is entitled to exercise the rights provided for under the sui generis protection for the 
expression of folklore?  
Answer will be provided soon.  
Page 66, paragraph 3.115: The Secretariat’s Report states that “This right does not extend to 
works of architecture, databases or computer programs.”  In context, it is not clear whether “this 
right” is meant to refer to all of the rights described in the preceding sentence, or to only the 
broadcasting and public performance rights, or only the public performance right. Please clarify.  
 
Answer  
Answer will be provided soon.  
 
Page 66, Paragraph 3.116:  The Secretariat notes that Sri Lanka has stated “that amendments 
to the IP Act to in troduce a voluntary registration system for copyrights are being prepared.” 
Please provide additional information as follows:  
 
a. What is the timeline for introducing a voluntary registration system?  
b. What benefit(s) will be provided under Sri Lankan law  to encourage voluntary registration?  
 
Answer  
Answer will be provided soon.  
 
Page 66, Paragraph 3.116: The Secretariat notes that Sri Lanka has stated “a draft amendment 
to the IP Act to introduce limitations and exceptions to the copyright provisions to facilitate access 
to printed materials by the visually impaired has been approved by the Intellectual Property 
Advisory Commission and a Cabinet Memorandum to this effect has been finalized.” Please provide 
additional information as follows:  
 
a. What is th e timeline for finalization of the draft amendment?  
b. How, if at all, do the provisions of the draft amendment differ from the provisions of the 
Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually 
Impaired or Other wise Print Disabled?  
 
Answer  
Answer will be provided soon.  
 WT/TPR/M/347/Add.1  
 
- 47 - 
 
  Page 66, paragraph 3.116:  The Secretariat’s Report states that Sri Lanka has not ratified the 
Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually 
Impaired or Otherwise Print Disabled. Does Sri Lanka intend to ratify that treaty? If so, is there a 
projected time frame?  
 
Answer  
Answer will be provided soon.  
 
Page 66, paragraph 3.117:  Sri Lanka indicates that “[c]ertain inventions are not patentable.” In 
light of the obligation in TRIPS Article 27, can Sri Lanka clarify what inventions are excluded from 
patentability, and how the exclusions are seen to be in conformance with this TRIPS obligation?  
 
Answer  
According to the Section 62(3) of the IP Act, No. 36 of  2003 the following, notwithstanding they 
are inventions shall not be patentable  
62 (3) The following, notwithstanding they are inventions within the meaning of subsection (1), 
shall not be patentable — 
 
(a) discoveries, scientific theories and mathematical  methods;  
 
(b) plants, animals and other micro organism other than transgenic micro organism and an 
essentially biological process for the production of plants and animals other than non -biological 
and microbiological processes:  
 
Provided however, that a p atent granted in respect of micro -organisms shall be subject to the  
provisions of this Act;  
 
(c) schemes, rules, or methods for doing business, performing purely mental acts or playing 
games ;  
 
(d) methods for the treatment of the human or animal body by s urgery or therapy, and diagnostic 
methods practiced on the human or animal body:  
 
Provided however, any product used in any such method shall be patentable;  
 
(e) an invention which is useful in the utilization of special nuclear material or atomic energy i n an 
atomic weapon;  
 
Page 67, paragraph 3.119:  Sri Lanka stipulates that as part of its procedure to issue a 
compulsory license, NIPO will determine the economic value of a patent. What methodology does 
NIPO employ to determine a patent’s value in such cir cumstances?  
 
Answer  
According to the Section 82(2) of the IP Act, No. 36 of 2003 the following,  
82 (2) (c) Director -General may waive the requirements set out in paragraph (b) where he has 
satisfied himself of the existence of a national emergency or any other circumstances of extreme 
urgency or in case of public non commercial use Limitation of owner’s for the purposes such as 
national security, nutrition, health or for the development of others vital section of the national 
economy.  
 
(d) The exploitation  of the patent shall be limited in scope and duration to the purpose as is 
specified in the licence. Such exploitation shall be predominantly for the purpose of supply to the 
domestic market.  
 
(e) The Director -General shall consider each application on its  individual merits before granting a 
licence to exploit a patent.  
 
(f) The issuance of a licence shall be non -exclusive and subject to the payment of adequate 
remuneration to the owner of the patent taking into consideration the economic value as 
determine d by the Director -General, and where applicable, the need to correct anti -competitive 
practices.  
 WT/TPR/M/347/Add.1  
 
- 48 - 
 
  (g) Where such application is for the exploitation of the patent (the second patent) which cannot 
be exploited without infringing another patent (the first pa tent), the following conditions shall 
apply:  
 
(i) the invention claimed in the second patent shall involve and important technical 
advance of considerable economic significance in relation to the invention claimed in 
the first patent;  
(ii) the owner of the first pa tent shall be entitled to a cross licence on reasonable terms to 
exploit the invention claimed in the second patent; and  
(iii) the exploitation authorized in respect of the first patent shall be non -assignable except 
with the assignment of the second patent.  
 
(h) The decision of the Director -General, shall be notified in writing to the owner of the patent as 
soon as practicable.  
 
(i) The Director -General, shall upon, the request of the owner or of the beneficiary of the 
licence, after hearing the parties, vary his de cision by amending the terms subject to 
which licence for the exploitation of the patent is issued to the extent only that the 
changed circumstances justify such variation.  
 
(j) The Director -General shall upon the request of the owner, terminate the non -voluntary license 
if he is satisfied that the circumstances which led to his decision have ceased to exist and are 
unlikely to recur or that the license has failed to comply with terms of such licence.  
 
(k) Notwithstanding anything contained in paragraph,  
 
(j) the Director -General shall not terminate a licence, if he is satisfied that adequate protection of 
the legitimate interest of the beneficiary of the licence justifies the continuity of such licence.  
 
(l) The licence to exploit a patent may be transferre d only with the enterprise or the business of 
the licence of such patent or with the part of such enterprise or business, in relation to which the 
licence to exploit has been granted.  
 
(m) Where a judicial or administrative body has determined that the man ner of exploitation of a 
patent by its owner or its licensee is anti -competitive, and the Director -General is satisfied that the 
exploitation of a patent in accordance with this section would remedy such practice, the Director -
General may authorize any per son, body of persons, government departments or statutory body to 
exploit the patent without a licence of the owner of the patent. The provisions of the above 
paragraphs except those of paragraphs (b), (c) and (g) shall be applicable to such licence.  (3) Any 
person aggrieved by any decision of the Director -General under subsection (2), may tender an 
appeal there from. The provisions of section 173 shal1, mutatis mutandis, apply in respect of such 
appeal.  
 
Page 68, paragraph 3.126:  The Secretariat’s report n otes that well -known international marks 
are protected through registration. Does the government of Sri Lanka protect well -known marks 
that are not registered?  
 
Answer  
Yes, the well -known marks that are not registered are protected.  
 
Page 69, paragraph 3. 130: Can Sri Lanka clarify whether and how it protects undisclosed 
information from disclosure and unfair commercial use in accordance with the obligation in TRIPS 
Article 39.3?  
 
Answer  
According to the Section 160(6) of the IP Act No. 36 of 2003.  
 
(6) (a)  Any act or practice, in the course of industrial or commercial activities, that results in the 
disclosure, acquisition or use by others, of undisclosed information without the consent of the 
person lawfully in control of that information (in this section referred to as “the rightful holder”) 
and in a manner contrary to honest commercial practices shall constitute an act of unfair 
competition.  WT/TPR/M/347/Add.1  
 
- 49 - 
 
  (b) Disclosure, acquisition or use of undisclosed information by others without the consent of the 
rightful holder may, in particular, result from —  
 
(i) industrial or commercial espionage;  
(ii) breach of contract;  
(iii) breach of confidence  
(iv) inducement to commit any of the acts referred to in sub -paragraphs (i) to (iii);  
(v) acquisition of undisclosed information by a third  
(vi) party who kn ew or was grossly negligent in failing to know, that an act referred to in 
sub-paragraphs (i) to (iv) was involved in the acquisition.  
 
(c) For the purposes of this Act, information shall be considered “undisclosed information” if — 
 
(i) it is not, as a body or  in the precise configuration and assembly of its components, 
generally known among, or readily accessible to, persons within the circles that 
normally deal with the kind of information in question;  
(ii) it has actual or potential commercial value because it is  secret; and  
(iii) it has been subject to reasonable steps under the circumstances by the rightful holder 
to keep it secret.  
(d) Any act or practice, in the course of industrial or commercial activities, shall be considered an 
act of unfair competition if it con sists of results in — 
 
(i) an unfair commercial use of secret test or other data, the origination of which involves 
considerable effort and which have been submitted to appropriate authority for the 
purposes of obtaining approval of the marketing of pharmaceuti cal or agricultural or 
chemical products which utilize new chemical entities; or  
(ii) the disclosure of such data, except where necessary to protect the public, or unless 
steps have been taken to ensure that the data is protected against unfair commercial 
use. 
 
(e) The undisclosed information for the purpose of this Act shall include — 
 
(i) technical information related to the manufacture of goods or the provision of services; or  
 
    (ii) business information which includes the internal information which an enterpri se has 
developed so as to be used within the enterprise.  
 
Page 73 -74, Paragraph 4.7 and Table 4.3:  The Secretariat states that “there was significant 
growth in coconut oil exports, from US$2.2 million in 2010 to US$121 million in 2015.” However, 
Table 4.3 indicates that coconut, palm kernel, and babassu oil exports, under HS1513, were 
US$7.3 million in 2010 and US$120.6 million in 2015.  Does the “significant growth in coconut oil 
exports” of US$121 million include increased exports of palm kernel and babas su oil?  
 
Answer  
HS 1513 Covers virgin coconut oil, crude coconut oil, crude, virgin coconut oil, crude palm kernel 
or babassu oil, and palm kernel or babassu oil. Following statistics show that gradual increase of 
virgin coconut oil, crude coconut oil and coconut oil exports during the period from 2011 to 2015  
and there is no such increase of crude palm kernel or babassu oil and palm kernel or babassu oil 
exports during the same period.  
 
Sum of NET_MASS in Kgs  RELEASED YEAR   
HS HS Description  2010  2011  2012 2013  2014  2015  Grand Total  
15131111  vergin coconut oil, in 
bulk 1,231,360  1,273,372  1,541,613  1,762,658  4,836,333  8,114,057  18,759,393  
15131119  Crude coconut oil, in 
bulk, excl virgin 
coconut oil  1,702  20,885  157,310  317,232  354,660  267,463  1,119,251  
15131121  Crude, virgin, 
coconut oil not in 
bulk 18,702  38,247  112,588  341,861  2,450,254  5,298,826  8,259,469  
15131129  Crude coconut oil 
(excl vergin), not in 
bulk 6,694  9,291  61,435  75,397  1,007,414  2,701,126  3,861,357  WT/TPR/M/347/Add.1  
 
- 50 - 
 
  Sum of NET_MASS in Kgs  RELEASED YEAR   
15131910  Coconut oil, not 
crude, in  bulk 580 72,928  760   9 126,052  200,329  
15131990  Coconut oil, not 
crude, not in bulk  440,248  548,353  672,258  1,327,624  2,613,932  5,586,402  11,188,817  
15132100  Crude palm kernel 
or babassu oil and 
fraction thereof          1 441 442 
15132900  Palm kernel or 
babassu oil  & 
fractions,refined or 
not,not 
chem.modified  493 1,682  85 12,008  69 307 14,644  
Grand Total  1,699,779  1,964,757  2,546,049  3,836,780  11,262,671  22,094,673  43,404,710  
 
Questions Based on the Secretariat Report, WT/TPR/S/347  
 
Page 65, paragra ph 3.113:  Sri Lanka indicates that legislation on plant varieties was in the 
process of being drafted, but has not yet been adopted. Could the GOSL provide an update on the 
status of legislation on plant varieties?  Has the draft law been reviewed by publi c stakeholders? Is 
the legislation Sri Lanka is considering in conformity with the International Union for the Protection 
of New Varieties of Plants (UPOV)? Does Sri Lanka plan to join UPOV 1991 and take advantage of 
the benefits of membership?  
 
Answer  
Answer will be submitted soon.  
 
Page 66, Paragraph 3.114 : The Secretariat notes that NIPO’s responsibilities include “facilitating 
the enforcement of IP rights, such as dispute resolution in copyright and related rights.” Please 
provide additional information  as follows:  
 
a. What types of disputes are brought before NIPO?  
b. What is the division of jurisdiction between NIPO and the commercial high courts with 
respect to copyright cases?  
 
Answer  
a. Copyright disputes – such as violation of copyright, non -payment o f royalty to authors of 
books, non -payments of due payments by producers of films etc.…  
 
b. Only the power to resolve disputes – no jurisdiction to hear cases – (not empowered to 
implement the order made after a dispute resolution; parties should obtain court  order if 
not implemented)  
 
Page 66, Paragraph 3.115: The Secretariat notes that “[t]he expression of folklore is protected 
under a sui generis set of provisions.” Please provide additional information as follows:  
 
a. What rights are recognized under the sui generis protection for the expression of folklore?  
 
Answer  
Expression of folklore are protected against  
 
(a) Reproduction;  
(b) Communication to the public by performance, broadcasting distribution by cable or 
other means;  
(c) Adaptation, translation, and other transf ormation when such expression of folklore are 
made for commercial purposes or used on nontraditional or non customary context.  
 
b. Who is entitled to exercise the rights provided for under the  sui generis protection for the 
expression of folklore?  
 
Answer  
The right to authorize acts above mentioned are vested in a competent authority to be determined 
by the Minister in charge of the subject of IP. The competent authority is the Director General of 
NIPO WT/TPR/M/347/Add.1  
 
- 51 - 
 
   
Page 66, paragraph 3.115: The Secretariat’s Report states  that “This right does not extend to 
works of architecture, databases or computer programs.”  In context, it is not clear whether “this 
right” is meant to refer to all of the rights described in the preceding sentence, or to only the 
broadcasting and publi c performance rights, or only the public performance right.  Please clarify.  
Answer  
 
“This right” as given in paragraph 3.115 of the report means the “right of fair use” and not of the 
right of the Copyright owner.  
 
Further clarification is given below;  
 
As per Section 12 of the Intellectual Property Act, without the authorization of the owner of the 
Copyright, private reproduction of a single copy of a published work is permitted if such 
reproduction is made by a physical person from a lawful copy of such work exclusively for his own 
personal use – (fair use).  
 
However such use (fair use) is not permitted for the reproduction of;  
 a work of architecture for a building or other construction;  
 reprography of a book in whole or substantial part or a musical wo rk in the form of 
notations;  
  of the whole or substantial part of a database;  
 of a computer program (except if such computer program is used as a reproduction in a 
single copy or the adaptation of a computer program by the lawful owner of a copy of that 
program without the authorization of the owner of Copyright, if it is necessary for use as a 
computer program solely for the purpose and extent for which it was obtained; or such 
adaptation is necessary for archival purposes and for replacement of such cop y if it is lost, 
destroyed or rendered unusable)  
 
Page 66, Paragraph 3.116:  The Secretariat notes that Sri Lanka has stated “that amendments 
to the IP Act to introduce a voluntary registration system for copyrights are being prepared.” 
Please provide addi tional information as follows:  
 
a. What is the timeline for introducing a voluntary registration system?  
b. What benefit(s) will be provided under Sri Lankan law to encourage voluntary registration?  
 
Answer  
 
a. Voluntary registration system will be introduce d by 2018.  
 
b. A ‘prima facia’ evidence to the creator to prove his ownership to the creation 
(copyright/related rights).  
 
Page 66, Paragraph 3.116: The Secretariat notes that Sri Lanka has stated “a draft amendment 
to the IP Act to introduce limitations and exceptions to the copyright provisions to facilitate access 
to printed materials by the visually impaired has been approved by the Intellectual Property 
Advisory Commission and a Cabinet Memorandum to this effect has been finalized.” Please provide 
additio nal information as follows:  
 
a. What is the timeline for finalization of the draft amendment?  
b. How, if at all, do the provisions of the draft amendment differ from the provisions of the  
 
Marrakesh Treaty to Facilitate Access to Published Works for Perso ns Who Are Blind, Visually 
Impaired or Otherwise Print Disabled?  
 
Answer  
 
a. Amendment (Marrakesh Treaty) will be finalized before end of 2016.  
 
b. Draft amendment has similar provisions to that of the Marrakesh Treaty.  
 WT/TPR/M/347/Add.1  
 
- 52 - 
 
  Page 66, paragraph 3.116:  The Secretariat ’s Report states that Sri Lanka has not ratified the 
Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually 
Impaire d or Otherwise Print Disabled. Does Sri Lanka intend to ratify that treaty? If so, is there a 
projected  time frame?  
 
 
Answer  
 
Government of Sri Lanka has deposited ratification of documents on 5th October 2016. It will come 
into effect in January 2017.  WT/TPR/M/347/Add.1  
 
- 53 - 
 
  MALAYS IA 
 
Page 34 -35 
1.1.1   Investment incentives and promotion  
1.1  Sri Lanka has had specific provisions to at tract certain industries or sectors (Box 2.2); fiscal 
incentives are provided on a case -by-case basis. As of June 2016, corporate income tax holidays 
were being revised and a new incentive scheme was to be formulated by the Government, placing 
special focu s on facilitating investments and ease of doing business. Investment incentives have 
included corporate tax incentives, import duty exemption, exemption of the tax on dividends, and 
exemption of exchange controls. These fiscal investment incentives were am ended periodically  
during the review period. The Government ceased to offer them to new investments as of 
31 October 2014, however, those agreements concluded with investors under the BOI Act 
(Section  17) before that date remain active and in place. It is noted that Sri Lanka has promoted 
certain sectors in which investment restrictions still remain, e.g. aviation, energy/mining, 
telecommunications, and retail trade.  
 
Question:  
 
Appreciate if Sri Lanka could indicate when the new incentive scheme will be in troduced?  
 
Malaysia would also welcome information on the incentives provided for new investments after 31 
October 2014?  
 
ANSWER  
Sri Lanka has made proposals with regard to the new incentive policy, in its 2017 Budget 
presented to Parliament on the 10th o f November 2016. These will be incorporated into the new 
incentive scheme, which will be announced in the first quarter of 2017.  
 
Page 41  
3.1.2  Customs valuation  
3.11. Additionally, Article 10 of Schedule "E" of the Customs (Amendment) Act No. 2 of 2003 
grants the Minister (of Finance) – with the approval of the Cabinet of Ministers and in the interest 
of the national economy or for any other reason – the authority to apply minimum values for any 
goods and for a period to be specified in the Order implemen ting the measure. As such, Sri Lanka 
has established minimum values on certain products for customs purposes. Minimum values are 
used for motor vehicles under HS headings 87.02, 87.03, 87.04 and 87.11. The valuation method 
used is the transaction value met hod based on an invoice issued by the manufacturer. Vehicles 
older than three years cannot be imported. As of 27 May 2016, automobile imports are only 
subject to an excise tax, which ranges from 70% to 290% depending on engine type and size.  
 
Question:  
 
Malaysia would like to obtain information if there are any plan to revise the application of minimum 
values for goods?  
 
ANSWER  
The determination of the minimum value has been revised and accordingly the value of 
the motor vehicles imported into Sri Lanka wil l be determined based on the 
manufacturers’ price or invoiced FOB value, whichever is higher. This has been 
published under the Gazette Notification No. 1956/17 dated March 1st, 2016.  
 
3.1.7 Contingency measures  
3.47. With respect to safeguard measures, Sr i Lanka currently has no laws or regulations to 
address these. According to the authorities, proposed trade defence bills on anti -dumping, 
countervailing and safeguard measures were submitted to the Cabinet in July 2014. The Cabinet 
required changes to the  bills; the bills (with the required changes incorporated) have subsequently 
been resubmitted to the Cabinet for approval before being submitted to Parliament for approval. 
The authorities stated that these bills were part of the Trade Promotion Bill, whic h would be 
submitted to Parliament for approval  
 
 WT/TPR/M/347/Add.1  
 
- 54 - 
 
  Question:  
 
Appreciate if Sri Lanka could update on the status of the Bill, as well as expectation of the 
approval.  
 
ANSWER  
The Draft Trade Defense Bill has been approved by the Cabinet and soon it will be p resented to the 
Parliament.  
 
GOVERNMENT REPORT  
 
Page 8  
4.4. Rationalization of the tariff structure was one of the major policy directives of the last budget 
proposal. In the year 2009, Sri Lanka had a five -band tariff system and it was transformed into a  
four-band system in 2010 which continued till the end of 2015. According to the new budget 
proposal to rationalize the tariff system, a three -band tariff structure has been introduced. 
Accordingly, the current tariff bands remain at 0%, 15% and 30%. Furth er, out of the total of 
6965 tariff lines at HS eight digit level, 3922 tariff lines or 56% has zero tariff rate while 1324 lines 
are with 15% and 1457 lines are with 30% tariff. A few tariff lines are subject to luxury rates.  
 
Question:  
 
Malaysia would li ke to seek information on the tariff lines subjected to luxury rates.  
 
Answer  
The 'Luxury duty rates refer to the rate, that applied beyond our three band tariff rates of 0%, 
15% and 30% and these rates are being applied mainly on Chapter 22 (Tobacco) and 24 (Alcoholic 
Beverages).  
 
Page 11  
7.4. The agriculture sector is intended to be a means of inclusive growth as well as a potential 
export sector. For this purpose, the Government aims to transform the current agricultural sector 
into an agribusiness expor t industry by 2020. Twenty -Three Agricultural Development Mega Zones 
have also been proposed in order to make Sri Lanka's agricultural products globally competitive. 
The national agricultural policy also includes measures to increase domestic production to  ensure 
food security, enhance productivity and reduce unit costs of production, improve living standards 
and income of farming communities, application of environmentally friendly techniques in 
agriculture.  
 
Question:  
 
Appreciate if Sri Lanka could provid e more information on the 23 Agricultural Development Mega 
Zones.  
 
ANSWER  
With the Government’s aim of achieving integrated development of primary industries, 23 
designated Agricultural Mega Zones are expected to be established by the year 2020.  
 
Under thi s program, it is aimed to concentr ate its efforts in developing related industries in certain 
geographical locations in order for higher financial returns to be realized through the increased 
efficiency and productivity of all participants in the value cha in. Similarly all value chain activities 
are intended to happen around the same locality through the Mega Zones which will aim to 
develop links to export markets, agro -processing equipment, food processing factories, irrigation 
schemes, new technology and innovations in a designated province to benefit the regional farming 
communities.  
 
The Mega Zones are aimed at encouraging smallholder farmers and agri -businesses as they will 
have greater opportunity to be a part of the value chain in order to obtain high er value or larger 
portion of the profits.  WT/TPR/M/347/Add.1  
 
- 55 - 
 
  THAILAND  
 
QUESTION REGARDING THE REPORT BY THE SECRETARIAT  
 
2.  TRADE AND INVESTMENT REGIME  
 
Page 34 (paragraph 2.52)  
Question 1 Please describe the procedures taken by BOI of Sri Lanka to help facilitate indust rial 
labour relations for promoting and inciting foreign investment.  
 
ANSWER  
Facilitation of industrial labour relations is carried out by the Investor Relations Dept. of the BOI. 
The main function of the department is the maintenance of industrial peace i n order to increase 
productivity and efficiency through the promotion of social dialogue aimed towards decreasing the 
gap between the management of a n enterprise and its employees.  
 
Accordingly, labour units have been set up in each Industrial zone to faci litate resolution of labour -
related issues and investigate into complaints/ grievances of employees. As these Companies are 
subject to the ordinary law of the land in relation to labour standards required to be upheld, the 
BOI also carries out periodical i nspections to ensure compliance to such standards. Furthermore, 
awareness programs are conducted on labour law, health and safety, positive thinking etc. for the 
maintenance of a productive labour force. The Department also participates in the National Lab our 
Advisory Council representing the BOI sector. This Council suggests changes in the law and 
working practices to facilitate workers. In relation to settlement of industrial disputes, the BOI 
provides assistance for the speedy settlement of such together  with the Ministry of Labour.  
 
3. TRADE POLICIES AND PRACTICES BY MEASURE  
 
Page 61 (Section 3.90)  
Question 2 Please define investigative powers and scope relating to anti -competitive practices 
and abuse of dominant position under Consumer Affairs Authority  Act No.9 of 2003  
 
ANSWER  
Investigative powers;  
 
The Consumer Affairs Authority, in conducting investigations give to all interested parties an 
opportunity of being heard and production of evidence, oral or documentary, as in the opinion of 
the Authority i s relevant to such investigations. The Authority has powers of a District Court;  
 
 to issue notices and require the attendance of any witness;  
 to require the production of documents or records;  
 to administer any oath or affirmation to any witness.  
 
The ad judicative powers are with the Consumer Affairs Council which is an independent body 
under the same Consumer Affai rs Authority Act No. 9 of 2003.  
 
The definition regarding anti – competitive practices covers a wide spectrum of situations and one 
has to con sider the following aspects.  
 
I. That anti -competitive practices prevail in the course of business conduct  
II. It could be pursued by one person or by a group  
III. Such anti -competitive practice is confined to goods and services provided in Sri Lanka  
IV. Such anti – comp etitive practice will restrict, distort or prevent competition.  
V. Such practices are likely or is intended to have the effect of restricting or preventing 
competition.  
 
The definition of an anti -competitive practice recognizes the importance of taking in to account the 
individual circumstance of each practice by basing its test on wherever a practice is anti – 
competitive and not on the form of the practice but on its effect or its likely or intended, effect on 
competition. By adopting this approach, it enabl es proper consideration to be given to the 
individual circumstances of a practice, which may not be so in another. Therefore, it would be 
wrong to list out practice which will be regarded as being anti – competitive in all circumstance.  WT/TPR/M/347/Add.1  
 
- 56 - 
 
  The Act does not sp ecify the types of conduct which may be subject to investigation nor does it 
provide detailed guidance on what constitutes an anti -competitive practice. It is therefore, left to 
the Authority to investigate anti -competitive practices taking in to considera tion the market 
position, the relevant market, the firm’s intentions, possible anti – competitive practices, adopted 
pricing policy, distribution policy,  sales and refusals to deal, market and customer allocation, any 
insertion of non -competition clauses e tc. Authority consider factors which unduly affect the 
competition.  
 
Abuse of dominant position  
 
The procedure for control or eliminate abuse of dominant positions has not been specified in the 
Consumer Affairs Authority Act No 9 of 2003.  
 
4. TRADE POLICIE S BY SECTOR  
 
Page 93 (paragraph 4.87 ) 
Question 3 In order to receive investment incentives for manufacturing during 2010 -31 October 
2014, some of the incentives were granted depending upon minimum export requirements ( % of 
output). In this regard, whether or not this investment policy measure complies with Sri Lanka 
commitments to WTO TRIMs Agreement under Annex: Illustrative List No. 2 (c) 
 
ANSWER  
Investment incentives granted by the BOI for the manufacturing sector do not restrict the 
exportation or sale for export by an enterprise, as referred in the Annex: Illustrative List No. 2(c). 
The incentives are granted subject to a qualifying criteria of minimum export requirements which 
bring these incentives under the purview of the WTO Agreement on Subsidies a nd Countervailing 
Measures. Accordingly, as a member referred to in Annex VII of such Agreement, Sri Lanka had 
the legal cover to provide subsidies contingent on export performance during aforementioned 
period . 
 
Page 81 (paragraph 4.31)  
Question 4 Accordin g to page 81 no. 4.1.1.10.3, Paddy Marketing Board, Thailand would like to 
obtain further information regarding the Democratic Socialist Republic of Sri Lanka’s domestic 
support policy on mechanism, and practice of the rice price guarantee program during t he 
harvesting season in 2015.  
 
ANSWER  
The Paddy Marketing Board (PMB) purchases paddy from the farmers to stabilize the open market 
price with the aim of enhancing the livelihood of the farmers. PMB purchases approximately 
account for 7% of the total produ ction of paddy. The private sector plays a major role in paddy 
purchases and marketing. PMB is expected to compete with the private sector. Depending on the 
crop as per the season purchases by PMB may vary. The PMB does not receive or provide any 
subsidy o n these operations. Its funds requirements are channeled from the state banks as a loan 
to purchase paddy.  
 
The following table provides the information on the operation of price guarantee programme.  
 
Season  Guaranteed Price (Rs./kg)  
Nadu (Long Grain)  
Red rice and White rice  Samba (Short Grain)  
Red rice and White rice  Keeri Samba (Special 
Short Grain)  
Red rice and White 
rice 
2012/13 Maha  32.00  35.00  - 
2013 Yala  32.00  35.00  - 
2013/14 Maha  32.00  35.00  - 
2014 Yala  32.00  35.00  - 
2014/15 Maha  45.00  50.00  - 
2015 Yala  45.00  50.00  - 
2015/16 Maha  38.00  41.00  50.00  
2016 Yala  38.00  41.00  50.00  
 WT/TPR/M/347/Add.1  
 
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  OTHER Questions  
 
Question 5 In order to receive investment incentives for manufacturing during 2010 -31 October 
2014, some of the incentives were granted depending up on minimum export requirements (% of 
output). In this regard, whether or not this investment policy measure complies with Sri Lanka 
commitments to WTO TRIMs Agreement under Annex: Illustrative List No.2 (c).  
 
Repetition of Question -03 
 
ADDITIONAL QUESTION S FROM THAILAND  
 
Customs Procedures and Requirements  
Paragraph 3.1 (Page 4  
What kind of importing procedures are eligible under the implementation of Single Window of Sri 
Lanka?  
 
Answer  
There is no specific importing procedure as such to be eligible under the 'Single Window" system of 
Sri Lanka. Sri Lanka Customs has made arrangement to link nearly 20 border agencies to the 
Customs Asycuda World System.  
 
Does the Single Window system allow importers to apply for import certificates such as those 
under TBT/S PS requirements?  
 
Answer  
As at Today Import Control License and Tea Board Permits are received online to the Customs 
Computer system. Other Certificates like Plant Quarantine, Sri Lanka Standards are received 
manually.  
 
Paragraph 3.7 (Page 40)  
Does Sri Lan ka plan to extend the scope of Advance Ruling for importers to obtain Ruling on 
custom valuation and rules of origin in the future? And extend the biding period to be more than 6 
months?  
 
Answer  
Sri Lanka has already extended the binding period of Advance Rulings on Goods classification from 
six months to one year. Sri Lanka plans to extend the scope of Advance Rulings on Valuation and 
Rules of Origin in future.  
 
Paragraph 3.11 (Page 41)  
Please kindly elaborate more on the custom valuation system based on S ri Lanka’s own “minimum 
value”:  
 
1. List of the products fall under “minimum value” system  
2. How is the minimum value determined? And how often is being reviewed?  
3. In case where the transaction value declared by manufacturers are under fixed “minimum 
value” What will be the basis for custom valuation? Is there a system which allows importers to 
submit or request for the government to revi ew or adjust the minimum value?  
 
Answer  
The determination of the minimum value has been revised and accordingly the va lue of the motor 
vehicles imported into Sri Lanka will be determined based on the manufacturers’ price or invoiced 
FOB value, whichever is higher. This has been published under the Gazette Notification No. 
1956/17 dated March 1st, 2016.  
 
 
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