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SL apparel sector up in arms against removal of protection from anti-competitive practices

Sri Lanka’s apparel sector, a major much needed foreign exchange earner for the country has expressed concerns on the withdrawal of protection granted to importers and exporters from anti-competitive practices of service providers for many years.

The Government has taken action to withdraw a gazette which has been protecting importers and exporters from anti-competitive practices of service providers for many years.

Issuing a statement, the Joint Apparel Association Forum (JAAF) said it was perturbed to learn that the Government was planning to withdraw Gazette No 2041/10 dated 17th October 2017 of the Licensing of Shipping Agents, Freight Forwarders, Non-Vessel Operating Common Carriers and Container Operators Act, No 10 of 1972.

Gazette No 2041/10 which is the amended Gazette No 1842/16 of 27th October 2013 reconfirmed four cardinal principles to protect both importers and exporters from service providers who may charge exorbitant fees in addition to freight for the carriage of goods.

However all importers and exporters of the country, including the apparel industry represented by JAAF and the Sri Lanka Manufacturers and Exporters of Rubber Products (SLAMERP), have been dismayed by this move.

The Minister of Ports issued the new Gazette No 2302/24 of 20th October 2022 introducing a maximum delivery order fee and new additional charges of US$8/ Cubic Meter under a broader category of a “cost recovery charge”.

Thus, Iit will be ontravening the cardinal principles and protections guaranteed to Sri Lankan importers and exporters, curtailing economic activity and driving up the costs of all purchases.

The entire import and export industry, including JAAF, vehemently objected to the regulations introduced under Gazette No 2302/24.

The apparel sector forum says the Gazette violates the core principle of all-inclusive freight cost that requires the contracting party to bear the full cost of such freight.permitting freight forwarders and shipping agents to charge fees from third parties who are not party to the original contract.

New additional charges will undoubtedly increase the cost of freight, for both imports and exports, which will lead to higher costs of living for the public, and reduce the competitiveness of exports, at a time when export growth is crucial to the recovery of the economy, it added.

Moreover, to the further dismay of importers and exporters, on 5th January 2023, the Minister tabled a supplement in Parliament to amend the Licensing of Shipping Agents Act No 10 of 1972 to allow himself the authority to set Delivery Order and other fees, whereas the previous Gazette demanded the service providers to obtain the approval of DGMS to do so.

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