The Criminal Investigation Department (CID) has told the Colombo Chief Magistrate’s Court that 21 leading companies are under investigation over the alleged illegal transfer of more than Rs. 190 billion — roughly US$700 million — out of Sri Lanka under the guise of importing goods, in violation of the Customs Ordinance.
According to the Daily Mirror, investigators said six of the companies have been identified so far. Suspect Jeffrey Mohamed, who was remanded over the alleged transfer of over US$700 million overseas, is accused of facilitating the racket, in which payments were sent abroad as advances for imports that never materialised.
The court proceedings mark the latest stage of a wider probe into telegraphic-transfer fraud that authorities say drained hundreds of millions of dollars in foreign exchange from the economy during the country’s currency crisis.
In a related move, Parliament has taken up new regulations under the Import and Export (Control) Act aimed at closing the advance-payment loophole exploited in the scheme. EconomyNext reported that the leakage — which authorities put at around US$715 million — involved roughly 55 individuals and 107 companies between 2023 and 2026.
The government is also moving to criminalise such fraud outright. Deputy Minister of Finance and Planning Anil Jayantha told Parliament that legal provisions are being drafted to make individuals criminally liable for financial fraud tied to import and export transactions, Ada Derana reported. At present such offences are treated only as civil matters because of loopholes in the Foreign Exchange Act, under which the penalty is merely a fine imposed by the Central Bank. A Cabinet paper will be submitted to reclassify the activity as a criminal offence, he said, adding that investigations had exposed large-scale frauds in which individuals remitted US dollars abroad without importing any corresponding goods.
The Opposition cautioned that the tighter rules could create additional red tape for legitimate importers, and urged the government to ensure the new controls do not hamper genuine trade while targeting fraudulent transfers.
Officials have said plugging the advance-payment channel is essential to protecting the country’s foreign reserves and preventing the misuse of the import system to move money offshore.
