Govt. to review ethanol smuggling cases to recover billions of rupees in losses
Culprits got away paying small fines during previous regime
By Saman Indrajith-October 17, 2015, 7:34 pm
The government has decided to initiate action to recover losses running into billions of rupees by reviewing ethanol smuggling cases, where the culprits had escaped by paying small fines, thanks to the patronage of powerful political figures of the previous regime, a senior Cabinet Minister said.
"I have instructed the authorities to take measures to recover the losses from the relevant parties as the government has suffered enormously due to illegal ethanol imports", Finance Minister, Ravi Karunanayake said.
"It seems that we could recover more than Rs 100 million in the first round itself. We have details of those detected by the Customs, which investigated the illegal import of ethanol to manufacture alcohol during 2013 and 2014," the minister told The Sunday Island.
He said that most ethanol stocks had been brought to Sri Lanka from Thailand via Vietnam. The consignments found by authorities had 96% strength and been imported on the pretext of bringing down Rosin Resin and Turpentine Sulphate.
"The smugglers had imported them as chemicals resulting in a total loss exceeding Rs 100 million during the past two years. Two key illegal importers have been identified and they would be compelled to reimburse the losses suffered by the government," Minister Karunanayake said.
"Customs officials have completed compiling comprehensive reports on the cases of the past two years. They are now collating information on cases of the previous years," he said.
There are only 27 licensed importers of ethanol in the country, he said. "According to details provided to me by the Excise Department, 13,547,481 litres of ethanol have been illegally imported to the country during 2013. They had been brought down to manufacture alcohol. So much for the ‘Mathata Thitha’ campaign hyped by the worthies of the then government, the minister noted.
The Finance Minister said that he had obtained the case reports from the Customs department and there are many instances where some selected importers had been imposed only small fines by the authorities. There is one instance where a person found guilty of smuggling in 28,800 litres of ethanol had been fined only Rs 500,000. There is a pattern of some smugglers getting mitigated forfeitures, he said.
Despite their notorious history of smuggling ethanol, many had defaulted paying the fines, the Minister said adding that he had received reports on smugglers receiving the backing of powerful politicians and the connivance of some Customs officials. "With regard to the officials, who have been abusing the Customs Law to embezzle tax revenue, we would be launching a proper investigation to probe their conduct".
The companies so far been identified by the Customs to recover losses during the past two years are Network Seven (Pvt) Ltd., Isochem Holdings (Pvt) Ltd., Oxychem (Pvt) Ltd., Axis Industries (Pvt) Ltd., Wellcome Chemicals Lanka (Pvt) Ltd., Wayamba Industrial Coating (Pvt) Ltd., Nova Logistics (Pvt) Ltd., and Silvis Industries (Pvt) Ltd, according to Minister Karunanayake.
