Over Rs. 400 m loss to Treasury by Customs’ failure to recover penalty from scrapped copper exporters

By Nirmala Kannangara

Sri Lanka Customs’ failure to recover a penalty from a group of exporters amounting to several million rupees has raised questions amongst its own employees.

Following the detention of two containers of scrapped copper in 2014 which were ready to be exported, it had come to light how eight similar containers have been exported by the same group without paying the applicable customs duties. Sri Lanka Customs' failure to recover the applicable duties has resulted in a loss of over Rs. 431 million to the national coffers.

As Sri Lanka Customs comes under the Finance Ministry, the Daily FT made several attempts to speak to Secretary to the Treasury Dr. Harshana Suriyapperuma to find out why the Finance Ministry is silent and what action they are planning to take against them by allowing the offenders to go scot free.

Several calls were made to Dr. Suriyapperuma which went unanswered. A text message was then forwarded, seeking an appointment with him to find out why the Finance Ministry remains silent although this scam has been brought to his notice. The Treasury Secretary did not respond to this text message as well until the paper went for publication.

Meanwhile, the Daily FT was continuously seeking explanation from Customs Department and contacted the then Director General Customs Seevali Arukgoda before he went on retirement to find out why the Customs Department has not recovered this money over the past eight years, despite the Court of Appeal on 2 May 2018 directed that this inquiry should be concluded within five months.

“We have not abandoned this inquiry. I will give you a contact number of a senior officer from whom you can get all the details regarding this issue. I will text his number to you after this call,” Arukgoda said.

Since Arukgoda did not stick to his promise, several calls were then taken to him to get this officer's  name and telephone number. Although on multiple occasions he promised to send the name and the phone number, Arukgoda did not send the particular officer's details to the Daily FT.

Attempts were then taken to contact the new Director General Customs (DGC) Wimal S.K. Liyanagama but he was not contactable as his direct landline number went unanswered. Thereafter Nayomi, the Personal Assistant to the DGC was contacted and requested a mobile number for the DGC which appeal was declined. Later, the Daily FT was asked to make a formal request to the DGC. Although an email was sent to the DGC asking why the Customs Department has abandoned the investigation for the past several years, until the paper went for publication, there was no response from DGC Liyanagama.  

Be that as it may, after this scam was unearthed, Sri Lanka Customs has conducted two inquiries (Nos: PREV/ FPO/ 261/ 2014 and PREV/ FPO/ 266/ 2014) in 2014, into the unlawful export of the eight containers and the other two forfeited containers for not paying the applicable customs duties. 

The formal inquiry and the investigation has been concluded in 2017. The order was delivered on 8 May 2017, by the Inquiring Officer, Deputy Director Customs V.W. Nanayakkara. The Inquiring Officer has imposed a penalty of Rs. 529. 683 million on the principal offender Ravindra Buddadhasa Wettasinghe being treble the value of the customs duty on the ten shipments. Later under Customs Ordinance Sections 130 and 163, this penalty was mitigated to Rs. 176. 546 million. In addition another three mitigated penalties of Rs. 85 million each were imposed on Mrs. I.C.M. Wettasinghe, M.N.H. Izzath and R.I. Ramanayake. These too were treble the value of the customs duty on the 10 shipments.

As per the Inquiring Officer’s report dated 8 May 2017, a copy of which the Daily FT in is possession of, the (Inquiring Officer) has declared forfeiture of 32, 140 kg of scrapped copper in the two containers bearing numbers GESU3141650 and FCIU2514400 valued at Rs. 17.268 million and Rs. 14.573 million respectively in terms of Section 12, 44 and 57 of the Customs Ordinance (Chapter 235) read with Import and Export Control Act No 1 of 1969 and regulations made thereunder.

The report further states, ‘Today in the morning, a letter has been delivered to my office by Sri P. Srikantha Attorney-at-Law requesting time to submit the answers to the charges on behalf of Mrs. I.C.M. Wettesinghe and M.N.H. Izzath. This letter is also supported with two medical certificates issued by Dr. Azyan Shafeeq recommended leave for five days for Ms. Wettasinghe and Izzath.

‘Having considered the time and opportunities granted to the suspects and also considering the constraints this inquiry is undergoing I am unable to postpone this inquiry any further. Order was conveyed to R.B. Wettasinghe and Nuwan Ekanayake who were absent at the inquiry’.

Subsequent to the customs order delivered by the Inquiring Officer, the alleged principal offender R.B. Wettasinghe who was directed to pay the mitigated penalty of Rs. 176.546, by SLC, filed an appeal (CA/ Writ/ 162/ 2017) before the Court of Appeal, challenging the inquiring process on the grounds that neither he nor his legal representative could participate in the inquiry proceedings due to medical incapacity.

The Petitioner R.B. Wettasinghe has sought the court to issue a mandate in the nature of a Writ of Mandamus directing the Respondents- Director General Customs Chulananda Perera, Chief Assistant Preventive Officer (Operations) H.M. Jayasekera, Deputy Director of Customs V.W. Nanayakkara and Superintendent of Customs M.S.J. de Silva to allow the Petitioner to give opportunity to place his case and or explain his position by adducing evidence/ call any witnesses before coming to a decision to frame the charges and to issue an interim order staying further proceedings until the final determination of this case is delivered.  

By consent of both parties the Court ordered that the inquiry be recommenced and conclude within three months ensuring the right of the petitioner to cross examine the witnesses relied upon in the initial proceedings.

The Court directives further states, ‘Learned President’s Counsel for the Petitioner states that the learned Additional Solicitor General who appeared for Sri Lanka Customs on 25 May 2017 had agreed that the Petitioner will be given an opportunity to cross examine all the witnesses whoever called after the said date of adjustment. This is however subject to the agreement by both parties to conclude the relevant inquiry within three months reckoned from 25 May 2017.

‘Minutes recorded on 27 October 2017 shows that the court had been informed that the said inquiry could not be concluded within the said time frame. The learned counsel for the petitioner had requested that this case be mentioned in two months reckoned from 27 October 2017. The learned State Counsel had no objections for that application on humanitarian grounds.

‘The learned President’s Counsel for the petitioner informed court that the petitioner is contended with the undertaking given by the respondents and informed court that he does not wish to proceed with this application any further. 

‘In this circumstances we see no requirement for this case to be permitted to be pending in the list of cases of this court. Therefore we direct that the proceedings of this case be terminated- Justices Padman Surasena and Shiran Gooneratne’.   

However, it is now evident that, contrary to the directions of the Court, the said inquiry has not been re-commenced and concluded even after a lapse of nine years.

This inaction constitutes a serious administrative failure effectively enabling the primary offenders to avoid legal sanctions and depriving the State the legitimate revenue that should have been collected. 

It is learnt that Sri Lanka Customs have no records to show that they recommenced this inquiry after five months and concluded as directed by the Court of Appeal.

It is learnt that the principal offender R.B. Wettasinghe who has to pay Rs.176.546 million to the state has entered into an agreement with a land sale company to sell his only remaining family property in Sri Lanka for Rs 3 billion in order to relocate permanently in the United Kingdom.

When contacted the prospective purchaser, legal representatives of the land sale company confirmed this newspaper their interest in the property and the matter will be perused by them on behalf of the purchaser through formal procedure 

Meanwhile, it is learnt that a whistleblower has made written complaints by letters dated 18 August 2025 and 29 August 2025, respectively to the then Director General Customs (DGC) P.B.S.C. Nonis and his successor Seevali Arukgoda  seek their intervention to recover this money but to no avail.

Speaking to the Daily FT, spokesman to this whistleblower said that the Customs Department is not interested to recommence this inquiry and recover the money to the national coffers which is a huge revenue loss to the customs department in general and the country in particular.