Restrictions on imports, 

21.  (1) No person shall, except with the permission of the bank, import into Sri Lanka 

(a)  any notes of a class which are or have at any time been legal tender in Sri Lanka; or 

(b)  any such other notes as may be prescribed being notes issued by a bank or notes of a class which have at any time been 
legal tender in any territory ; or 

(c)  any gold. 

(2)  The bringing or sending into any port or other place in Sri Lanka of any gold intended to be taken out of Sri Lanka without being removed from the vessel or aircraft in which  that gold is being carried shall, for the purpose of this section, be deemed to be the  importation of that gold. 

(3)  In this section, “note” includes part of a note. 

Restriction on export

22.  (1) No person shall, except with the permission of the bank, export from Sri Lanka- 
 
(a)any foreign currency; 
(b)any Treasury Bills; 
(c)any savings certificate expressed in Sri Lanka or any foreign currency;
(d)any gold; 
(e)any of the following documents (including any such document which has been  cancelled):- 

(i)any certificate of title to a security and any coupon; 
(ii)any policy of assurance; 
(iii)any document certifying the destruction, loss or cancellation of any of the documents aforesaid; or 
(g)any such article exported on the person of a traveller or in a traveller’s baggage as may be prescribed. 

(2)  In subsection (1):- 
 “note” includes part of a note; 
“security” includes a secondary security; and 
“coupon” shall be construed in accordance with the meaning of “security”. 

(3)  The Minister may be Order published in the Gazette provide that no goods shall, except with the permission of the bank, be exported from Sri Lanka to any destination specified in the order. 

(4) In granting permission under subsection (3) in respect of the exportation of goods for the purposes of sale, the bank shall satisfy itself- 

(a)  that payment for the goods has been made to a person resident in Sri Lanka by such means and in such manner as may be prescribed in relation to goods of  that class or description exported to the destination, or is to be so made not later than six months after the date of exportation; and 

(b)  that the amount of the payment that has been made or is to be made represents such a return for the goods as is in all the circumstances satisfactory in the national interest: 

Provided that the bank may direct that, in cases to which the direction applies, paragraph (a) of this subsection shall have effect as it for the reference to six months there were substituted a reference to such longer or shorter period as may be specified in the direction, or as if the words “or is to be so made not later than six months after the date of exportation” were omitted. 

(5)  Where, on the authority of permissions granted under subsection (3), a  person is about to export goods from Sri Lanka and the bank has reason to  suspect that any declaration made by that person, in his application for the  permission, as to the ultimate destination of the goods is untrue in any  material particular, the Principal Collector of Customs shall, on the advice of the bank, detain the goods until the bank is satisfied as to the truth of that declaration and, if the bank is not so satisfied, thee goods shall be forfeited and shall be dealt with or disposed of in such manner as the Minister may  direct. 

(6)  Where, at any  time after the grant of permission under subsection (3), the bank has reason to believe that the amount of the payment that has been made or is to be made for the goods to which the permission relates is not in accord  with paragraph (b) of subsection (4), the bank may direct the person holding the shipping documents relating to the goods to retain possession thereof  until such time as the person to whom the permission has been granted has  made arrangements to receive as payment for the goods an amount which, in the opinion of the bank, accords with the aforesaid paragraph (b). 

(8) Any reference in this section to the destination of any goods includes a  reference to the ultimate destination thereof. 

(9)  The preceding provisions of this section shall be in addition to and not in substitution or derogation of the provisions of any other written law prohibiting, restricting or regulating the exportation of goods from Sri Lanka. 

Application of Customs Ordinance and post Office Ordinance

23(1) The Customs Ordinance shall apply in relation to anything the importation or exportation of which into or from Sri Lanka is restricted by any of the provisions of this Part of this Act in like manner as that Ordinance applies in. Relation to articles the importation or exportation of which into or from Sri Lanka is restricted by any enactment; and section 24 of the Post Office Ordinance shall, in relation to any such things as aforesaid have effect as though, for the words “received from beyond seas” and the word “imported” occurring in that section, there were substituted respectively the words “addressed to or received from any place outside Sri Lanka” and the words “imported or exported”. 

(2)  Where anything in relation to which the Custom Ordinance applies by virtue of  subsection (1) is forfeited under that Ordinance, such thing shall, notwithstanding any contrary provision in that Ordinance, be dealt with or disposed of in such manner as the Minister may direct. 

(3)  The importer or exporter of any such forfeited thing as is referred to in subsection (2)may, in accordance with such directions as may be given by the Minister either generally or specially in the circumstances of any particular case, be paid in Sri Lanka currency an amount not exceeding the value in Sri Lanka currency of that thing. 

(4)  Payment to any importer or exporter under subsection (3) shall be made by the  Deputy Secretary to the Treasury or by any officer authorised in that behalf by such Deputy Secretary;  and any money required for any such payment is hereby charged upon the Consolidated Fund. 

(5)  In this section, “importer” and “exporter with  reference to any postal article, mean respectively the addressee and the sender of that article. 

24.  (1) Except with the permission of the bank no person who has a right (whether present or future and whether vested or contingent) to receive any foreign currency or to receive from a person resident outside Sri Lanka a payment in rupees, shall do, or refrain from doing, any act with intent to secure- 

(a)  that the receipt by him of the whole or part of that currency or, as the case may be, of that payment in rupees is delayed, or 

(b)  that the currency or payment ceases, in whole, or in part, to be receivable by him:

Provided that nothing in this subsection shall, unless the bank otherwise directs, impose on any person any obligation in relating to any debt arising in the carrying on of any trade  or business, to procure the payment thereof at an earlier time than is customary in the course of that trade or business. 

(2)  Where a person has contravened the provisions of subsection (1) in relation to any foreign currency or any payment in rupees- 

(a)  the bank may give to him or to any other person in or resident in Sri Lanka who  appears to the bank to be in a position to give effect thereto such directions as appear to the bank to be expedient for the purpose of obtaining or expediting the receipt of  the currency or payment in question and, 

(b)  without prejudice to the preceding provisions of this subsection, the Secretary to the Treasury may direct that there shall be assigned to the Deputy Secretary to the  Treasury the right to receive the currency of payment or enforce any security for the  receipt thereof. 

25(1) Where any statement or declaration has been made under any provision of this  Act that any goods are to be sold outside Sri Lanka, no person who is entitled to sell or procure the sale of those goods shall, except with the permission of the bank, do  or refrain from doing any act with intent to secure- 

(a)  that such sale is delayed to an extent which is unreasonable having regard to the  ordinary course of trade, or 

(b)  that, on such sale, any payment made for the goods is not made in the manner indicated by the statement or declaration. 

(2)  Where any permission or consent has been granted under this Act subject to a  condition providing that, or on the faith of an application stating an intention that, any goods should be imported into Sri Lanka, no person who is entitled to procure  the importation of those goods shall do, or refrain from doing, any act with intent to secure that the importation thereof is delayed to an extent which is unreasonable having regard to the ordinary course of trade. 

(3)  Where in any such case as is specified in subsection (1) or subsection (2)- 

(a)  the goods have not been sold or imported as indicated by the statement, declaration, condition or application within the  time thereby indicated or, if no time thereby indicated or, if no time is thereby indicated, a reasonable time or (in either case) within such further time as may be allowed by the bank, or 

(b)  it appears to the bank that the goods cannot be sold or imported as indicated by the statement, declaration, condition or application, the Secretary to the Treasury may give to any person who appears to him  to be in a position to give effect thereto such directions as appears to him to be expedient as to the manner in which the goods are to be dealt with. 

(4)  Without prejudice to the provisions to subsection (3), the Secretary to the Treasury may in any case to which those provisions apply give directions that the goods shall be assigned to the Deputy Secretary to the Treasury. 

Property obtained by Infringement of Act.

26 (1) Where a person- 
(a)  has made any payment which is prohibited by this Act, or 

(b)  being bound under this Act to offer or cause to be offered any specified foreign exchange to an authorised dealer, has otherwise disposed of that exchange, the Secretary to the Treasury may direct him to sell or procure the sale of any property which he is entitled to sell or of which he is entitled to procure the  sale , being property which represents, whether directly of indirectly, that payment or that specified foreign exchange, as the case may be and may by the same or a subsequent direction specify the manner in which, the persons to whom, and the terms on which the property is to be sold. 

Without prejudice to the provisions of sub-section (1), the Secretary to the Treasury may in any case to which those provisions apply give directions that the property shall be assigned to the Deputy  Secretary to the Treasury. 

Provisions supplemental to proceeding provision of Part. V.

27(1) Where, under the preceding provision of this part of this Act, the Secretary to the Treasury has power to give directions that any right to receive any currency or any payment in rupees or to enforce any security for the receipt  thereof, any goods, or any other property  shall be assigned to the Deputy Secretary to the Treasury, the Secretary to the Treasury shall also have power to direct that the right, goods, or property shall vest in the Deputy Secretary to the Treasury, and in any such case it or they shall vest in the Deputy Secretary to the Treasury free from any mortgage, pledge, or charge, and the Deputy Secretary to the Treasury shall deal with or dispose of it or them in such manner as the Minister may direct.

(2)  Where, in pursuance of directions under the preceding provisions, of this part of this Act, any right, goods, or property is or are assigned to the Deputy Secretary to the Treasury, or  any right, goods, or property vests or vest in the Deputy Secretary to the Treasury in pursuance of directions given under  sub section (1), the Deputy Secretary to the Treasury or any officer authorised in that behalf by such Deputy Secretary shall pay the net sum recovered by the Deputy Secretary to the Treasury in respect of the right goods, or property to the person making the assignment or, in the case of any right, goods, or property vested in the Deputy Secretary to the Treasury under subsection (1), to the person, who, but for the directions, would be entitled to the right, goods or property. 

Transfer of policies of assurance.

28.  (1) Except with the permission of the bank, no person resident in Sri Lanka  shall transfer to a person who is resident outside Sri Lanka or is a nominee for a person resident outside Sri Lanka, any right to the sums assured by any policy of assurance, so, however, that where the person liable for the sum so assured makes any payment thereof to a person resident in Sri Lanka and not elsewhere, or makes with the permission of the bank, any payment thereof to any other person- 

(a)  he shall not be bound to inquire as to the residence of any person other than  the person to whom, and ( if it is not the same person) the person to whose order, the payment is made; and 

(b)  the payment shall, to the extent of the sums paid discharge him from his  liability under the policy, notwithstanding that the payment is made to or to the order of a person who was not entitled thereto otherwise than by virtue of a  transfer prohibited by this subsection. 

(2)  Subsections (2) and (3) of section 18 shall apply in relation to any transfer prohibited by this section as they apply in  relation to a transfer prohibited by  this Act of a security. 

(3)  In this section, “nominee”, in relation to any policy of assurance, has the same meaning as is assigned to it by subsection (3) of section 20 in relation to a security. 

Settlements.

29(1) Except with the permission of the bank, no person resident in Sri Lanka Shall- settle, otherwise than by will, any property upon any trust under which an interest in that property is conferred on a person who, at the time of the settlement, is resident outside Sri Lanka, or 

(b)  exercise, otherwise than by will, any power of appointment (whether created by will or otherwise) in respect of any  property in favour of a person who, at the time of the exercise of such power, is resident outside Sri Lanka. 

(2)  A settlement or an exercise of a power of appointment shall not be invalid  by reason that it is prohibited by this section, except so far as it purports to confer an interest in any property on any person who, at the time of the settlement or the  exercise of the power of appointment, is resident outside Sri Lanka. 

(3)  Subsections  (2) (3) of section 18 shall apply in relation to a settlement or the  exercise of a power of appointment  prohibited by this section as they apply in relation to a transfer prohibited by this Act of a security. 

(4)  For the purposes of this section- 
(a)  any reference to settling property includes a reference to the making of any  disposition, convenant agreement or arrangement whereby the property becomes subject to a trust, or ( in the case of a resettlement) to a different trust. 

(b)  a person shall be deemed to have an interest in property if he has any benefical interest therein, whether present or future and whether vested or contingent, or  falls within a limited class of persons in whose favour  a discretion or power in  respect of the property is exercisable ; and 

(c) the expression “will” includes any testamentary disposition. 

Tourists services, shipping agencies and airlines agencies

29A. No person shall operate or maintain any tourist, airline or shipping service or carry on business as shipping agent or airline agent except in  accordance with such conditions and requirements as may be imposed from  time to time by the bank. 

Prescribed services to be performed in accordance with conditions and requirements imposed by the bank.

29(b) No person in, or resident in, Sri Lanka shall perform any prescribed  service for a person resident outside Sri Lanka except in accordance with such conditions and requirements as may be imposed by the bank by Notification published in the Gazette.

Restriction of appointments of certain companies and firms as agents or technical advisers in Sri Lanka

29c. Notwithstanding anything contained in any other provision of this Act  a company (other than a banking company) which is not incorporated under any law in force in Sri Lanka or which is controlled directly or indirectly by any person or persons resident outside Sri Lanka, or any branch or office of  any such company in Sri Lanka, or a firm consisting wholly or in part of persons resident outside Sri Lanka, shall not accept appointment as- 

(a)  agent in Sri Lanka of any person, company or firm in the trading or commercial transactions thereof: or 

(b)  technical or management adviser in Sri Lanka of any person, company or firm, except with the general or special permission of the bank ; and where such appointment is accepted without such permission, it shall be void. 

Certain provisions relating to foreign companies

30.(1) Where there is served on any person resident in Sri Lanka a notice in  writing that the bank wishes any such requirements as are hereinafter mentioned to be complied with by any foreign company, and that person can 
 by doing or refraining from doing any Act- 

(a)  cause the foreign company to comply with any of the requirements ; or 

(b)  remove any obstacle to the foreign company complying with any of the requirements : or 

(c)  render it in any respect more probable that the foreign company will comply with any of the requirements, then, except so far as permission to the contrary may be given by the bank, that person shall do or, as the case may be, refrain from doing that act.

(2)  The requirements with respect to which a notice under subsection (1) may be given are as follows, that is to say, the foreign company shall- 

(a)  furnish to the bank such particulars relating to the assets and business of such company as may be mentioned in the notice; 

(b)  sell or procure the sale to an authorised dealer of any foreign exchange mentioned in the notice, being foreign exchange  which it is entitled to sell or to which it is entitled to procure the sale; 

(c)  declare and pay such dividends as may be mentioned in the notice; 

(d)  realise any of its assets mentioned in the notice in such manner as may be so mentioned; 

(e)  refrain from selling, or transferring, or doing anything which affects its rights or powers in relation to, any such  instrument or securities as may be mentioned in the notice. 

(3)  Except with the general or special permission of the bank, no person resident in Sri Lanka shall do any act whereby any  business which is controlled by persons resident in Sri Lanka ceases to be so controlled. 

(4)  Notwithstanding anything contained in any other law, no transfer of any interest in any business in Sri Lanka made by a  person resident outside Sri Lanka to any person also resident outside Sri Lanka shall be valid unless such transfer is confirmed by the bank on an application made to it for such confirmation by  the transferor or the transferee.  The preceding provisions of this subsection shall not apply to the transfer of any share in a company. 

(5)  Except with the general or special permission of the bank, no person resident in Sri Lanka shall transfer any interest in any business in Sri Lanka, or create any interest in any such business, to or in favour of a citizen of a foreign State. 

(6)  Except with the general or special permission of the bank, no person resident  in Sri Lanka shall give a guarantee in  respect of any debt or any other obligation or  liability  of a person resident outside Sri Lanka. 

(7)  Except with the general or special permission of the bank, no person resident in Sri Lanka shall lend any money either to any firm or company (other than a banking company) which is controlled directly or indirectly by persons resident outside Sri Lanka. 

(8)  In this section, “foreign company” means a company not incorporated under any law in force in Sri Lanka and in the case of which any of the following  conditions is fulfilled:- 

(a)  that the company is by any means controlled (directly  or indirectly) by any person or persons resident in Sri Lanka; or 

(b)  that more than half of the sums which, on a liquidation thereof, would be receivable by holders of share or loan capital, would be receivable directly or indirectly by, or for the benefit of, persons resident in Sri Lanka; or 

(c) that more than one half of the assets which, on a liquidation thereof, would be available for distribution after the payment of creditors would be receivable directly or indirectly by, or for the benefit of, any person or persons resident in Sri Lanka; or 

(d)  that more than one - half- 

(i)  of the interest payable on its loans and loan capital, if any, or 

(ii)  of the dividends payable on its preference share capital, if any, or 

(iii)  of the dividends payable on it share capital if any not being preference share capital, is receivable directly or indirectly by or for the benefit of , any persons resident in Sri Lanka. 

For the purposes of this subsection, where the identity of the person or persons by whom or for whose benefit , any sum, assets, interest or dividends are directly or indirectly receivable  depends on the exercise by any person resident in Sri Lanka  of a power vested in him in that behalf , the sum, assets, interest or dividends shall be deemed to be receivable directly or indirectly by, or for the benefit of, any person or persons resident in Sri Lanka. 

Blocked accounts

31.  (1) Where any person applies for the permission of the bank for the making of a  Payment, or the placing of any sum, to the credit of any person resident outside Sri Lanka, the bank may direct that the sum payable or to be credited shall be paid or  credited to a blocked account only. Where such direction is given by the bank such person shall pay or credit such sum to a blocked account. 

(2) Where the bank directs that a payment shall be made to a blocked account only- 

(a)  the manner in which the payment may be made shall be either- 

(i)  to the banker, with a direction that the payment shall be credited to a blocked  account of the person to whose credit the  payment is made, which direction may, in the case of a payment by means of a cheque or warrant, be made by marking the cheque or warrant with the words “blocked account of” (naming that person) or words to the same effect, or by a crossed cheque or warrant drawn in favour of that person, marked with the words “payable only to blocked account of payee” or words to the same effect; and 

(b)  the sum collected shall be credited by the banker to a blocked account of that person. 

*(4) Any sum standing to the credit of a blocked account shall not be dealt with  except with permission of the bank. 

(5)  Where a person in whose name a blocked account is standing is declared an insolvent under the law of Sri Lanka or dies, the banker may, notwithstanding anything in subsection (4), transfer the account to the name of the assignee of the  insolvent’s estate or the executor of the last will, or the administrator of the  estate, of the deceased, but, save as aforesaid, no change shall, except with the permission of the bank, be made in the name in which the account stands; and where any such change is made (whether or not the permission of the bank is  necessary therefor) the account shall remain a blocked account notwithstanding the change, and the provisions of this section shall apply accordingly. 

(6)  Where- 
(a)  a sum is due from any person to any other person but the bank directs that it shall be paid or credited to a blocked account only, and 

(b)  the person to whom the sum  is due nominates such an account to the person from whom the sum is due, the last mentioned person shall be under a duty to the person to whom the sum is due to cause the sum to be paid or credited to that blocked account, and the crediting of any sum to a blocked account in pursuance of a direction of the bank shall, to the extent of the sum credited, be a good discharge to the person from whom the sum is due; 

Provided that, in the case of a sum due under a contract, the preceding provisions of  this subsection shall not apply in so far as the application of those provisions in  inconsistent with the intention of the parties to that contract. 

(7)  In this section- 
“blocked account” means an account opened as a blocked account at an office or branch in Sri Lanka in favour of any person by a banker authorised by the bank to open blocked accounts, and 

“banker” in relation to any person , means a banker who opens a blocked account in favour of that person. 

32 (1) The Minister may by Order published in the Gazette provide that, for such of  the purposes of this Act as may be specified in the Order- 

(a)  any transaction with or by a branch of any business  whether carried on by a body corporate or otherwise, shall be treated in all respects as if the branch were a body corporate resident where the branch is situated, and 

(b)  the making of any book entry or other statement recording a debit against a branch of any business in favour of any other branch of that business, shall be treated as a  payment to that other branch, and 

(c)  any property held by or on behalf of any person carrying on any business  shall be deemed to be held by such of the branches of that business as may be determined in  accordance with the Order; and any such Order which makes, for any of the purposes of Part III of this Act, such provision as is mentioned in paragraph (c) of this subsection may contain provisions declaring the circumstances in which in branch is to be treated as nominee for any other branch. 

(2)  Any reference in subsection (1) to a branch of business shall be deemed to include a reference to the head office of that business. 

(3)  Subsections (1) and (2) shall apply in relation to any body of persons (whether  corporate or unincorporate) carrying on any activity, whether for the purpose of  profit or not, as they apply in relation to a business. 

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