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ECONOMYNEXT – Sovereign debt defaulted Sri Lanka is in the process of passing key laws including Port City legislation and Proceeds of Crimes which includes provision for recovery of stolen assets, Justice Minister Wijeyadasa Rajapakshe said.
The island nation is in a recovery path with International Monetary Fund-led economic and fiscal reforms, but it has so far failed to instill investor confidence to attract significant foreign inflows.
Many foreign investors in the past have complained about rigid laws that have dragged businesses and dented their confidence in the country.
President Ranil Wickremesinghe’s government has planned to bring in new laws in line with the IMF economic reforms.
Justice Minister said some of those laws are “almost” drafted now.
“There will be a new law for Colombo Port City,” Rajapakshe told reporters at a media briefing in Colombo on Monday (25).
“This will be introduced within the next two months,” he told separately to EconomyNext when asked about the Port City law.
The Chinese-owned and built Port City has delayed some of the key investments due to delays in the governing laws.
“Instead of BOI (Board of |Investment), there will be a new law. That has been undertaken by the Ministry of Finance with the team of experts and they are attending,” he said.
LAW TO RECOVER HIDDEN WEALTH
“We are going to introduce very soon the Proceeds of Crimes Act and Insolvency Act. Almost drafts are completed,” the Justice Minister said.
The Proceeds of Crime is related to recovery of stolen assets, which was demanded by thousands of protesters who through mass demonstration ousted former president Gotabaya Rajapaksa in July 2022.
Many Sri Lankans believe some of the former rulers have kept stolen money they received and earned from corrupt practices in other countries and the Proceeds of Crimes Act is seen as a way to recover such ill-gotten wealth hidden in other countries.
“In fact, there are certain provisions in the Anti-Corruption law too to recover such assets even if they are in overseas,” Rajapakshe said.
“The court has been given that power and jurisdiction. But here separately we are addressing on it specially to recover stolen assets or whatever they have got through corruptions and bribery.”
Sri Lanka’s current Insolvency Ordinance is considered insufficient to meet the current needs.
According to a World Bank report, Sri Lanka’s current insolvency legal regime remains weak in keeping up with modern times, particular in the absence of restructuring laws.
The new Insolvency Act is expected to address the flaws in the current laws. (Colombo/March 25/2024)
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