Apparel sector wants Central Bank to show receipts

CB regulations say that there is a mandatory requirement to convert export proceeds within 180 days.

Apparel exporters are up in arms over the recent statement made by the Central Bank (CB) Governor Dr. Nandalal Weerasinghe warning to name and shame exporters who don’t convert exports proceeds.

After the apex body of the industry, the Joint Apparel Association Forum (JAAF), during an informal discussion with CB officials, challenging the banking regulator, to show receipts of them not adhering to the relevant rules, a meeting between the two parties was scheduled on Thursday but was subsequently postponed.

Speaking at the Sri Lanka Apparel Exporters’ Association Annual General Meeting held last week, Dr. Weerasinghe said the apparel sector dollar conversions stood depressingly low at 14 per cent, in spite of their statements of a 55 per cent value addition.

CB regulations say that there is a mandatory requirement to convert export proceeds within 180 days. The CB has stepped up its compliance monitoring with the relevant conversion-related requirements through authorised dealers. Dr. Weerasinghe was vocal about the lack of clear response received from some exporters to a survey questionnaire, aimed at ascertaining how much is converted.

Amidst the country struggling to retain dollars, he pointed out the importance of exporters revealing their spending on dollar incomes, for instance for loan servicing, fuel or other raw material imports.

Angry apparel exporters point out that the authorities are not dealing with payment hawkertype customers, but top customers. They also say that the offshore companies that they own which the naysayers say are used to divert part of the export proceeds, are registered under the Board of Investment.

“We sell to big buyers. For an example, if a top buyer is allegedly buying at US$10 and we invoice it at $8, the customs duty is charged in the US currency at this $8. This would be a crime and these buyers will not risk such things,” an apparel exporter told the Business Times on Thursday.