Aligning with global best practices requires Sri Lanka to embrace independent and impartial reviews where necessary

Sri Lanka Customs plays a vital role in safeguarding the national economy, both through its regulatory responsibilities and revenue collection functions. As the country’s border control authority, the Department is tasked with facilitating legitimate trade while preventing illegal activities such as smuggling and other forms of illicit cross-border movement.

As a regulatory body, Customs must also remain accountable for the actions it takes. In fulfilling its mandate, Sri Lanka Customs—similar to Customs administrations worldwide—may be required to initiate investigations that lead to formal inquiries. These investigations are conducted in line with globally accepted standards and procedures, reflecting the Department’s role in international law enforcement and its responsibility to uphold transparent, fair, and consistent practices.

Customs investigations are typically initiated upon detecting irregularities such as misdeclaration, undervaluation, or violations related to imports and exports. At present, the full inquiry process is carried out internally within the institution, without the requirement to seek an independent review. This internal structure means that matters involving external parties are handled without impartial or third-party oversight.

Although the goods or interests under inquiry often belong to private entities, decisions are made exclusively by the officials, which can give rise to concerns regarding transparency and potential conflicts of interest. A comparable investigative approach is also followed by other regulatory bodies in Sri Lanka.

Global norms

Internationally, administrative bodies engaged in decision-making are expected to uphold principles of fairness and impartiality. Accordingly, processes must adhere to key standards such as impartial decision-making, the right to be heard, transparency, access to review mechanisms, and overall procedural fairness.

In line with these norms, the World Customs Organization—through Chapter 10 of the General Annex to the Revised Kyoto Convention (RKC), the global framework for simplifying and harmonizing customs procedures—emphasises that decisions affecting traders or individuals must be subject to review. Likewise, the Trade Facilitation Agreement of the World Trade Organization (WTO), in Article 4, requires member states to ensure that importers and exporters have access to mechanisms for review or appeal of customs decisions.

The United Nations Conference on Trade and Development (UNCTAD) also highlights that fair administrative procedures are essential to preserving public trust and ensuring compliance within customs operations. Similarly, the OECD Recommendation on Regulatory Policy and Governance (2012) underscores the need for administrative bodies to maintain accountability, transparency, and procedural fairness in enforcement and adjudication processes.

Global best practices

International practice has moved toward transparent, multi-stage dispute-resolution frameworks, ensuring that decisions can be reviewed independently. This shift has created an opportunity for Customs administrations worldwide to incorporate impartial review mechanisms outside their internal structures.

In the United Kingdom, functions are distinctly separated: tax collection and border control are handled by different institutions, and appeals are adjudicated by an independent lower-level tribunal. Decisions of this tribunal may then be appealed to the Upper Tribunal and subsequently through the regular court hierarchy.

In India, review and appeal functions are assigned to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), a statutory quasi-judicial body established under the Customs Act to adjudicate complex customs and tax disputes.

Similarly, Thailand has adopted a structured, tiered review system. Disputes undergo initial internal review by subject-matter experts, after which appeals may be taken to the national judiciary. Higher-level appeals are handled by the Customs Board of Appeals, which includes external experts, ensuring an additional layer of independent oversight.

To strengthen fairness and accountability

The international examples above demonstrate the value of clearly separating investigative, decision-making, and review functions. Such structures reinforce impartiality, enhance accountability, and strengthen public confidence in the inquiry process. These models reflect globally recognised best practices that promote transparency and fairness in customs administration.

Sri Lanka’s current framework primarily operates through an internal review process. In addition to the above, introducing an external, independent review mechanism—aligned with international standards—would further strengthen trust, impartiality, and institutional accountability. As a border control authority and a key regulator of import and export activity engaged in global trade systems, adopting internationally practised adjudication approaches would enhance the credibility and reliability of Sri Lanka Customs at every level of operation.

By Nadeeka Dissanayake