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US cautions China-backed Port City could turn into money-laundering haven
(ANI) US Ambassador to Sri Lanka and Maldives, Alaina Teplitz on Saturday warned Sri Lanka of unintended consequences of ‘nefarious actors’ who may try to misuse a China-backed Colombo Port City’s easy business rules as a permissive money laundering haven amid concerns of tax leaks.
Sri Lanka has unveiled draft legislation for a Colombo Port City Commission which allows for sweeping tax breaks, tax-free salaries and to be an offshore financial centre.
“Any legislation relating to the port city has to be considered very carefully for its economic impact,” Teplitz told reporters in Colombo in an online discussion.
“And of course among those un-intended consequences could be creating a haven for money launderers and other sorts of nefarious actors to take advantage of what was perceived as a permissive business environment for activities that would actually be illegal.”
The agency running the Port City would have extensive powers to exempt businesses from taxes of up to 40 years, though it is not a tax haven in the traditional sense.
Sri Lanka’s tax revenues have plunged in 2020, raising concerns over debt and the fiscal path, credit downgrades and the ability of the government to provide vital public services to the people, while managing loss-making state enterprises.
“I do recognize that the government of Sri Lanka wants to take advantage of the investment that has already been made in creating the Port City foundation, but the legislation really needs to be reflected to address these challenges and to be careful of what it might be to open doors to bad practice and unfair competition for the rest of the country,” said Teplitz.
Teplitz said an idea by US Treasury Secretary Janet Yellen to have a global single corporate tax was just a proposal with no immediate impact but Sri Lanka should think about tax concessions in its own interests.
Sri Lanka is under the worst import controls since the 1970s using the 1969 law, though exchange controls are less draconian.
Sri Lanka’s economy was progressively closed with an import control law being enacted in 1969 as money printing pressured the rupee, which worsened after the break-up of the Bretton Woods in 1971, as then-Federal Reserve Chief Arthur Burns printed money to target an output gap, forcing dollar to be floated.
Sri Lanka’s attempts at creating numbered accounts as part of creating Non-resident foreign currency accounts, after re-opening the economy in 1978 was also resisted by Western nations.
Citizens are also allowed to hold up to 15,000 US dollars as well as unlimited amounts in dollar accounts outside to protect their savings from monetary expropriation, in relaxation of legal tender laws.
News
Opposition tells Minister Kumara Jayakody to resign
No-faith motion to be taken up today
Former Foreign Minister Prof. G. L. Peiris yesterday (9) said that President Anura Kumara Dissanayake should remove Energy Minister Kumara Jayakody unless the minister stepped down on his own.Prof. Peiris, addressing a press conference called by the Opposition, said that Jayakody couldn’t under any circumstance continue to serve as a minister after the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) moved the Colombo High Court against the government member over a previous financial scandal.
Pointing out that Minister Jayakody had been indicted of a corrupt deal struck during the yahapalana regime, Prof. Peiris said it was wrong for the NPP to retain him as a minister, claiming that the offence was not committed during his tenure as a Cabinet minister in the current government.
Prof. Peiris and several other Opposition members dealt with the No-Confidence Motion (NCM) against Jayakody that would be taken up today (10) with the academic calling the vote an acid test for the NPP. Having campaigned on an anti-corruption platform at presidential and parliamentary polls, the NPP couldn’t protect Jayakody though he was widely believed to be close to President Dissanayake.
As the Manager of the Procurement and Import Division of the Ceylon Fertilizer Company, Jayakody is alleged to have committed the offence of corruption, according to CIABOC.
Jayakody has been accused of causing a loss of Rs. 8,859,708 to the State by influencing and exploiting the procurement process.
Following the serving of indictments on 27 March, the judge ordered Jayakody’s release on two personal bail bonds of Rs. 1 million each. The court directed that the defendant’s fingerprints be obtained and a formal report be submitted. The case has been scheduled for a pre-trial conference on 6 May.
Prof. Peiris stressed that the CIABOC action against Jayakody is central to the NCM primarily moved over the irregularities ridden coal procurement process launched in 2025 that caused severe disruption to the power generation. Responding to The Island query after the media briefing, Prof Peiris expressed surprise that the JVP/NPP accommodated a person under investigation by the CIABOC. Having taken an utterly irresponsible decision, the JVP/NPP were now playing down the developing issue, prof. Peiris said.
The entire government parliamentary group faced the prospect of having its image tarnished by defending Jayakody, the former lawmaker said.
Prof. Peiris said that they intended to build a campaign around the issues involving the energy minister to expose the government. With yet another electricity tariff hike in the offing due to the growing demand for thermal generation as a result of coal-fired Lakvijaya power plant’s failure to meet the requirement[RA1] , the energy minister and ministry’s performances have to be examined, Prof. Peiris said.The timely release of the Auditor General’s report on controversial coal procurement should compel the government to decide on the energy minister’s fate or be prepared to face the fallout.
By Shamindra Ferdinando
News
Coal tender scandal: FSP to move court against illegal deals
The Frontline Socialist Party (FSP) has alleged that two recent coal tenders awarded for 2026 are illegal, citing irregularities in both the long-term and emergency local agreements.
Speaking at a press conference at the party headquarters in Nugegoda yesterday, Pubudu Jagoda, Educational Secretary of the FSP, said the long-term tender for 25 coal shipments awarded to Trident Chemphar Company, as well as the emergency local tender for five shipments awarded to Tarangot Resources Company in case Trident Chemphar failed to deliver, were both unlawful.
Jayagoda said that a report released by the National Audit Office, on April 2, 2026, had confirmed the irregularities in the Trident Chemphar award.
Jayagoda said that according to the country’s law, tender documents should be sent only to registered companies. While Trident Chemphar failed to deliver, applied for registration on August 19, 2025, it had received the tender documents via email earlier on August 18, making the process illegal. He also noted that the tender agreement had been signed on November 19, 2025, before the Attorney General’s approval was granted the following day, and therefore that agreement was legally invalid.
Regarding Tarangot Resources, Jagoda said the company did not meet the minimum qualifications for the emergency tender, which required prior experience in trading at least one million tonnes of high-calorific coal within 36 months. The company had not sold any coal to meet those standards, Jayagoda said.
The FSP also raised questions about the involvement of Dhammika Perera and his company in the transactions. It said announced that it intended to take both tenders to court, seeking a legal declaration of their invalidity and an order to prevent the costs from being passed on to electricity consumers.
News
Govt. determined to bring GMOA to heel
Docs resume trade union action
Health and Mass Media Minister Nalinda Jayatissa told Parliament yesterday that the government was prepared to face any situation arising from the ongoing strike launched by the Government Medical Officers’ Association (GMOA).
Addressing the House, the Minister announced that the government would not proceed with a meeting scheduled for April 9 with the GMOA, following the union’s decision to launch a 48-hour strike. He said he had earlier agreed to hold discussions on other matters, but not on the appointments of newly qualified doctors.
Jayatissa stressed that trade unions had no role in decisions related to the appointment of doctors who have completed their internship training, noting that such authority rested solely with the relevant institutions. He acknowledged that unions were typically consulted on mid-career transfers, but the current dispute concerned first appointments, which were the GMOA’s scope.
Describing the strike as “unjustified” and “unfair,” the Minister alleged that it was being driven by a small group with political motives. He also claimed that attempts had been made to intimidate doctors in Colombo against accepting their appointments.
According to the Minister, 96% of newly qualified doctors had rejected the GMOA’s directive and reported for duty. Of 453 eligible doctors, 436 had applied by April 4 to accept appointments, while most of the remainder had not completed internship requirements.
He urged newly appointed medical officers to continue reporting to work without fear, assuring them of police protection if necessary.
Jayatissa further said that any concerns regarding alleged irregularities in appointments should be addressed through legal channels, adding that the judiciary is the appropriate forum for such disputes.The GMOA has launched a 48-hour strike in protest against the minister’s action.
By Saman Indrajith
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