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US cautions China-backed Port City could turn into money-laundering haven

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(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.

 

 



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New Constitution to decide fate of executive presidency, PCs: NPP

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By PRIYAN DE SILVA

The government’s position on the abolition of the Executive Presidency and the future of the Provincial Council system will be set out in a new Constitution, NPP General Secretary Dr. Nihal Abeysinghe has said.

Abeysinghe made the remarks when a delegation from the Campaign for Free and Fair Elections (CaFFE) met him at the NPP headquarters in Pelawatte on Friday evening. Former NPP General Secretary and MP Laxman Nipunarachchi also participated in the discussion.

Dr. Abeysinghe said the JVP, the main constituent of the NPP, had consistently advocated the abolition of the Executive Presidency and that it was also a key pledge in the NPP election manifesto.

Responding to calls for the Provincial Council elections to be held under the existing electoral system, Nipunarachchi said the system was being changed to introduce the new electoral system.

He stressed that conducting the elections under the old system was therefore not acceptable.

CaFFE Executive Director Manas Makeen suggested that the Election Commission should be vested with adequate financial authority to ensure that elections are held on time.

Dr. Abeysinghe also requested CaFFE and other stakeholders to submit any proposals for constitutional amendments for consideration.

The NPP made the abolition of Sri Lanka’s executive presidency and the adoption of a new Constitution a central constitutional pledge in its 2024 presidential election manifesto, A Thriving Nation, A Beautiful Life. It promised to draft and enact a new Constitution after public discussion and a referendum, abolish the executive presidency and replace it with a president without executive powers elected by Parliament, while introducing a new parliamentary electoral system.

However, in June 2026, Public Administration Minister Chandana Abayaratne was quoted by the media as having said that although this remained an electoral promise, the Government did not regard it as a priority at that point, saying other constitutional and electoral reforms were being considered first.

The Opposition has accused the goverment of trying to retain the executive presidency by delaying the constitution making project.

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NBRI issues landslide warning for three districts

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By Chaminda Silva

The National Building Research Institute (NBRI) has issued a Level 3 (Red) landslide early warning for several areas in the Kandy, Kegalle and Nuwara Eliya districts amidst continuing heavy rainfall.

The warning, issued at 2 p.m. yesterday (20), will remain in effect until 2 p.m. today (21).

In Kandy District, the red alert covers the Pasbage Korale Divisional Secretariat Division and surrounding areas.

In Kegalle District, red-level warnings have been issued for the Dehiowita, Aranayake, Deraniyagala, Mawanella and Yatiyanthota Divisional Secretariat divisions and surrounding areas.

In Nuwara Eliya District, the warning covers the Kothmale West, Kothmale East, Ambagamuwa and Norwood Divisional Secretariat divisions and surrounding areas.

Meanwhile, a Level 2 (Amber) landslide warning remains in effect for selected areas of Colombo, Galle, Kalutara, Kandy, Kegalle, Matara, Nuwara Eliya and Ratnapura districts.

The affected areas include Padukka; Nagoda, Thawalama and Neluwa; Bulathsinhala, Palindanuwara, Walallawita and Agalawatta; Ganga Ihala Korale; Bulathkohupitiya and Kegalle; Akuressa and Pitabeddara; Thalawakele; and several Divisional Secretariat divisions in Ratnapura District, including Pelmadulla, Ratnapura, Ayagama and Kuruwita.

Residents in the affected areas have been urged to remain vigilant for signs of landslides and follow instructions issued by local authorities, particularly during periods of heavy rainfall.

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Mahaweli rises as heavy rain triggers flood, landslide fears

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By SK Samaranayake

Heavy rainfall across the Central Highlands has triggered flood and landslide warnings, with the Mahaweli Ganga reaching spill level in Nawalapitiya and several roads and low-lying areas already affected.

The Kandy District Disaster Management Unit has urged residents living along the Mahaweli River in Nawalapitiya, Gampola, Gelioya and Peradeniya to remain on high alert as heavy rain continues on the western slopes of the Central Hills.

The Irrigation Department has warned that the Mahaweli Ganga, in the Nawalapitiya area, is nearing spill level. The river level at the Peradeniya Black Bridge, which is under repair, is also continuing to rise.

A senior official said the University of Peradeniya was taking precautionary measures in anticipation of a possible flood situation.

Meanwhile, five spill gates of the Polgolla Mahaweli Reservoir had also been opened yesterday (20) due to the heavy rainfall, Executive Engineer Thisara Bandara said.

Around 21,000 cubic feet of water per second is being released towards the Victoria Reservoir through the five gates.

Bandara warned that all spill gates may have to be opened if rainfall intensifies and urged communities downstream of the Polgolla Dam, on both sides of the river, to remain vigilant.

The threat has already translated into flooding and displacement in several areas.

Nearly 100 families have been displaced in the Pasbage Korale Divisional Secretariat area of Nawalapitiya after the Mahaweli River overflowed and inundated homes in low-lying areas, following heavy rainfall since yesterday (20), a Divisional Secretariat official said.

Kithulkote, Labuwelkotuwa and Jayasundara Ovita were among the areas affected.

The Irrigation Department has separately warned of a risk of major flooding in low-lying areas along the Mahaweli River in the Pasbage Korale area, urging residents and motorists to exercise extreme caution.

Meanwhile, roads have also been hit by the adverse weather.

The Road Development Authority (RDA) has closed the Poojapitiya–Medawela road until further notice after a section of the road at Madadeniya collapsed. The section had reportedly already been weakened during the Ditwah disaster and has now completely given way.

The RDA has closed the road from Poojapitiya town and advised motorists travelling towards Medawela to use alternative routes.

Traffic on the Hatton–Bogawantalawa–Maskeliya–Balangoda main road also came to a complete standstill yesterday after a landslide occurred near the Wanraraja Estate area in Dikoya at around 11 a.m.

Hatton Police officers and residents began clearing the earth from the road, while the local RDA office was informed to assist with the operation.

In another warning, the Disaster Management Centre (DMC) said a potentially dangerous situation had developed at Dabagolla Mountain in Yalagamuwa, Uvaparanagama.

Police said about 700 metres of the mountain had developed cracks measuring between 10 and 12 inches wide. In some locations, the ground had subsided to depths of seven to eight feet.

The DMC said the cracks had widened with the recent rainfall, while water flowing through them had begun loosening the soil and increasing the risk of a landslide.

Police said there were no houses or settlements around the affected mountain, which is located near a forest reserve. Several acres of pepper cultivation are, however, situated in the vicinity.

Meanwhile, heavy rain has also caused flooding in Bogawantalawa.

Several buildings in the low-lying section of Merys Estate National School have been inundated after the Keselgamu Oya, a major tributary feeding the Castlereigh Reservoir, overflowed.

A retaining wall above a house in the lower section of Kotiyagala Estate also collapsed amid the heavy rainfall, causing extensive damage to the house. Bogawantalawa Police said no one inside was injured.

Authorities have urged residents in flood-prone and landslide-prone areas to remain alert as further rainfall could worsen conditions, while motorists have been advised to avoid affected roads and use alternative routes where possible.

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