Last Updated: Monday November 10, 2008
The
Exchange Control Act (
AN ACT TO MAKE PROVISION
CONFERRING POWERS, AND IMPOSING DUTIES AND RESTRUCTIONS, IN RELATION TO GOLD,
CURRENCY, PAYMENTS, SECURITIES, DEBTS, AND THE IMPORT, EXPORT, TRANSFER AND
SETTLEMENTS OF PROPERTY, TO AUTHORISE THE CENTRAL BANK TO ADMINISTER THE
PROVISIONS AFORESAID AND TO PROVIDE FOR MATTERS CONNECTED THEREWITH.
(Act No. 24 of 1953 - 15th
August, 1953)
(Act No. 35 of 1956 - 1st
September, 1956)
(Act No. 47 of 1957 - 25th
October, 1957)
(Act No. 17 of 1971 - 24th
March, 1971)
(Law No. 14 of 1972 - 13th
December, 1972)
(Law No. 39 of 1973 - 1st
October, 1973)
(Law No. 4 of 1977 - 27th
October, 1977)
(Law No. 13 of 1977- 8th
February,1977)
Short Title.
1. This Act may be cited as the Exchange Control Act.
Administration of Act by Central Bank
1. (1) The Central Bank of Sri Lanka shall, as agent of the
Government, be responsible for carrying out the provisions of this Act, and it
shall be the duty of the Monetary Board to cause those provisions to be carried
out in accordance with such directions as may from time to time be issued in
that behalf by the Minister.
(2) The Monetary Board shall establish for the
purposes of this Act a Department of Exchange Control of the Central Bank
to which the Board shall have the power to appoint or assign such
officers and servants as the board may consider necessary for the purpose of
carrying out the provision of this Act: every such officer or servant shall,
for the purpose of the application of the provisions of the Monetary Law Act
relating to officers and servants, be deemed to be employed for the performance
of duties under that Act.
Exercise of powers & co., under the Act.
3. Whenever by any provision of this Act any power,
duty or function is authorised or required to be exercised or performed
by the bank, such power duty or Function shall be exercised or performed,
subject to the direction and control of the Governor of the bank, by the
officer designated as the head of the Department of Exchange Control or on his
behalf by any other officer designated as an assistant to him;
Provided, however, that any permission, which by any such
provision is authorised to be granted by the bank, may be granted on behalf of
the head of the department by an authorised dealer, if he is for the time being
empowered, by directions issued by the head of the department, to grant such
permission.
Any directions given by the head of the department under this
section may specify the circumstances in which and the conditions and
restrictions subject to which an authorised dealer may grant the permission to
which the directions relate.
PART I
GOLD AND FOREIGN CURRENCY
Authorised Dealers in gold or foreign currency.
4. The Minister may authorize any commercial
bank to act for the purposes of this Act as an authorised dealer in relation to
gold or any foreign currency.
Dealings in foreign currency
5. (1) Except with the permission of the bank - gold
and
(a) no person, other than an authorised dealer, shall in
Sri Lanka buy, borrow or accept any gold or foreign currency from, or sell or
lend any gold or foreign currency to, or exchange any foreign currency with,
any person other than an authorised dealer, and
(b) no person resident in Sri Lanka, other than an
authorised dealer, shall outside Sri Lanka, buy or borrow any gold or
foreign currency from, or sell or lend any gold or foreign currency
to, any person other than an authorised dealer;
Provided that the preceding provisions of this subsection
shall not prohibit the sale and purchase at any post office in
(2) Except with the previous general or special permission
of the bank, no person, whether an authorised dealer or not, shall enter into
any transaction which involves the conversion of Sri Lanka currency into
foreign currency or foreign currency into Sri Lanka currency at rates of
exchange other than the rates for the time being authorised by subsection (3)
of section 76 of the Monetary Law Act.
Surrender of gold and of specified Foreign exchange
6. (1) The foreign exchange to which this section
applies is such foreign exchange (hereinafter in this Act referred to as the
“specified foreign exchange’) as may be prescribed.
(2) The bank may require any person in, or resident in,
(a) Who owns or holds any specified foreign exchange
to offer it or cause it to be offered for sale to an authorised dealer at
a price determined by the Monetary Board, or
(b) Who is entitled to assign any right to receive
any specified foreign exchange to transfer such right to the Deputy Secretary
to the Treasury on payment of such consideration as the Monetary Board may
fix,
unless the bank consents to his retention and use of such
foreign exchange or he disposes of such foreign exchange to any person with the
permission of the bank.
(3) If a person who has obtained the consent of
the bank to his retention and use of any gold or any specified foreign exchange
and has stated in an application for the consent that he requires it for a
particular purpose, no longer requires that gold or exchange for that
purpose, subsection (2) shall thereupon apply to him in relation to that gold
or exchange as if t he bank had revoked the consent.
(4) A person who acquires any gold or any specified foreign
exchange from an authorised dealer shall be treated for the purposes of this
section as if the bank had consented to the retention and use by him of that
gold or exchange, and as if any statement made by him in an application for
that gold or exchange as to the purpose for which he requires it has been made
by him in an application for the consent of the bank to his retention and use
thereof.
(5) Where a person has become bound under this section to
offer or cause to be offered any gold or any specified foreign exchange for
sale to an authorised dealer he shall not deemed to comply with that obligation
by any offer made or caused to be made by him if the offer is an offer to sell
at a price exceeding that authorised by the Monetary Board or without payment
of any usual and proper charges of the authorised dealer, or otherwise an any
unusual terms.
(6) Where a person has become bound under this
section to offer or cause to be offered any gold or any specified foreign
exchange for sale to an authorised dealer and has not compkied with that
obligation, the Secretary to the Treasury may direct that, that gold or
exchange shall vest in the Deputy Secretary to the Treasury, and where the
Secretary to the Treasury so directs, it shall vest in the Deputy
Secretary to the Treasury free from any mortgage, pledge, or
charge, and the Deputy Secretary to the Treasury shall deal with or dispose of
it in such manner as the Minister may direct, but the Deputy Secretary to the
Treasury or any officer authorised in that behalf by such Deputy Secretary
shall pay to that person such sum as he would have received for that gold or
exchange if he had sold it to an authorised dealer in pursuance of an offer
made under this section at the time when the vesting occurred. Any money
required for any payment under this subsection is hereby charged upon the
consolidated fund.
(7) In any proceedings in respect of a failure to
comply with the provisions of this section, it shall be presumed,
until the contrary is proved, that the gold or exchange in question has not
been offered for sale to an authorised dealer.
Possession of Foreign currency
6A. Except with the permission of the bank, no person shall
have in his possession any foreign currency.
Part 1A
CONTROL OF FOREIGN ASSETS
Accounts in foreign banks
6AA (1) No person in, or resident in Sri Lanka shall,
except with the permission of the bank,-
(a) open an account with any bank of institution doing any kind of
banking business outside Sri Lanka (hereinafter referred to as a “foreign
bank”);
(b) continue to maintain, or operate on, an account
which has already been opened in any foreign bank ; or
(c) close an account with any foreign bank.
(2) Where an account maintained by a person in, or
resident in, Sri Lanka with any foreign bank is closed, such person shall not
dispose of the funds to his credit at such foreign bank at the time of closing
of such account, except in accordance with such directions as may from time to
time be given to him by the Central Bank.
Foreign assets.
6AB Every person in, or resident in,
(a) shall within one month of the commencement of
this Act or the acquisition of the assets, as the case may be, render to the
bank a return in such manner and giving such particulars with respect to the
assets as may be prescribed; and
(b) shall not dispose of such assets or part thereof
in any manner whatsoever except in accordance with such directions as may be
given to him by the bank.
PART II
PAYMENTS
Payments in
7. Except with the permission of the bank no person
shall in
(a) make any payment to or for the credit of a person
resident outside Sri Lanka, or
(b) make any payment to or for the credit of a person resident in Sri
Lanka by order or on behalf of a person resident outside Sri Lanka, or
(c) place or hold any sum to the credit of any person resident outside
Sri Lanka:
Provided that where a person resident outside
Payments outside
8 (1) Except with the permission of the bank, no person
resident in Sri Lanka shall, subject to the provisions of this section,
make any payment outside Sri Lanka to or. for the credit of a person resident
outside
(2) Nothing in this section shall prohibit the doing
of anything otherwise lawful by any person with any foreign currency
obtained by him in accordance with the provisions of Part I of this Act
or retained by him with the consent of the bank.
Compensation deals.
9. (1) Except with the permission of the bank no person
shall in Sri Lanka, and no Person resident in Sri Lanka shall outside Sri
Lanka, make any payment to or for the credit of a person resident in Sri Lanka
as consideration for or in association with-
(a) the receipt by any person of a payment made
outside
(b) the transfer to any person, or the creation in
favour of any person, of a right (whether present or future, and whether vested
or contingent) to receive a payment outside
(2) Nothing in this section shall prohibit the making
of any payment in accordance with the terms of a permission or consent granted
under this Act.
Part III
SECURITIES
Issue of securities
10.(1) Except with the permission of the bank, no person
shall in Sri Lanka issue any security or, whether in Sri Lanka or
elsewhere, issue any security which is registered or to be registered in Sri
Lanka, unless the following requirements are fulfilled:-
(a) neither the person to whom the security is to be
issued nor the person, if any, for whom he is to be a nominee is resident
outside
(b) the prescribed evidence is produced to the person
issuing the security as to the residence of the person to whom it is to
be issued and that of the person, if any, for whom he is to be a nominee.
(2) The subscription of the memorandum of association
of a company to be formed under the companies Act by a person resident outside
Sri Lanka, or by a nominee for another person so resident, shall unless he
subscribes the memorandum with the permission of the bank, be invalid in so far
as it would on registration of the memorandum have the effect of making him a
member of the company, so, however, that this subsection shall not render
invalid the incorporation of the company, and if by virtue of this
subsection the number of the subscribers of the memorandum who on its
registration become members of the company is less than the minimum required to
subscribe the memorandum, the provisions of the said Act relating to the
carrying on of business if a company the number of whose members is reduced
below the legal minimum shall apply to the company as if the number of
its members had been so reduced.
Transfer of securities Coupons.
11. (1) No person shall, except with permission
granted by the bank, transfer any security, either on his own behalf or
on behalf of any other person, unless- and
(a) the holder of the security and, if the holder is a nominee, the
person for whom he is acting as nominee, are resident in Sri Lanka; and
(b) the transferor has produced to the person to whom
the security is to be transferred or his agent such evidence of the facts
aforesaid as may be prescribed,
and no person shall, except with such permission as
aforesaid , acquire any security, either on his own behalf or on behalf of any
other person, unless such evidence as aforesaid has been produced to him or to
his agent.
(2) No person shall, except with permission granted
by the bank-
(a) transfer any registered security, either on his
own behalf or on behalf of any other person, to any person resident outside Sri
Lanka or to any person acting as the nominee of any person so resident, or
(b) transfer any bearer security, either on his own
behalf or on behalf of any other person, unless the bank is satisfied that the
person to whom the security is to be transferred and, if that person is a
nominee, the person for whom he is to act as nominee, are resident in Sri
Lanka.
(3) Except with the permission of the bank, no coupon
shall be transferred-
(a) in
(b) outside
Issue of bearer Certificates and coupons.
12. Except with the permission of the bank, no person
shall, in
Substitution of securities and certificates outside Sri
Lanka
13 Except with the permission of the bank, no person in or
resident in
(a) that a security which is-
(i) registered in
(ii) transferable by means of a bearer certificate in
Sri Lanka, becomes, or is replaced by, a
security registered outside Sri Lanka or a security transferable by means
of a bearer certificate outside Sri Lanka, or
(b) that, in substitution for or in addition to any
such certificate of title to the first mentioned security as is in, or is or
has been lost or destroyed in, Sri Lanka, a certificate of title to any other
security is issued outside Sri Lanka.
Payment of Capital moneys outside Sri Lanka
14. Except with the permission of the bank, no person
resident in
Duties of persons keeping registers
15. Except with the permission of the bank, no person
concerned with the keeping of any register in
(a) enter in the register the name of any person in
relation to any security unless there has been produced to him the prescribed
evidence that the entry does not form part of a transaction which
involves the doing of anything prohibited by this Act, or
(b) enter in the register, in respect of any security,
an address outside Sri Lanka, except for the purpose of any transaction
for which the permission of the bank has been granted with the knowledge that
it involves the entry of that address, or
(c) do any such act in relation to the register as recognizes
or gives effect to any act appearing to him to have been done with the intent
mentioned in section 13 or section 14, whether done by a person in or resident
in Sri Lanka or not.
Additional provisions as to nominee holdings
16. (1) Where the holder of a security is a nominee,
then except with the permission of the bank, neither he, if he is
resident in Sri Lanka, nor any person resident in Sri Lanka through whose
agency the exercise of all or any of the holder’s rights in respect of
the security is controlled, shall-
(a) do any act whereby he recognizes or gives effect
to the aubstitution of another person as the person from whom he directly
receives his instructions unless both the persons previously
instructing him and the person substituted for the person were, immediately
before the substitution, resident in Sri Lanka and not elsewhere, or
(b) do any act whereby he ceases to be a person bound
to give effect to the instructions of another person in relation to the
security, unless the person who theretofore instructed him is resident in
Sri Lanka and not elsewhere, or
(2) Where the holder of a security is not a nominee
and is resident in Sri Lanka, then, except with the permission of the bank, he
shall not do any act whereby he becomes the nominee of another person is
resident in Sri Lanka and not elsewhere.
(3) Where the holder of a security transferable of
means of a bearer certificate is resident in Sri Lanka and is a nominee for a
person resident outside Sri Lanka, then, except with the permission of
the bank, be shall not deliver the certificate into the possession of any
person, whether the delivery amounts to a transfer or not.
Special provision as to dealings in prescribed Securities
17.(1) This section shall apply to prescribed securities on
which any capital money, dividend or interest is payable in any foreign
currency or as respects which the holder has an option to require payment of
any capital money, dividend or interest thereon in any foreign currency.
(2) Except with the permission of the Minister, no
person shall, in
(3) The bank may in writing direct any person
resident in Sri Lanka by whom or to whose order a security to which this
section applies is held in or outside Sri Lanka to render a return to the
bank, in such manner and within such period as may be specified in the
direction, giving such particulars with respect to that security as may be so
specified.
(4) The Minister may direct any person resident in
(a) to sell procure the sale of the security, and
thereafter to offer or cause to be offered the net foreign exchange
proceeds of sale to the bank, directly or through an authorised
dealer; or
(b) to transfer the security to the Deputy Secretary
to the Treasury on behalf of the Government at a price which in the
opinion of the Deputy Secretary to the Treasury is not less than the
market value of the security on the date of the giving of the direction.
Any direction under this subsection may be given either
generally, with respect to specified securities and the holders thereof by
notice published in the Gazette, or specially to any holder by notice in
writing.
Validation of certain transfers
18.(1) The title of any person to a security for which he
has given value on a transfer thereof, and the title of all persons
claiming through or under him, shall notwithstanding that the transfer,
or any previous transfer, or the issue of the security, was by reason of the
residence of any person concerned other than the first mentioned person
prohibited by the provisions of this Act relating to the transfer or issue of
securities, be valid unless the first mentioned person had notice of the facts
by reason of which it was prohibited.
(2) Without prejudice to the provisions of subsection
(I), the bank may issue a certificate declaring in relation to a
security, that any such acts done before the issue of the certificate as
purport to effect the issue or transfer of the security, being act which were
prohibited by this Act, are to be, and are always to have been, as valid as if
they had been done with the permission of the bank, and the said act shall have
effect accordingly.
(3) Nothing in this section shall affect the
liability of any person to prosecution for any offence against this
Act.
Application of part III to secondary securities
19(1) This Part of this Act shall, with any modification
which may be prescribed in relation to any document mentioned in
subsection(2), apply as if the documents created, and were the certificate of
title to, a security (hereafter in this Act referred to as a “secondary
security”).
(2) The documents referred to in subsection (1) are
any letter of allotment which may be renounced, any letter of rights,
any warrant conferring an option to acquire a security, any deposit
certificate in respect of securities, and such other documents conferring, or
containing evidence of, rights as may be prescribed.
Interpretation of part III.
20 (1) In this part of this Act-
“registered” includes inscribed;
“registered in Sri Lanka” and “registered outside Sri
Lanka” means respectively, registered in a register in, and registered in a
register outside, Sri Lanka;“a register” includes any book, file or index in
which securities are registered; and “holder”-
(a) in relation to a security transferable by means
of a bearer certificate or to a coupon, includes the person having
physical custody of the certificate or coupon:
Provided that where the certificate or coupon is deposited
with any person in a locked or sealed receptacle from which he is not entitled
to remove it without the authority of some other person, that other person
shall be deemed for the purposes of this provision to have the physical custody
of the certificate or coupon; and
(b) in relation to a security which is registered in
the name of a deceased person, or of any person who, by reason of insolvency,
unsoundness of mind or any other disability, is incapable of
transferring the security, means the executor of the last will or the
administrator of the estate of the deceased, the assignee of the insolvent’s
estate, or any other person entitled to transfer the security.
(2) For the purposes of any provision of this part of
this Act prohibiting the transfer of securities, a person shall be deemed to
transfer a securities if he executes any instrument of transfer thereof,
whether effective or not, and shall be deemed to transfer it at the place where
he executes the instrument.
(3) The holder of a security or coupon shall be
deemed for the purposes of this part of this Act to be a nominee in respect
of that security or coupon if he is not entitled to exercise any right
relating to that security or coupon except in accordance with instructions
given by some other person, and references in this part of this Act to the
person for whom the holder of a security or coupon is a nominee shall be
construed as references to the person who is entitled to give instructions,
either directly or through the agency of one or more persons, as to the
exercise of any right relating to the security or coupon and is not in so doing
him self under a duty to comply with instructions given by some other
person;
Provided that-
(a) a person shall not, by reason only that he has a
controlling interest in a body corporate, be deemed for the purposes of
this subsection to be entitled to give instructions to that body as to the
exercise of any right relating to any security or coupon of which that body is
the holder, and
(b) a person shall not be deemed to hold a security
or coupon as a nominee by reason only that he holds it as trustee if he is
entitled to transfer the security or coupon without permission from any other
person.
PART IV
IMPORT AND EXPORT
Restrictions on imports,
21. (1) No person shall, except with the permission
of the bank, import into
(a) any notes of a class which are or have at any
time been legal tender in
(b) any such other notes as may be prescribed being
notes issued by a bank or notes of a class which have at any time
been legal tender in any territory; or
(c) any gold.
(2) The bringing or sending into any port or other
place in
(3) In this section, “note” includes part of a
note.
Restriction on export
22. (1) No person shall, except with the permission
of the bank, export from Sri Lanka-
(a)any foreign currency;
(b)any Treasury Bills;
(c)any savings certificate expressed in
(d)any gold;
(e)any of the following documents (including any such
document which has been cancelled):-
(i)any certificate of title to a security and any
coupon;
(ii)any policy of assurance;
(iii)any document certifying the destruction, loss or
cancellation of any of the documents aforesaid; or
(g)any such article exported on the person of a traveller
or in a traveller’s baggage as may be prescribed.
(2) In subsection (1):-
“note” includes part of a note;
“security” includes a secondary security; and
“coupon” shall be construed in accordance with the meaning
of “security”.
(3) The Minister may be Order published in the
Gazette provide that no goods shall, except with the permission of the bank, be
exported from
(4) In granting permission under subsection (3) in respect
of the exportation of goods for the purposes of sale, the bank shall satisfy
itself-
(a) that payment for the goods has been made to a
person resident in Sri Lanka by such means and in such manner as may be
prescribed in relation to goods of that class or description exported to
the destination, or is to be so made not later than six months after the date
of exportation; and
(b) that the amount of the payment that has been made
or is to be made represents such a return for the goods as is in all the
circumstances satisfactory in the national interest:
Provided that the bank may direct that, in cases to which
the direction applies, paragraph (a) of this subsection shall have effect as it
for the reference to six months there were substituted a reference to such
longer or shorter period as may be specified in the direction, or as if the
words “or is to be so made not later than six months after the date of
exportation” were omitted.
(5) Where, on the authority of permissions granted
under subsection (3), a person is about to export goods from Sri Lanka
and the bank has reason to suspect that any declaration made by that
person, in his application for the permission, as to the ultimate
destination of the goods is untrue in any material particular, the
Principal Collector of Customs shall, on the advice of the bank, detain the
goods until the bank is satisfied as to the truth of that declaration and, if
the bank is not so satisfied, thee goods shall be forfeited and shall be dealt
with or disposed of in such manner as the Minister may direct.
(6) Where, at any time after the grant of
permission under subsection (3), the bank has reason to believe that the amount
of the payment that has been made or is to be made for the goods to which the
permission relates is not in accord with paragraph (b) of subsection (4),
the bank may direct the person holding the shipping documents relating to the
goods to retain possession thereof until such time as the person to whom
the permission has been granted has made arrangements to receive as
payment for the goods an amount which, in the opinion of the bank, accords with
the aforesaid paragraph (b).
(8) Any reference in this section to the destination of any
goods includes a reference to the ultimate destination thereof.
(9) The preceding provisions of this section shall be
in addition to and not in substitution or derogation of the provisions of any
other written law prohibiting, restricting or regulating the exportation of
goods from
Application of Customs Ordinance and post Office Ordinance
23(1) The Customs Ordinance shall apply in relation to
anything the importation or exportation of which into or from
(2) Where anything in relation to which the Custom
Ordinance applies by virtue of subsection (1) is forfeited under that
Ordinance, such thing shall, notwithstanding any contrary provision in that Ordinance,
be dealt with or disposed of in such manner as the Minister may direct.
(3) The importer or exporter of any such forfeited
thing as is referred to in subsection (2)may, in accordance with such
directions as may be given by the Minister either generally or specially in the
circumstances of any particular case, be paid in Sri Lanka currency an amount
not exceeding the value in Sri Lanka currency of that thing.
(4) Payment to any importer or exporter under
subsection (3) shall be made by the Deputy Secretary to the Treasury or
by any officer authorised in that behalf by such Deputy Secretary; and
any money required for any such payment is hereby charged upon the Consolidated
Fund.
(5) In this section, “importer” and “exporter
with reference to any postal article, mean respectively the addressee and
the sender of that article.
PART V
MISCEELLANEOUS
Duty
to section
24. (1) Except with the permission of the bank no
person who has a right (whether present or future and whether vested or contingent)
to receive any foreign currency or to receive from a person resident outside
Sri Lanka a payment in rupees, shall do, or refrain from doing, any act with
intent to secure-
(a) that the receipt by him of the whole or part of
that currency or, as the case may be, of that payment in rupees is delayed,
or
(b) that the currency or payment ceases, in whole, or
in part, to be receivable by him:
Provided that nothing in this subsection shall, unless the
bank otherwise directs, impose on any person any obligation in relating to any
debt arising in the carrying on of any trade or business, to procure the
payment thereof at an earlier time than is customary in the course of that
trade or business.
(2) Where a person has contravened the provisions of
subsection (1) in relation to any foreign currency or any payment in
rupees-
(a) the bank may give to him or to any other person
in or resident in Sri Lanka who appears to the bank to be in a position
to give effect thereto such directions as appear to the bank to be expedient
for the purpose of obtaining or expediting the receipt of the currency or
payment in question and,
(b) without prejudice to the preceding provisions of
this subsection, the Secretary to the Treasury may direct that there shall be
assigned to the Deputy Secretary to the Treasury the right to receive the
currency of payment or enforce any security for the receipt
thereof.
25(1) Where any statement or declaration has been made
under any provision of this Act that any goods are to be sold outside Sri
Lanka, no person who is entitled to sell or procure the sale of those goods
shall, except with the permission of the bank, do or refrain from doing
any act with intent to secure-
(a) that such sale is delayed to an extent which is
unreasonable having regard to the ordinary course of trade, or
(b) that, on such sale, any payment made for the
goods is not made in the manner indicated by the statement or
declaration.
(2) Where any permission or consent has been granted
under this Act subject to a condition providing that, or on the faith of
an application stating an intention that, any goods should be imported into Sri
Lanka, no person who is entitled to procure the importation of those
goods shall do, or refrain from doing, any act with intent to secure that the
importation thereof is delayed to an extent which is unreasonable having regard
to the ordinary course of trade.
(3) Where in any such case as is specified in
subsection (1) or subsection (2)-
(a) the goods have not been sold or imported as
indicated by the statement, declaration, condition or application within
the time thereby indicated or, if no time thereby indicated or, if no
time is thereby indicated, a reasonable time or (in either case) within such
further time as may be allowed by the bank, or
(b) it appears to the bank that the goods cannot be
sold or imported as indicated by the statement, declaration, condition or
application, the Secretary to the Treasury may give to any person who appears to
him to be in a position to give effect thereto such directions as appears
to him to be expedient as to the manner in which the goods are to be dealt
with.
(4) Without prejudice to the provisions to subsection
(3), the Secretary to the Treasury may in any case to which those provisions
apply give directions that the goods shall be assigned to the Deputy Secretary
to the Treasury.
Property obtained by Infringement of Act.
26 (1) Where a person-
(a) has made any payment which is prohibited by this
Act, or
(b) being bound under this Act to offer or cause to
be offered any specified foreign exchange to an authorised dealer, has
otherwise disposed of that exchange, the Secretary to the Treasury may direct
him to sell or procure the sale of any property which he is entitled to sell or
of which he is entitled to procure the sale , being property which
represents, whether directly of indirectly, that payment or that specified
foreign exchange, as the case may be and may by the same or a subsequent direction
specify the manner in which, the persons to whom, and the terms on which the
property is to be sold.
Without prejudice to the provisions of sub-section (1), the
Secretary to the Treasury may in any case to which those provisions apply give
directions that the property shall be assigned to the Deputy Secretary to
the Treasury.
Provisions supplemental to proceeding provision of Part. V.
27(1) Where, under the preceding provision of this part of
this Act, the Secretary to the Treasury has power to give directions that any
right to receive any currency or any payment in rupees or to enforce any
security for the receipt thereof, any goods, or any other property
shall be assigned to the Deputy Secretary to the Treasury, the Secretary to the
Treasury shall also have power to direct that the right, goods, or property
shall vest in the Deputy Secretary to the Treasury, and in any such case it or
they shall vest in the Deputy Secretary to the Treasury free from any mortgage,
pledge, or charge, and the Deputy Secretary to the Treasury shall deal with or
dispose of it or them in such manner as the Minister may direct.
(2) Where, in pursuance of directions under the
preceding provisions, of this part of this Act, any right, goods, or property
is or are assigned to the Deputy Secretary to the Treasury, or any right,
goods, or property vests or vest in the Deputy Secretary to the Treasury in
pursuance of directions given under sub section (1), the Deputy Secretary
to the Treasury or any officer authorised in that behalf by such Deputy
Secretary shall pay the net sum recovered by the Deputy Secretary to the
Treasury in respect of the right goods, or property to the person making the
assignment or, in the case of any right, goods, or property vested in the Deputy
Secretary to the Treasury under subsection (1), to the person, who, but for the
directions, would be entitled to the right, goods or property.
Transfer of policies of assurance.
28. (1) Except with the permission of the bank, no
person resident in Sri Lanka shall transfer to a person who is resident
outside Sri Lanka or is a nominee for a person resident outside Sri Lanka, any
right to the sums assured by any policy of assurance, so, however, that where
the person liable for the sum so assured makes any payment thereof to a person
resident in Sri Lanka and not elsewhere, or makes with the permission of the
bank, any payment thereof to any other person-
(a) he shall not be bound to inquire as to the
residence of any person other than the person to whom, and ( if it is not
the same person) the person to whose order, the payment is made; and
(b) the payment shall, to the extent of the sums paid
discharge him from his liability under the policy, notwithstanding that
the payment is made to or to the order of a person who was not entitled thereto
otherwise than by virtue of a transfer prohibited by this
subsection.
(2) Subsections (2) and (3) of section 18 shall apply
in relation to any transfer prohibited by this section as they apply in
relation to a transfer prohibited by this Act of a security.
(3) In this section, “nominee”, in relation to any
policy of assurance, has the same meaning as is assigned to it by subsection
(3) of section
Settlements.
29(1) Except with the permission of the bank, no person
resident in Sri Lanka Shall- settle, otherwise than by will, any property upon
any trust under which an interest in that property is conferred on a person
who, at the time of the settlement, is resident outside Sri Lanka, or
(b) exercise, otherwise than by will, any power of
appointment (whether created by will or otherwise) in respect of any
property in favour of a person who, at the time of the exercise of such power,
is resident outside
(2) A settlement or an exercise of a power of
appointment shall not be invalid by reason that it is prohibited by this
section, except so far as it purports to confer an interest in any property on
any person who, at the time of the settlement or the exercise of the
power of appointment, is resident outside Sri Lanka.
(3) Subsections (2) (3) of section 18 shall
apply in relation to a settlement or the exercise of a power of
appointment prohibited by this section as they apply in relation to a
transfer prohibited by this Act of a security.
(4) For the purposes of this section-
(a) any reference to settling property includes a
reference to the making of any disposition, convenant agreement or
arrangement whereby the property becomes subject to a trust, or ( in the case
of a resettlement) to a different trust.
(b) a person shall be deemed to have an interest in
property if he has any benefical interest therein, whether present or future
and whether vested or contingent, or falls within a limited class of
persons in whose favour a discretion or power in respect of the
property is exercisable ; and
(c) the expression “will” includes any testamentary
disposition.
Tourists services, shipping agencies and airlines agencies
29A. No person shall operate or maintain any tourist,
airline or shipping service or carry on business as shipping agent or airline
agent except in accordance with such conditions and requirements as may
be imposed from time to time by the bank.
Prescribed services to be performed in accordance with
conditions and requirements imposed by the bank.
29(b) No person in, or resident in,
Restriction of appointments of certain companies and firms
as agents or technical advisers in Sri Lanka
29c. Notwithstanding anything contained in any other
provision of this Act a company (other than a banking company) which is
not incorporated under any law in force in Sri Lanka or which is controlled
directly or indirectly by any person or persons resident outside Sri Lanka, or
any branch or office of any such company in Sri Lanka, or a firm
consisting wholly or in part of persons resident outside Sri Lanka, shall not
accept appointment as-
(a) agent in
(b) technical or management adviser in
Certain provisions relating to foreign companies
30.(1) Where there is served on any person resident in Sri
Lanka a notice in writing that the bank wishes any such requirements as
are hereinafter mentioned to be complied with by any foreign company, and that
person can by doing or refraining from doing any Act-
(a) cause the foreign company to comply with any of
the requirements; or
(b) remove any obstacle to the foreign company
complying with any of the requirements : or
(c) render it in any respect more probable that the
foreign company will comply with any of the requirements, then, except so far
as permission to the contrary may be given by the bank, that person shall do
or, as the case may be, refrain from doing that act.
(2) The requirements with respect to which a notice
under subsection (1) may be given are as follows, that is to say, the foreign
company shall-
(a) furnish to the bank such particulars relating to
the assets and business of such company as may be mentioned in the
notice;
(b) sell or procure the sale to an authorised dealer
of any foreign exchange mentioned in the notice, being foreign exchange
which it is entitled to sell or to which it is entitled to procure the
sale;
(c) declare and pay such dividends as may be
mentioned in the notice;
(d) realise any of its assets mentioned in the notice
in such manner as may be so mentioned;
(e) refrain from selling, or transferring, or doing
anything which affects its rights or powers in relation to, any such
instrument or securities as may be mentioned in the notice.
(3) Except with the general or special permission of
the bank, no person resident in
(4) Notwithstanding anything contained in any other
law, no transfer of any interest in any business in Sri Lanka made by a
person resident outside Sri Lanka to any person also resident outside Sri Lanka
shall be valid unless such transfer is confirmed by the bank on an application
made to it for such confirmation by the transferor or the
transferee. The preceding provisions of this subsection shall not apply
to the transfer of any share in a company.
(5) Except with the general or special permission of
the bank, no person resident in
(6) Except with the general or special permission of
the bank, no person resident in
(7) Except with the general or special permission of
the bank, no person resident in
(8) In this section, “foreign company” means a
company not incorporated under any law in force in Sri Lanka and in the case of
which any of the following conditions is fulfilled:-
(a) that the company is by any means controlled
(directly or indirectly) by any person or persons resident in
(b) that more than half of the sums which, on a
liquidation thereof, would be receivable by holders of share or loan capital,
would be receivable directly or indirectly by, or for the benefit of, persons
resident in Sri Lanka; or
(c) that more than one half of the assets which, on a
liquidation thereof, would be available for distribution after the payment of
creditors would be receivable directly or indirectly by, or for the benefit of,
any person or persons resident in Sri Lanka; or
(d) that more than one - half-
(i) of the interest payable on its loans and loan capital,
if any, or
(ii) of the dividends payable on its preference share
capital, if any, or
(iii) of the dividends payable on it share capital if
any not being preference share capital, is receivable directly or indirectly by
or for the benefit of , any persons resident in
For the purposes of this subsection, where the identity of
the person or persons by whom or for whose benefit , any sum, assets, interest
or dividends are directly or indirectly receivable depends on the
exercise by any person resident in Sri Lanka of a power vested in him in
that behalf , the sum, assets, interest or dividends shall be deemed to be
receivable directly or indirectly by, or for the benefit of, any person or
persons resident in Sri Lanka.
*PART VI
SUPPLEMENTAL
Blocked accounts
31. (1) Where any person applies for the permission
of the bank for the making of a Payment, or the placing of any sum, to
the credit of any person resident outside Sri Lanka, the bank may direct that
the sum payable or to be credited shall be paid or credited to a blocked
account only. Where such direction is given by the bank such person shall pay
or credit such sum to a blocked account.
(2) Where the bank directs that a payment shall be made to
a blocked account only-
(a) the manner in which the payment may be made shall
be either-
(i) to the banker, with a direction that the payment
shall be credited to a blocked account of the person to whose credit
the payment is made, which direction may, in the case of a payment by
means of a cheque or warrant, be made by marking the cheque or warrant with the
words “blocked account of” (naming that person) or words to the same effect, or
by a crossed cheque or warrant drawn in favour of that person, marked with the
words “payable only to blocked account of payee” or words to the same effect;
and
(b) the sum collected shall be credited by the banker
to a blocked account of that person.
*(4) Any sum standing to the credit of a blocked account
shall not be dealt with except with permission of the bank.
(5) Where a person in whose name a blocked account is
standing is declared an insolvent under the law of Sri Lanka or dies, the
banker may, notwithstanding anything in subsection (4), transfer the account to
the name of the assignee of the insolvent’s estate or the executor of the
last will, or the administrator of the estate, of the deceased, but, save
as aforesaid, no change shall, except with the permission of the bank, be made
in the name in which the account stands; and where any such change is made
(whether or not the permission of the bank is necessary therefor) the
account shall remain a blocked account notwithstanding the change, and the
provisions of this section shall apply accordingly.
(6) Where-
(a) a sum is due from any person to any other person
but the bank directs that it shall be paid or credited to a blocked account
only, and
(b) the person to whom the sum is due nominates
such an account to the person from whom the sum is due, the last mentioned
person shall be under a duty to the person to whom the sum is due to cause the
sum to be paid or credited to that blocked account, and the crediting of any
sum to a blocked account in pursuance of a direction of the bank shall, to the
extent of the sum credited, be a good discharge to the person from whom the sum
is due;
Provided that, in the case of a sum due under a contract,
the preceding provisions of this subsection shall not apply in so far as
the application of those provisions in inconsistent with the intention of
the parties to that contract.
(7) In this section-
“blocked account” means an account opened as a blocked
account at an office or branch in Sri Lanka in favour of any person by a banker
authorised by the bank to open blocked accounts, and
“banker” in relation to any person , means a banker who
opens a blocked account in favour of that person.
32 (1) The Minister may by Order published in the Gazette
provide that, for such of the purposes of this Act as may be specified in
the Order-
(a) any transaction with or by a branch of any
business whether carried on by a body corporate or otherwise, shall be
treated in all respects as if the branch were a body corporate resident where
the branch is situated, and
(b) the making of any book entry or other statement
recording a debit against a branch of any business in favour of any other
branch of that business, shall be treated as a payment to that other
branch, and
(c) any property held by or on behalf of any person
carrying on any business shall be deemed to be held by such of the
branches of that business as may be determined in accordance with the
Order; and any such Order which makes, for any of the purposes of Part III of
this Act, such provision as is mentioned in paragraph (c) of this subsection
may contain provisions declaring the circumstances in which in branch is to be
treated as nominee for any other branch.
(2) Any reference in subsection (1) to a branch of
business shall be deemed to include a reference to the head office of that
business.
(3) Subsections (1) and (2) shall apply in relation
to any body of persons (whether corporate or unincorporate) carrying on
any activity, whether for the purpose of profit or not, as they apply in
relation to a business.
Contracts
33. (1) It shall be an implied
condition in any contract that, where, by virtue of this Act, the
permission or consent of the bank is at the time of the contract required for
the performance of any term thereof, that term shall not be performed except in
so far as the permission or consent is given or is not required;
Provided that the preceding provisions
of this subsection shall not apply to that term in so far as the application of
those provisions to that term is inconsistent with the intention of the parties
to that contract, whether by reason of their having contemplated the
performance of that term in despite of the provisions of this Act or for any
other reason.
(2) Notwithstanding anything in
the bills of Exchange Ordinance, neither the provisions of this Act nor any
condition, whether express or to be implied having regard to those
provisions, that any payment shall not be made without the permission of the
bank under this Act, shall be deemed to prevent any instrument being a bill of
exchange or promissory note.
Obligation under other written leave
34. Where any provision of any
other written law imposes an obligation in respect of the doing of any act and
the permission or consent of the bank is, by virtue of this Act required
for the discharge of the obligation, it shall be an implied condition of the
Obligation that it shall not be discharged except in so far as the permission
or consent is given or is not required.
Legal proceedings etc
35. (1) The provisions of Part II
of this Act shall apply to sums required to be paid by any judgement or order
of any court or by any award as they apply in relation to other sums, and it
shall be implied in any judgement or order of any court in Sri Lanka, and in
any award given under the law of Sri Lanka, that any sum required to be paid by
the judgement, order or award (whether as a debt, as damages or otherwise) to
which those provisions apply shall not be paid except with the permission of
the bank.
(2) Nothing in this Act shall be
construed as preventing the payment by any person of any sum into any
court in Sri Lanka, but the provisions of Part II of this Act shall apply to
the payment of any sum out of court, whether under an order of the court or
otherwise, to or for the credit of any person resident outside Sri Lanka.
(3) In any insolvency
proceedings, winding up of a company, or administration of the estate of
a deceased person, carried on under the law of Sri Lanka, a claim for a sum not
payable without the permission of the bank shall, notwithstanding that the
permission has not been given or has been revoked, be admitted to proof
as if the permission had been given and had not been revoked:
Provided that nothing in the preceding
provision of this subsection shall be construed as affecting the application of
the provisions of Part II of this Act to payments by the assignee of the
insolvent’s estate, or by the liquidator, or by the executor of the last
will, or administrator of the estate, of the deceased, or by any other
person in such insolvency proceedings, or winding up, or administration.
(4) The provisions of this Act
restricting the making of settlements shall not apply to any deed of
arrangement made for the benefit of creditors generally, and the provisions
of subsection (3) shall apply in relation to proceedings under any deed
of arrangement as they apply in relation to insolvency proceedings.
(5) Where the permission of the
bank is required under this Act for the payment of a debt the amount of which
is sufficient under section 18 of the Insolvency Ordinance, to
enable the creditor to petition for the sequestration of the estate of
the debtor if the debtor commits an act of insolvency, the debt may,
notwithstanding the aforesaid requirement, be allowed to be a good
petitioning creditor’s debt, if and to the extent that the debt can be
satisfied either by a payment into court or by a payment to a blocked
account.
Persons having Sri Lanka
36. Where a person resident in
Sri Lanka leaves Sri Lanka, the bank may, before, at or after the time he
leaves Sri Lanka, direct that, for such period as may be specified in the
direction, payments by him or on his behalf and to him or to his credit and
transactions in or in relation to Treasury Bills, securities or secondary
securities in which he is in any way concerned shall, whether or not he
continues to be resident in Sri Lanka, be subject to such restrictios as
may be specified in the direction.
Determination of residence
37.(1) Where any question arises as to
the territory in which a person is or is not resident, the territory in which
such person shall, for the purposes of this Act, be treated as resident or not
resident, as the case may be, shall be determined in accordance with such
general or special directions as may be given in that behalf by the
Minister.
(2) For the purposes of this Act,
the executor of the last will or the administrator of the estate of a deceased
person shall, unless the Minister otherwise directs, be treated in respect of
any matters in which such executor or administrator is concerned solely in his
capacity as such, as resident-
(a) if directions given under
subsection (1) apply in the case of such deceased person in the territory in
which he is required by such directions to be treated as having been resident ;
or
(b) in any other case, in the
territory where at the time of his death the deceased person was
resident.
Directions to bankers, authorised
dealer, etc.
38. The bank may give-
(a) to bankers and to persons who
are concerned with the keeping of any register in Sri Lanka or are entrusted
with the payment of capital moneys, dividends or interest in Sri Lanka,
directions as respects the exercise of any functions exercisable by them by
virtue of, or by virtue of anything done under, any provision of the Act,
and
(b) to authorised dealers-
(i) such directions as aforesaid,
or
(ii) directions as to the terms
on which they are to accept gold or foreign currency, or
(iii) directions requiring them
to offer their gold or specified foreign exchange for sale to the Central Bank
on such terms as may be set out in the directions.
Furnishing of information and
production of documents
39 (1) Without prejudice to any other
provisions of this Act, the bank may give to person in, or resident in Sri,
Lanka directions requiring him-
(a) to furnish, within such time
and in such manner as may be specified in such directions, to the bank or to
any person designated in such directions as a person authorised to required it,
any information in his possession which the bank or the person so authorised,
as the case may be, may require for the purpose of securing compliance
with, or detecting evasion of, the provisions of this Act, or where such person
does not have the information in his possession, to obtain such information in
his possession, to obtain such information from any such person in Sri Lanka in
abroad as may be specified in such directions and to furnish such information
to the bank or to the person authorised; or
(b) to attend in person before
any officer specified in such direction at such place, at such date and at such
time as may be specified therein so that he may be examined on any such matter
or matters as may be specified in such directions.
(1A) Any person examined under the
provisions of subsection (1) (b) shall answer truly all questions put to him by
the officer examining him.
(2) A person required by the
directions given under subsection (1) to furnish information shall also produce
such books, accounts or other documents in his possession or control as may be
required, for the purpose referred to in
subsection (1), by the bank or by the person authorised to require the
information, as the case may be.
(3) Nothing in the preceding
provisions of this section shall be taken to require any person who has acted
as counsel or proctor for any person to disclose any privileged communication
made to him in that capacity.
(4) Where a person is convicted
for failing to give information or produce any books, accounts or other
document when required so to do under this section, the court may make an
order requiring the offender, within such period as may be specified in the
order, to comply with the requirements to give the information or produce the
books, accounts or other documents.
(5) In this section, “bank” includes
any officer of the Department of Inland
Revenue Department of Customs generally or specially authorised by the Monetary
Board to exercise the powers conferred by this section.
Search of premises
40.(1) If the Head of the Department of
Exchange Control or any such offer
Who is designated as an Assistant to him or any such public offer not
below
the rank of Assistant to the Head of Department of Government, as may be
authorised by the Head of the Department of Exchange Control to act for the
purposes of this section is satisfied-
(a) that there is reasonable
ground for suspecting that an offence under this Act has been or is being
committed and that evidence of the commission of the offence is to be found at
any premises or any vessel, vehicle or aircraft or with any person;
or
(b) that any books, accounts or
other documents which ought to have been produced under section 39 and have not
been so produced are to be found at such premises or in any such vehicle,
vessel or aircraft or with such person; or
(c) that any foreign currency is to be
found at any such premises or in any such vehicle, vessel or aircraft or with
any such person, the Head of the Department of Exchange Control or such
officer may enter such premises or, as the case may be, any premises upon which
the vehicle, vessel or aircraft or person may be, and search such premises or,
as the case may be, such vehicle, vessel or aircraft or person.
(2) The Head of the Department of
Exchange Control or such officer, as the case may be, may seize any article
which is found in the premises or in the vehicle, vessel or aircraft or
with the person and which he has reasonable grounds for believing to be
evidence of the commission of any offence under this Act, or any books,
accounts or documents which he has reasonable grounds for believing ought to
have been produced under section 39:
Provided that no female shall, in
pursuance of a search under this section, be searched except by a
female.
(3) Where by virtue of this
section a person has any power to enter into any premises, he may use such
force as is reasonably necessary for the purpose of exercising that
power.
Where by virtue of this section, an
officer has power to search a person, such officer may examine such person, and
such person shall answer truly all questions put to him by the officer
examining him.
(4) No person shall
obstruct any other person in the exercise of any powers conferred on that
other person by virtue of the preceding provisions of this section.
(5) Any person empowered to do
any act under this section may, if the thinks fit so to do, obtain the
assistance of a peace officer for doing such act.
Restriction of select articles
41. (1) Any article seized by any
authority under or by virtue of this Act which the authority has
reasonable ground for believing to be evidence of the Commission of an
offence against this Act may be retained for a period of three months or,
if within that period there are commenced legal proceedings in respect of such
an offence in which the article is, or can properly be, adduced in evidence,
until the final determination of those proceedings.
(2) The powers conferred by this
section in relation to any article shall be in addition to, and not in
derogation of, any powers otherwise exercisable in relation
thereto.
Destruction, etc., of documents and
false statement
42. No person in or resident in
(a) With intent to evade the
provisions of this Act, destroy, mutilate, deface, secrete or remove any books,
accounts or other documents, or
(b) in furnishing any information
for any of the purposes of this Act make any statement which he knows to be
false in a material particular, or recklessly make any statement which is
false in a material particular.
Application to State
43. This Act shall bind the State
and shall apply to transaction by a Government Department or any person
acting on behalf of the State.
Exemptions
44. Any provision of this Act
imposing any obligation or prohibition shall have Effect subject to such
exemptions as may be granted by order of the Minister, and any such
exemption may be either absolute or conditional.
Decisions of Bank
45. Every decision of the bank to
grant or refuse any permission under this Act Or to revoke any permission
which has been so granted, or to rescind, add to or vary any conditions
or to extend or reduce any time limit to which the permission granted is
subject, shall be communicated in writing by the bank to the person by
whom application for the permission was made or, as the case may be , to whom
the permission was granted.
Appeals
46. A person in regard to whom
the bank makes a decision under this Act may, If he is dissatisfied with that
decision, make a written appeal against the decision to the Minister within ten
days after that decision is communicated to him.
Finality of decisions
47. A decision of the bank
against which an appeal is not made in accordance. with the provisions of
section 46, and a decision of the Minister on an appeal made in
accordance with those provisions, shall be final and conclusive and
shall not be subject to review or be called in question in any court.
Provisions relating to permission
consent or authority
Any permission, consent or authority
granted under this Act may be-
(a) general or special,
(b) absolute or conditional
(c) limited so as to expire on a
specified date, unless renewed, and
(d) varied or revoked
Burden of proof of permission
49. In any prosecution of a
person for an offence against this Act, the burden or proving that he had
obtained the permission or consent of the bank for doing the act or
making the omission which constitutes the offence shall be on him.
Presumption relating to foreign
currency
49A. In any prosecution for the offence
of contravening any of the provision of this Act in relation to foreign
currency, it shall be presumed, until the contrary is proved, that the currency
in respect of which the offence is alleged to have been committed is
genuine.
Admissibility of certain documents
49B. In any legal proceedings in
respect of any offence under this Act, any of the following documents may
be produced in court and given in evidence Against any accused and shall
be prima facie evidence of the matters,
transactions or accounts therein contained:-
(a) a certified copy of a
banker’s book or of any extract thereof obtained from the manager or principal
accountant of the bank;
(b) a certified copy of any book
or other record required by law to be maintained by a company or a certified
copy of any extract thereof, obtained from a director or secretary of the
company; and
(c) a certified copy of any document
or of an extract thereof in the proper custody of an officer of a foreign
Government, and obtained from such officer.
Indemnity for sets done in good faith
50. No person shall be liable in
any suit or other legal proceeding for any act done, or purporting to be done,
in good faith in pursuance of the powers Conferred by or under this Act,
or for the purpose of carrying out the provisions of this Act.
Duty of officers and servants to
maintain secrecy
50A. (1) Except in the performance of
his duties under this Act, every officer or servant of the Department of
Exchange Control of the Central Bank shall Preserve, and aid in preserving,
secrecy with regard to all matters that may come to his knowledge in the
performance of his duties under this Act; and any such officer or servant who
communicates any such officer or servant who communicates any such matter
to any person other than-
(a) the person to whom that
matter relates or his authorised representative, or
(b) the Monetary Board, or
(c) the Governor of the Central
Bank or an officer of the Central Bank authorised by such Governor to obtain
information regarding that matter, or
(d) the Secretary to the Ministry
of Finance, or
(e) a public officer authorised
by the Minister to obtain information regarding that matter, or
(f) a person to whom it is
necessary to communicate that matter for the purpose of securing
compliance with or detecting evasion of, any provision of this Act, or of
any other written law,
or suffers or permits any unauthorised
person to have access to any books, papers or records of the aforesaid
department or in the possession or custody, or under the control, of the head
of that department, shall be guilty of an offence.
(2) No officer or servant of the
Department of Exchange Control shall, in any legal proceedings to which the
Monetary Board is not a party, be compellable, except by order of the
court, to produce any book or document or to divulge or
communicate any mater coming under his notice in the performance of his duties
under this Act.
(2) No officer or servant of the
Department of Exchange Control shall, in any legal proceedings to which the
Monetary Board is not a party, be compellable, except by order of
the court, to produce any book or document or to divulge or communicate any
matter coming under his notice in the performance of his duties under this
Act.
(3) For the purposes of this
section any officer authorised by the Monetary
Board under subsection (5) of section 39 shall be deemed to be an officer of
the Department of Exchange Control of the Central Bank.
Offences
51.(1) Any person in or resident in Sri
Lanka who contravenes any provision
of this Act or of any regulation made under this Act or fails to comply
with
any direction given or condition or requirement imposed under this Act
shall be guilty or an offence, notwithstanding that the offence may, by virtue
of Part IV of this Act, be also punishable under the provisions of the customs
Ordinance.
(2) Any person who attempts
to commit an offence against this Act shall be guilty of an offence.
(3) Where an offence against this
Act is committed by a body corporate, any person who at the time of the
commission of the offence was a director, general manager, secretary or other
similar officer of the body corporate, or was purporting to act in any
such capacity, shall be deemed to be guilty of that offence, unless he
proves that the offence was committed without his consent or connivance and
that he exercised all such diligence to prevent the commission of the offence
as he ought to have exercised having regard to the nature of his functions in
that capacity and to all the circumstances.
(4) Any person who commits an
offence under this Act shall-
(a) On conviction after summary
trial before a Magistrate, be liable to imprisonment of either description for
a term not exceeding eighteen months, or to both such imprisonment and a
fine; or
(b) on conviction before the High
Court, be liable to imprisonment of either description for a term not exceeding
five years, or to both such imprisonment and a fine; and where the offence is
concerned with any gold, currency, security goods or other property, the court
may, if it thinks fit so to do, order the gold, currency, security, goods, or
property to be forfeited; and any gold currency, security, goods or
property forfeited under this subsection shall be dealt with or disposed of in
such manner as the Minister may direct.
(5) Except in the case of a body
corporate, the maximum fine which may be imposed for an offence against this
Act shall be fifteen thousand rupees so, however, that where the offence is
concerned with any gold, currency, security, payment, goods or other property,
and does not consist only of a failure to give information or produce
books, accounts or other documents with respect thereto when required so to do
under section
(6) A Magistrate before whom a
prosecution is instituted against any person for an offence against this Act
may, notwithstanding anything in the Code of Criminal Procedure
Act, No. 15 of 1979, decide whether he will try that person
summarily or take non summary proceedings in respect of that offence;
Provided that the preceding
provisions of this subsection shall not affect or prejudice any right or power
of the Attorney-General under the aforesaid code of Criminal Procedure
Act.
(7) No prosecution in respect of
any offence under this act may be commenced ($ 13, Law 39 of 1973) except at
the instance of, or with the sanction of , the bank:
Provided that this subsection shall not
apply to a prosecution commenced by, or at the instance of, the Attorney -
General.
(8) All offences under this Act
shall be cognizable offences for the purposes of ($ 13, Law 39 of 1973) the
application of the provisions of the code of Criminal procedure Act,
notwithstanding anything contained in the First Schedule to that Act.
(9) Notwithstanding anything in
any other law any offence under this Act ($ 13, Law 39 of 1973) committed
outside
Imposition of penalties by the
bank
52. (1) Before the commencement
of a prosecution under this Act, the bank may in writing require any person who
in its opinion has committed a offence under this Act to pay as a penalty a sum
not exceeding two thousand rupees, ($ 14, Law 39 of 1973) within such period as
may be specified in the notification of such requirement.
(2) Where the offence referred to
in subsection (1) is concerned with any gold, currency, security, payment,
goods or other property, and is not only a failure to give information or
produce books, accounts or other documents with respect thereto when required
so to do under section 39,-
(a) the bank may be writing
require such person to pay as a penalty within such period as may be specified
in the notification of such requirement an additional sum not exceeding three
times the amount or value of the gold, currency, security, payment, goods
or property; and
(b) the bank may, if it thinks it
fit so to do, in writing require gold, currency, security goods or
property to be delivered to the bank.
(3) Every requirement for
delivery to the bank made under subsection (2) (b) shall be communicates to the
person in whose possession the gold currency, security, goods or property
required to be delivered is, and such person shall, upon receipt of such
communication, deliver to the bank such gold, currency, security, goods or
property.
(4) Any gold, currency, goods or
property delivered to the bank under this section shall be dealt with or
disposed of in such manner as the Minister may direct.
(5) Any sum of money imposed as
penalty under this section shall be disposed of in the following
manner:-
(a) One-half of that sum shall be
forwarded to the Secretary to the Treasury to be credit to the Consolidated
Fund; and
(b) the other half of such sum
may be divided among any informer or informers who, in the opinion of the bank,
supplied such information as led to the detection of the offence referred to in
subsection (1) , or may be credited to the Consolidated Fund.
(6) No person against whom a
requirement is made by the bank under this section shall except with the
permission of the bank, sell, hypothecate, alienate, transfer or dispose of in
any manner whatsoever any immovable property or securities belonging to him
until such requirement is complied with or until the expiry of a period
of two months from the end of the period specified in such order, whichever is
earlier:
Provided, however, that where on the
failure of such person to comply with such requirement, any action is
instituted against such person in respect of the offence committed by him in
any court before the expiry of the aforesaid period of two months, the court
may direct that the prohibition on disposal of property referred to in the
preceding provisions of this subsection shall continue for such further period
as the court may determine.
(7) Any person against whom a
requirement is made by the bank under this section may, within twenty one days
after the notification of the requirement to him, appeal therefrom in writing
to the Minister. The appeal shall state the grounds of objection to the
requirement.
(8) On an appeal made under
subsection (7), the Minister may confirm, reduce, increase or annul the penalty
imposed, or issue such directions in respect of the gold, currency, security,
goods or property required to be delivered to the bank as he may
think fit.
(9) Where any person pays to the bank
the penalty imposed under this section, or pays the penalty and delivers to the
bank the gold, currency, security, goods or property required to be delivered
to the bank under this section, as the case may be, such person shall not be
liable to a prosecution for the offence in respect of which the penalty was
imposed or the requirement made.
Regulations, forms etc.
53. (1) The Minister may make
such regulations as may be necessary for carrying out the principles and
provisions of this Act.
(2) No regulation made under subsection(1)
shall have effect unless it is approved by Parliament and is published in the
Gazette.
(3) All applications, returns and
other documents made or furnished under this Act shall be in such form as the
bank may from time to time specify or provide for the purpose.
Interpretation
54. (1) In this Act, unless the
context otherwise requires- “authorized dealer” means, in relations to gold or
any foreign currency, a commercial bank for the time being authorized under
section 4 to act for the purposes of this Act as an authorized dealer in
relation to gold or that foreign currency;“bank” or “Central Bank” means the
Central Bank of Sri Lanka established by the Monetary Law
“banker’s book” includes any ledger,
day book cash book, account book and ($ 15, Law 39 of 1973) any other book used
in the ordinary business of a bank;
“banking company” has the same meaning
as in the Companies Act;($ 15, Law 39 of 1973)
“bearer certificate” means a
certificate of title to securities by the delivery of which(with or without
endorsement) the title to the securities is transferable;
“blocked account” has the meaning
assigned to it by section 31 (7);
“Certificate of title to
securities” means any document of title whereby a person recognizes the title
of any other person to securities issued or to be issued by the first
mentioned person, and in the case of any such document with coupons (whether
attached or on separate coupon sheets) includes any coupons which have
not been detached;
“certified copy” of any book, record,
extract or document, means a copy of the ($ 15, Law 39 of 1973)
book, record, extract or document, together with a certificate written at the
foot of such copy that it is a true copy of such book, record, extract or
document; and that such book, record, extract or document is still in proper
custody, such certificate being dated and subscribed by the person in whose
custody it is, with his name and official title;
“company” means a company registered
under the enactments relating to ($ 15, Law 39 of 1973) companies from time to
time in force in
“coupon” means a coupon representing
dividends or interest on a security;
“currency” includes coins, currency
notes, bank notes, postal orders, ($ 5, Law 17 of 1971) money orders, cheques,
drafts, travellers’ cheques, letters of credit, bills of exchange and
promissory notes;
“foreign assets” means any movable or
immovable property outside ($ 5, Law 17 of 1971)
“foreign currency” means any currency
other than Sri Lanka currency ($ 5, Law 17 of 1971) and includes any currency
payable by a foreign Government or institution to a person in, or resident in,
Sri Lanka in respect of his pension or other gratuities due to him;
“foreign exchange” means foreign
currency and includes all deposits,credit and balances payable in any foreign
currency, and any such drafts, travellers’ cheques, letters of credit and bills
of exchange as are expressed or drawn in Sri Lanka currency but payable in any
foreign currency;
“gold” means gold coin or gold
bullion;
“Minister” means the Minister in charge
of the subject of Finance;
“Monetary Board” means the Monetary
Board of the Central Bank;
“Policy of assurance” means any policy
securing the payment of a capital sum or annuity on the occurrence of a
specified event which is certain to happen and includes-
(a) any policy by which the
payment of money is assured on death (except death by accident only) or the
happening of any contingency dependent on human life and
(b) any policy securing the payment of an immediate annuity;
and the reference in this definition to
the occurrence of a specified event which is certain to happen shall include
the occurrence, which is certain to happen, of one of specified events none of
which by itself is certain to happen;
“prescribed” means prescribed by the
Minister by Order published in the Gazette.
“rupees” means
“secondary securities” has the meaning
assigned to it by section 19;
“securities” means shares, stock,
bonds, capital in any partnership, notes (other than promissory notes),
debentures, debenture stock, units under a unit trust scheme and shares in an
oil royalty;
“specified foreign exchange” has the
meaning assigned to it by section 6;
“
“tourist, airline or shipping service”
means service of any class or ($ 15, Law 39 of 1973) description prescribed to
be a tourist, airline or shipping service for the purposes of this Act;
“unit trust scheme” means any
arrangements made for the purpose, or having the effect, of providing for
persons having funds available for investment, facilities for the participation
by them, as beneficiaries under a trust, in profits or income arising from the
acquisition, holding, management or disposal of any property whatsoever;
“unit” means in relation to a unit
trust scheme, a right or interest (whether described as a unit, as a sub
unit or otherwise) which may be acquired under that scheme.
(2) Any provision of this Act
(however worded) the effect of which is to prohibit the doing of any act where
a person to or by whom the act is to be done or who stands in a specified
relation to any property possesses any specified attribute as to residence or
otherwise shall, where the act is done to or by two or more persons, or,
as the case may be, where two or more person stand jointly in that relation to
the property operate to prohibit the doing of that act if any of those persons
possess that attribute; and any provision of this Act imposing an obligation on
any person to do an act if he possesses any specified attribute as to residence
or otherwise shall, in relation to any act which can only be done by two or
more persons jointly-
(a) where all those persons
possess that attribute, operate to impose a joint obligation on all of them to
do the act, and
(b) where some only of them
possess that attribute, operate to impose a separate obligation on each one of
them who possesses that attribute to do all he can to secure the doing of the
act.
(3) Any power conferred by this Act to
require declaration which are to be furnished on any occasion shall include a
power to require that the declarations shall be made by specified persons and
shall be verified in a special manner.
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