The Singapore-Sri Lanka Free Trade Agreement (SSLFTA) is the first modern and comprehensive agreement Sri Lanka has participated in in 12 years. This shows Sri Lanka’s commitment to reforming its economy, bringing great news for Singaporean businesses.
Minister S Iswaran with His Excellency, Mr Ranil Wickremesinghe, Prime Minister of Sri Lanka
In line with Sri Lanka's Vision 2025 of turning itself into “a rich country with a knowledge-based, highly competitive, social-market economy”, the agreement aims to plug Sri Lanka into the Asian supply chains and lay a foundation for Sri Lanka’s eventual economic integration into the Regional Comprehensive Economic Partnership (RCEP).
The SSLFTA is complemented by domestic reforms in Sri Lanka aimed to increase its global competitiveness. These reforms will boost the creation of good quality jobs and new trade and business opportunities.
There are three main areas covered in the SSLFTA: the Tariff Liberalisation Programme (TLP), the Investment Chapter, and Government Procurement.
The TLP aims to draw investment from Singapore to create a nexus of goods, services and investment that will foster a conducive environment for the expansion of trade.
Immediate duty concessions
1st to the 6th Year 0n 5 Equal Instalment Reductions
7th to the 12th Year on 5 Equal Instalment Reductions
Special list of Sensitive Products 11th to 15th year on 5 Equal Instalment Reductions
Table 1: summary of Tariff Liberalisation Programme
While a total of 7438 tariff lines will be tariff free at the end of 15 years of the signing of the FTA, half of the tariff lines will be immediately exempt. Other goods are given time to eliminate their tariffs. This is to allow domestic economic reforms within Sri Lanka to help them become competitive against imported goods.
Singapore secured a total of 286 tariff lines that make up a large amount of our exports to Sri Lanka These lines will also be progressively liberalised under different reduction schedules.
Cess and Port and Airports Development Levy (PAL) will also be eliminated in 5 equal instalments between the 6 th to 10 th years, on goods covered in the SSLFTA.
There are two types of Rules of Origin, the General Rule and Product Specific Rule. You should take note to ensure that your products satisfy the ROO in order to enjoy the preferential treatment accorded in the FTA.
The full list of protections and treatments include:
The National Treatment and Most Favoured Nation Treatment still seek to protect low income groups, animal and plant life, and national heritage. Thus, the policy does not cover:
The government procurement section of the FTA allows Singapore companies to compete on par with local suppliers to the Sri Lanka government. It covers goods, services, and construction. This applies only to international competitive bidding (ICB), and not natural competitive bidding (NCB). The threshold is set at S$130,000 for goods and for services, and S$5 million for construction services.
Procurement is limited to 8 government entities and 5 State Enterprises:
To enjoy the discounts accorded by the FTA, make sure that your goods made in Singapore satisfy the ROO stated above.
However, an endorsement by the Singapore Customs is still required. Companies should follow the following steps to obtain the Preferential Certificate of Origin:
A good will qualify as originating from Singapore if:
Do remember to retain documents such as the Manufacturing Cost Statement, supporting documents, and triplicates for 3 years from the date of issuance. The Sri Lankan authorities may make verification requests through Singapore Customs to verify your consignments. They are not allowed to contact the manufacturer directly. You should contact Singapore Customs if you receive a verification request from any other party.
Sri Lanka Customs may also request a verification visit to the manufacturing premises. They will first seek the written consent of the exporter, and may sight the following:
Sri Lankan Customs will then provide a written determination of whether the good is eligible for preferential tariff treatment. Exporters have a chance to appeal the determination.
Manufacturers, avoid the following errors, which will invalidate preferential tariff treatment for your products.
Read more about the SLSFTA here.
Use the HS/CA product code search engine to know which product code your product falls under.
