BASL goes to court against forced currency conversions

COLOMBO (News 1st); President of the Bar Association of Sri Lanka - Saliya Pieris and Deputy President Anura B. Meddegoda filed a writ petition with the Supreme Court of Sri Lanka over the issue of conversion of foreign currency earnings into Sri Lankan Rupees.

The BASL has named Finance Minister - Basil Rajapaksa, Governor of the Central Bank of Sri Lanka - Ajith Nivard Cabraal and the Monetary Board of the Central Bank as respondents in the petition.

In the event where payment of professional fees are made in foreign currency for the services provided by its members within or outside Sri Lanka, the BASL details that such foreign currency is remitted to and deposited in Personal Resident Foreign Currency Accounts, Special Deposit Accounts or other permitted accounts in Licensed Commercial Banks in Sri Lanka, in such currency without conversion into Sri Lankan Rupees.

The Petitioners state that such draconian measures of forcefully converting or threatening to convert the foreign currency of Attorneys at Law who are members of the BASL amounts to a form of expropriation of private property which is both unconstitutional and wholly illegal and which cannot be sanctioned in law.

The petition stated that such a conversion of privately owned property against the wishes and without the consent of the owner is ultra vires the powers of the Foreign Exchange Act and the Monetary Law Act as well.

It says that it is illegal and unlawful for the 1st and 2nd Respondent under the Monetary Law Act to engage in any activity which purports to usurp powers under the Foreign Exchange Act.

It also points out that the relationship between a Bank and a Customer is governed by the law relating to banking in Sri Lanka.

Accordingly, the Court has been requested to Grant and Issue a mandate in the nature of a Writ of Certiorari, quashing the decision of the 1st Respondent and/or 2nd Respondent to issue Gazette Extraordinary 2251/42 of 28th October 2021 marked “P3” in terms of the Monetary Law Act No. 58 of 1949.

Further, the petitioners seek for a declaration to be granted that Gazette Extraordinary 2251/42 of 28th October 2021 marked made under Section 10(c) read with Section 68 of the Monetary Law Act No. 58 of 1949 marked “P3” is null and void and of no force or effect in law.

The new rules of the Central Bank require exporters to convert, the residual into Sri Lanka Rupees, on or before the seventh (7th) day of the succeeding month, upon meeting following authorised payments.