Sri Lanka Customs

Summary

• Sri Lanka Customs, functioning under Ministry of Finance, is the main government authority related to illicit cigarettes in Sri Lanka.
• Media reported about a partnership of Sri Lanka Customs with the Ceylon Tobacco Company PLC (CTC) to destroy seized cigarettes. Thus, this partnership violates the recommendations of Article 5.3 of the Framework Convention on Tobacco Control (FCTC).
• Ceylon Tobacco Company PLC (CTC) is awarded the “Authorised Economic Operator” status by the Sri Lanka Customs, a privileged status awarded to companies engaged in international trade. This further violates the FCTC Article 5.3 by facilitating the tobacco trade which has a fundamental conflict with public health.

Background

Sri Lanka Customs was established in 1806 during the colonial era in Sri Lanka. It is governed by the Custom Ordinance of 1869 and is one of the oldest government departments in Sri Lanka. According to their website, it is “mainly responsible for the collection of revenue and the enforcement of law”. Functions of the Sri Lanka Customs are listed as:

• ”Collection of revenue”
• ”Prevention of revenue leakages and other frauds”
• ”Facilitation of legitimate trade”
• ”Collection of import and export data to provide statistics”
• ”Cooperation and coordination with other Government Departments and stakeholders in respect of imports and exports.”

Sri Lanka Customs is under the Ministry of Finance. The Director General of Customs holds the executive powers and is assisted by five Additional Director Generals.

Partnering with tobacco industry

Ceylon Tobacco Company PLC (CTC), a subsidiary of British American Tobacco (BAT), holds the monopoly of cigarette manufacturing and trade in Sri Lanka. Sri Lanka Customs, against the recommendations of the FCTC Article 5.3, continue to liaise with CTC in the areas mentioned below,.

Anti-Illicit Trade (AIT) hotline by CTC

According to the Annual Report 2015 of the Ceylon Tobacco Company PLC (CTC), information obtained from the Anti-Illicit Trade (AIT) hotline managed by the CTC “is directed to the relevant law enforcement authorities including the Sri Lanka Police and Sri Lanka Customs and Excise Department for appropriate action”. The purpose of doing so is mentioned to be a “collaboration to counter illicit trade” under the key topic and concerns. All these institutions are authorised enforcement agencies of the National Authority on Tobacco and Alcohol (NATA) Act, the main legal framework of tobacco control in Sri Lanka. However, these partnerships are not mentioned in the official websites of any of these institutions.

Partnering with Ceylon Tobacco Company PLC (CTC) to Seize/Destroy Illicit Cigarettes?

A national newspaper, reporting an incident related to the trade of illicit cigarettes, mentioned that CTC has signed a Memorandum of Understanding (MOU) with the Sri Lanka Customs to pay them LKR 1.00 per each seized illegal cigarette stick. However, in a media interview related to the same, the then State Minister of Finance, Ranjith Siyambalapitiya stated that CTC was charged LKR 2.00 per cigarette stick to destroy illicit cigarettes. Centre for Combating Tobacco (CCT) made a formal request to the information officer of Sri Lanka Customs under the Right to Information Act seeking clarification about the reported partnership with the CTC on 30 August 2024. As of 30 June 2025, no response was received from the Sri Lanka Customs. According to media, the seized cigarettes are first crushed in special tobacco crushers at the CTC headquarters in Kotahena. Then they are sent to the Holcim cement plant in Puttalam for further disposal. (Holcim is a leading cement manufacturer in Sri Lanka, which rebranded as Insee Cement in July 2016 with the acquisition by Siam City Cement, a company headquartered in Thailand). When larger amounts of cigarettes are seized, they are reportedly destroyed at Waste to Energy Thermal Power Plant in Muthurajawela The Waste-to-Energy Power Plant at Muthurajawela is the first of its kind established in Sri Lanka. It was launched on 17 February 2021 by the Ministry of Power and Energy, with the financial support of Aitken Spence PLC(a Sri Lankan logistics conglomerate operating in South Asia, Middle East, Africa and the Pacific.)

Several media outlets reported that the destruction of illicit cigarettes happens with the participation of CTC management (including Chairman and Chief Executive Officer) and higher-ranking officials of the Sri Lanka Customs (including the Director General of Customs). There was once a media report on the participation of the then State Minister of Finance Ranjith Siyambalapitiya as well.

Image 1: Media reporting the destruction of seized cigarettes with the participation of Sarath Nonis (Director General of Customs), Suresh Kumar Shah (Chairman of CTC) and Monisha Abraham (CEO of CTC).

Local media have repeatedly reported the seizure of illegal cigarettes by Sri Lankan Customs and their destruction involving CTC. Table 1 summarises the media reports published on seizure and destruction of illicit cigarettes since 2016.

Table 1: Summary of media reports on seizure and destruction of illicit cigarettes

Date	Name of the Newspaper/website	Illicit Cigarette Worth (LKR) & Number of sticks	Place of destruction	Mentions about CTC
25 December 2016	The Sunday Times	75 million, 1.3 million sticks	Not reported	Body of the article: “Ceylon Tobacco Company said they will destroy the cigarettes by shredding them, when the Customs hand over the contraband after investigations.”
19 March 2018	Daily Mirror	210 million	CTC premises	Headline: “Customs destroys illicit fags at CTC”
05 November 2019	Daily News	65 million	CTC destruction yard	Image caption: “Customs officials with the stock of foreign cigarettes which they had seized, at the Ceylon Tobacco Company destruction yard yesterday.”
19 August 2020	MENAFN	35 million, 650,000 sticks	CTC premises	Body Text: “A stock of cigarettes that were illegally imported and seized by the Customs Department was destroyed at the Ceylon Tobacco Company premises in Colombo -14 today.”
20 August 2020	Newswire	35 million, 650,000 sticks	CTC premises, Kotahena	Body Text: “A stock of cigarettes that were illegally imported and seized by the Customs Department was destroyed at the Ceylon Tobacco Company premises in Colombo -14 today.”
04 September 2020	The Morning	133.6 million, 2,353,780 sticks	Not reported	Body Text: “The consignment was to handed over to the Ceylon Tobacco Company for disposal following investigations”
05 September 2020	Daily Mirror	133.6 million	CTC Premises, Kotahena	Headline: “Customs Crush Rs.133.6Mn Worth Counterfeit Cigarettes At CTC". Body Text: “A large container load of counterfeit cigarettes allegedly smuggled into the country in the latter part of 2019, was destroyed publicly in the sophisticated crushers at the CTC head office in Kotahena, in the presence of top Customs and CTC officials.”
01 April 2022	Daily Mirror	144 million, 1 million sticks	CTC premises	Body Text: “A consignment of one million sticks of cigarettes which has been illegally imported from China was seized by Customs and was destroyed at Ceylon Tobacco Company today”. Images: Superintendent of Customs (D. K. S. Ravindra), Director (Sudesh Peter) and CEO of CTC (Monisha Abraham).
15 June 2023	Daily Mirror Online	9.7 billion	Waste to Energy thermal power generating plant in Muthurajawela	Body Text & Images: Presence of Chief of Customs (Sarath Nonis) and State Minister of Finance (Ranjith Siyambalapitiya)
	Newswire	15 billion	storage yard in Kerawalapitiya	Body Text and Images: Presence of officials of Customs including Chief of Customs (Sarath Nonis), State Minister of Finance (Ranjith Siyambalapitiya) and CTC officials including CEO (Monisha Abraham).
	economynext	15 billion	storage yard in Kerawalapitiya	Body Text and Images: Presence of Customs officials and State Minister of Finance (Ranjith Siyambalapitiya)
	Adaderana.lk	15 billion, 20 million sticks	storage yard in Kerawalapitiya	Body Text and video: Chief of Customs (Sarath Nonis), State Minister of Finance (Ranjith Siyambalapitiya) and CEO of CTC (Monisha Abraham)
16 June 2023	The Island	9.7 billion	not reported	Body Text and Images: Presence of the Chief of Customs (Sarath Nonis) and State Minister of Finance (Ranjith Siyambalapitiya) and CEO of CTC (Monisha Abraham).
	Sunday Observer	15 billion	Muthurajawela power plant	Image and the caption: “Finance State Minister Ranjith Siyambalapitiya, Customs Director General Sarath Nonis and officers of the Sri Lanka Tobacco Company at the event”.
10 August 2023	Daily Mirror	748 million	CTC premises, Kotahena	Images and Body Text: “Sri Lanka Customs destroyed a large stock of smuggled counterfeit cigarettes worth over Rs. 748 million with crushing machines of the Ceylon Tobacco Company (CTC) compound in Kotahena today. Senior Customs officials including its Director General Sarath Nonis, as well top CTC officials including Legal and External Affairs Director of British American Tobacco (BAT) Zahrah Cader were present. Images: CTC CEO (Monisha Abraham) and Chairman (Suresh Kumar Shah)<
11 August 2023	Daily Mirror	748 million	CTC premises, Kotahena	Headline: “Customs destroy Rs.748Mn worth counterfeit fags at CTC compound.” Video: Custom officials including Chief of Customs (Sarath Nonis) and CTC officials including CEO (Monisha Abraham), Chairman (Suresh Kumar Shah) and Legal and External Affairs Director (Zahrah Cader).

Awarding the status of “Authorised Economic Operator” to Ceylon Tobacco Company PLC (CTC)

On 20 January 2022, the Sri Lanka Customs launched the Compliant Economic Operator (CEO) and Authorised Economic Operator (AEO) programme, a programme to recognise the “most compliant and secure operators of the supply chain”. According to the website, this is in line with the World Customs Organization (WCO) SAFE Framework of Standards and the World Trade Organization (WTO) Trade Facilitation Agreement. The companies awarded with CEO/AEO status will receive benefits including shorter cargo release time, 24/7 clearance on request, and 50% or less import cargo examination. Ceylon Tobacco Company PLC (CTC) was among the three companies who received the CEO certificate. The Ceylon Chamber of Commerce (CCC) was the strategic event partner of the ceremony. The CCC assist the AEO program.

Image 2: Monisha Abraham, Chief Executive Officer of CTC receiving CEO Certificate at the ceremony

Sri Lanka Customs promoted the CEO/AEO programme as “an opportunity to partner with Sri Lanka Customs” on the Facebook post published on 21 January 2021 (Image 3).

Image 3: A Facebook post published by the Sri Lanka Customs to promote the CEO/AEO program.

As of July 2025, the Ceylon Tobacco Company PLC (CTC) is mentioned in the Sri Lanka Customs website as a Tier I “Authorised Economic Operator”, which is an upgrade from the CEO status (Image 4). The commissioning of this upgrade was not announced publicly. However, the only AEO certificate awarding ceremony was held on 30 July 2024 with the participation of the then State Minister of Finance Ranjith Siyambalapitiya.

Image 4: Sri Lanka Customs website featuring CTC as a Tier 1 Authorized Economic Operator status holder.

Authorised Economic Operator (AEO) Programme of Sri Lanka Customs offers a wide range of benefits to its AEO status holders that include:

• ”Expedited channels for Customs Processes”
• ”Expedited channels for document processing, dispute resolutions, advanced rulings, appeals processing, etc.”
• ”Exempting cargo from physical examinations - Maximum of 65% exemption for AEO Tier-I and 100% exemption for AEO Tier-II (subjected to approximately 5% of maximum random examination).”
• ”Priority in cargo examination yards”
• ”Reliefs in providing guarantees”
• ”Limited number of On-site Post Clearance Audits”
• ”Exemptions from routine referrals”
• ”Priority in new trade facilitation initiatives of Sri Lanka Customs”
• ”Mutual Recognition Agreements (MRAs)”
• ”AEO Relationship Officer (ARO) - An AEO Relationship Officer (ARO) will be assigned to all status holders at the level of Assistant Superintendent or above as a single point of interaction to handle legitimate Customs related matters.”
• ”AEO ID cards - For hassle free entrance to the Custom Headquarters AEO ID cards will be issued for selected employees of the company.”
• ”Self-sealing of export goods”
• ”Prioritised processing of Refunds”

Implications

Article 5.3 of the Framework Convention on Tobacco Control (FCTC) recommends that government to reject any agreement with the tobacco industry and to avoid any interactions with the tobacco industry, in order to protect public health policies from commercial and other vested interests of the tobacco industry.

News articles on the role played by the Ceylon Tobacco Company PLC (CTC) in destruction of illicit cigarettes is widely disseminated in print and online media. Tobacco companies are known for their involvement in the illicit trade in many parts of the world. British American Tobacco (BAT), the parent company of CTC is also accused of using smuggled cigarettes to increase profits by evading tax and engage new users to their brands. Please visit our page Ceylon Tobacco Misleading Shareholders: The Illicit Cigarettes Issue for more details. Partnerships between the tobacco industry and the Customs as described in this post and awarding them recognition certificates, promote the image of the tobacco industry while hiding their actual role in the illicit trade. This violates the National Authority on Tobacco and Alcohol (NATA) Act No 27 of 2006, which identifies promoting the image of the tobacco manufacturer as a “tobacco advertisement”. NATA Act prohibits tobacco advertising in all forms in Sri Lanka.

FCTC Article 5.3 further recommends governments to not to facilitate tobacco trade and manufacturing processes because there’s a fundamental conflict between tobacco industry’s interests and public health. Thus, certifying Ceylon Tobacco Company PLC (CTC) as an “Authorized Economic Operator” and providing them priority services is going against the recommendations of FCTC Article 5.3

TobaccoUnmasked Resources

• Ceylon Tobacco Company PLC (CTC)
• British American Tobacco (BAT)
• FCTC Article 5.3
• Framework Convention on Tobacco Control (FCTC)
• Ceylon Tobacco Misleading Shareholders: The Illicit Cigarettes Issue