The Financial Intelligence Unit (FIU) of the Central Bank of Sri Lanka and the National Gem and Jewellery Authority (NGJA) have jointly called on all gem and jewellery dealers to strengthen compliance with anti-money laundering regulations by properly identifying customers and appointing Compliance Officers for their businesses.

According to the FIU, every gem and jewellery dealer is legally required to appoint a Compliance Officer under Sri Lanka’s anti-money-laundering and counter-terrorist-financing framework.

The officer will be responsible for ensuring that all transactions adhere to financial regulations and that customer verification procedures are strictly followed.

Dealers must collect key information from customers during transactions, including their full name, address, occupation, identification documents, date of birth, nationality, source of funds, purpose of the transaction, and contact details. Corporate clients are also required to disclose the beneficial owner of the transaction.

The FIU warned that failure to comply with these requirements could result in penalties. It added that proper customer identification helps prevent money laundering and other financial crimes within the gem and jewellery trade.

Businesses can obtain the Compliance Officer Declaration Form from the FIU website (fiusrilanka.gov.lk) or by contacting the NGJA. Completed forms should be submitted to either the National Gem and Jewellery Authority or the Financial Intelligence Unit of the Central Bank. (Newswire)

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PM Harini Amarasuriya says that although Sri Lanka has already gained international recognition for gems and jewellery, exports have not grown to the expected level.

The Prime Minister said that the government is working to establish stable policies to enable the country to capture the international gem and jewellery market.

She made these remarks while addressing the opening ceremony of Gem City Ratnapura – 2025, an International Gem and Jewellery Exhibition aimed at taking Sri Lanka’s gem and jewellery industry to the global stage.

According to the Prime Minister’s Office, the Gem City Ratnapura – 2025 event will be held on 15, 16 and 17th August at the Grand Silveray Hotel, Pelmadulla. 

The exhibition is organized by the National Gem and Jewellery Authority with the aim of  seeking the position of Sri Lanka among the world’s leading gem and jewellery markets alongside showcasing a wide variety of gemstones, gem and jewellery mining and processing techniques, laboratory services, as well as training and educational opportunities in the sector.

Addressing the inauguration ceremony, PM Harini Amarasuriya said Sri Lanka thrives worldwide for its gems, and a significant portion of these are found in the Ratnapura District. 

“However, we must question whether Ratnapura has truly received the recognition it deserves. The contribution made to the national economy by exporting high-quality gems from Ratnapura’s gem industry is considerable. Yet, we have still not reached the maximum potential export income from the gem and jewellery sector. Inconsistent policies have hindered the growth of this industry. The government is committed to establishing the necessary stable policies to achieve the industry’s ambitious export revenue goals. I extend my gratitude to the representatives from the United States, India, China, Switzerland, Thailand, and Pakistan for participating in this exhibition. I also invite them, and others who place trust in our national policies, to continue joining us in advancing gem and jewellery exports,” she said.

Addressing the event, Minister of Industry and Enterprise Development, Sunil Handunneththi, said a range of new policies, such as developing the diamond sector and introducing new laws to allow the direct export of rough gemstones, are already being prepared to help the gem and jewellery sector reach the challenging target of USD 1 billion in expected export revenue.

 The event also saw the launch of Sri Lanka’s first government-owned gem and jewellery trade website, www.gemcityratnapura.com, equipped with the latest GovPay facility. (Newswire)

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President Ranil Wickremesinghe has expressed his commitment to propel significant advancements in Sri Lanka’s gem industry within the next two years. 

According to the President’s Media Division (PMD), to achieve this goal, the President announced that he intends to implement a new program. 

Emphasizing the program’s positive impact on both the national economy and industry stakeholders, the President highlighted plans for extensive modernization within the gem and jewellery sector.

Underlining the program’s positive impact on the national economy and industry stakeholders, the President not only stressed the importance of offering tax concessions but also highlighted the transformation of the gem and jewellery industry into a key contributor to the country’s foreign exchange earnings. 

The President made the remarks during the opening ceremony of the “Gem Sri Lanka 2024” Gem and Jewellery Exhibition organized by the China Fort Gems and Jewellery Trade Association today (Jan 11). 

The exhibition, hosted at the Bentota Cinnamon Bay Hotel, will run until January 13. President Wickremesinghe, inaugurating the event, actively participated in exploring trade stalls and engaging in friendly conversations with gem industrialists to better understand their challenges. The China Fort Gems and Jewellery Association presented a souvenir to the President during the occasion.

Addressing the ceremony, President Wickremesinghe emphasized the need for a new economic system in the country that is geared towards exports, aiming to generate foreign exchange and foster economic growth.

“Welcoming delegations from around the globe to this gathering is truly a pleasure. Beruwala, renowned as the hub for gems in Sri Lanka, takes pride in hosting this distinguished audience. Our special focus on advancing the gem industry reflects our commitment to its development, a sentiment echoed in my recent budget speech where I highlighted the formulation of a comprehensive policy framework.

In the forthcoming two months, diligent efforts are underway to craft this policy framework, signalling a significant stride toward the prosperity of our nation’s gem industry. Sri Lanka, with its vast potential in gems, stands poised for remarkable progress.

As Ian Fleming once immortalized diamonds by saying “diamonds are forever,” we proudly affirm that Sri Lanka’s gems, including the enduring sapphires, share a timeless legacy.

Reflecting on the global landscape, it’s notable that the Chinese market, particularly represented by the Shenzhen Jewellery Association, is still in its early stages. Recalling my visit to Shenzhen in 1979, where there was only a paddy field, witnessing its transformation into a diverse economic powerhouse today is remarkable.

However, there is a reciprocal learning opportunity. The government’s focus on gem re-export, value addition, and augmenting foreign exchange inflows necessitates a modernized gem industry. Recognizing the associated challenges, it’s crucial to address them strategically. While tax relief has been a customary request, merely granting concessions without substantial sectoral growth is inadequate. The key lies in concurrent development and strengthening of economic foundations for everyone involved in the industry, alongside fostering knowledge enhancement for gem polishers,” he said.

The President further strongly opposed the proposal to grant tax exemptions merely for individuals to amass personal wealth. 

“My objective is to foster substantial growth in the industry over the next two years, with a particular focus on benefiting the communities in Beruwala, Ratnapura and Laggala. This approach should not only contribute to the national welfare but also ensure widespread prosperity within the industry.

“Reflecting on the challenges our nation faced two years ago, including a severe economic downturn, fuel shortages, fertilizer scarcity and difficulties in obtaining food, we have successfully overcome those hurdles. The restoration of essential services, facilitated by foreign exchange, marks a significant achievement. However, it’s crucial to note that this foreign exchange is sourced from institutions like the World Bank and the support of nations, such as the American government’s provision of fertilizers in 2022.

“While such external assistance has been valuable, relying on it consistently is not a sustainable approach. The country must actively strive to earn the foreign exchange it requires. This necessitates the development of a robust export-oriented economy. Leveraging the potential for high income, particularly from the gem industry, we must transition towards economic self-sufficiency and reduce dependence on external aid. Merely making promises is insufficient; a proactive strategy is needed to create a new economy that can generate foreign exchange for the country’s sustained growth,” he said.

The President also pointed out that there exists the potential for revenue generation within the tourism industry. 

“Spanning from Beruwala, Aluthgama to Galle, the fishing industry in this region is a global player, competing on an international scale. This model should extend to the rest of our nation’s planning.

“As we propel forward as a nation, the imperative is to secure foreign exchange through our collective endeavours. While words may be spoken, tangible outcomes are indispensable.

“Setting a target of 2% economic growth for the current year, albeit modest, it’s crucial to recall that the country’s economy contracted by a staggering minus 7% in the preceding year. We are now on a gradual upward trajectory, with an ambition to elevate economic growth to 5% by 2025. Subsequently, we aim for a more ambitious target of 7% – 8%. Executing these plans meticulously could facilitate the recovery of the country within a span of five years,” he said.

Stating that presently, citizens across the country grapple with the challenge of the rising cost of living, the President said he firmly believes that a collective understanding of the country’s actual situation can pave the way for overcoming this predicament within the next two years.

“The advantage of shaping the future of our nation lies with the youth community. It is crucial to emphasize that we are diligently crafting a robust economy for the prosperity of the upcoming generation,” he added.

Also speaking at the event, State Minister Chamara Sampath noted many individuals within the gem and jewellery industry currently grapple with tax-related issues. 

“The President is actively addressing and working towards resolving these challenges, leveraging his role as the finance minister, which uniquely positions him to engage in discussions about taxes. There is optimism that the President’s intervention will not only resolve issues within the industry but also elevate the gem sector to a significant contributor to foreign exchange earnings.

“While some individuals in “suits” aspire to assume the presidency, their ability to offer solutions to these specific problems remains limited. The President stands as the sole figure capable of providing effective resolutions to the issues at hand.

“Reflecting on the past, the country faced a situation where diesel was unavailable, prompting people to protest by barricading petrol stations. The President successfully navigated and resolved this crisis. With the commitment to steering the nation to a better state, the President assures that the country will be handed over in an improved condition,” he added. (NewsWire)

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The National Gem and Jewellery Authority anticipates generating an annual revenue of US$ 2 billion by the year 2025 through the export of gems.

President and Chief Executive Officer of the National Gem and Jewellery Authority Viraj de Silva highlighted that during the initial 7 months of this year, they have already amassed a revenue of US$ 312 million through gem exports. 

He stated that they further project that by the end of this year, the earnings will reach US$ 500 million.

Viraj de Silva also focussed attention on the implementation of a programme in accordance with President Ranil Wickremesinghe’s directives, aimed at curbing the illegal export of gems, adding that illegal export has posed a significant challenge to achieving the US$ 2 billion target.

Consequently, Viraj de Silva indicated that necessary measures will be promptly taken to facilitate direct gem purchases by foreign buyers through auctions within the country.

The Chairman of the National Gem and Jewellery Authority made the remarks while participating in the ‘101 Katha’ programme produced by the Presidential Media Division.

“The Gem and Jewellery Authority Act governs a range of regulatory tasks, spanning from authorizing mining permits to overseeing the export of gemstones. Our regulatory responsibilities encompass processes such as auctions, sales and international shipments. All of these endeavours are geared towards benefiting the nation. Furthermore, we undertake both local and international promotional initiatives, with a strong emphasis on maximizing foreign exchange inflow into the country.

“With six regional offices scattered across the nation, the Gem and Jewellery Authority actively monitors activities through these branches. Notably, gems discovered within mines cannot be sold arbitrarily; rather, they must be presented at public auctions in accordance with the nation’s legal stipulations. This practice ensures transparency and adherence to the law.

“From the proceeds of gemstone sales, the government receives a share amounting to 2.5%. Recent events have showcased substantial growth in mining activities, resulting in the sale of a gem worth a remarkable Rs. 400 million. This upsurge in mining efforts has contributed to a notable increase in the revenue generated from gem sales,” he said.

Viraj de Silva pointed out that stringent conditions are placed on the operation of gem mines. “Any engagement in illegal mining activities can lead to the revocation of licenses. Furthermore, the exportation of gemstones is subject to specific protocols. Following the discovery of a gemstone, it must undergo a process of polishing and subsequent auctioning under the auspices of the Gem and Jewellery Authority.

“Currently, an investigation is underway to identify instances where activities are being conducted without the approval of the Gem and Jewellery Authority. President Ranil Wickremesinghe has also issued directives to delve into this matter, reflecting the seriousness with which these issues are being addressed.

Between January and July of this year, the export of gems generated a substantial income of US$ 312 million. However, there exists untapped potential for even greater financial gains,” he said.

Viraj de Silva further stated that in contrast to other sectors, the Gem and Jewellery Authority has achieved an impressive export growth rate of 34%, adding that notably, this growth rate surpasses that of the tea and garment industries, as evidenced by reports from the Central Bank.

“Gems discovered in this manner are the collective property of the entire nation. It is imperative that the country receives their rightful value. This could prove invaluable in alleviating the current economic challenges.

“The export of gems has the potential to yield an average annual income of US$ 2 billion. Sri Lanka should aspire to become a prominent hub for gem trade on the global stage. Our ongoing efforts reflect this ambition, with the projected income from the gem industry expected to reach US$ 500 million by year’s end.

“Expanding the number of exporters engaged in these activities is a crucial endeavour. Presently, everyday citizens participate in this industry. We have initiated a program aimed at expanding the gem export process, inviting those interested in the field to join us in this endeavour. Our primary objective is to identify buyers and cultivate new markets,” he added.

Furthermore, proactive measures have been implemented to prevent irregularities within the Gem and Jewellery Authority. 

“To address the potential for financial improprieties arising from long-term officer tenure, a formal transfer policy has been introduced. Additionally, the integration of accounting software has effectively eliminated any room for financial misconduct.

“It is also within our institution’s responsibility to validate the quality of gold items owned by Sri Lankan citizens. Thus, individuals have the option to visit our office and assess the quality of their gold possessions. The certification bestowed by the Gem and Jewellery Authority significantly enhances the value of one’s gold items,” Viraj de Silva added. (NewsWire)

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