• Luxury vehicles registered illegally amid import ban
• Sri Lanka loses millions in tax revenue
• Transport Minister confirms special probe

Amid a nationwide ban on vehicle imports, a massive fraud has been uncovered by the National Audit Office (NAO) at the Department of Motor Traffic (DMT).

The fraud has resulted in substantial financial losses due to alleged fraudulent entries of chassis and engine numbers for illegally-imported or assembled vehicles and issuance of false motor vehicle registration certificates.

Accordingly, it has been revealed that six new luxury vehicles, unlawfully brought into Sri Lanka, have been allegedly registered under the DMT. 

These registrations had replaced the records of vehicles originally designated for foreign diplomats and Non-Governmental Organisations (NGOs) and had been exempt from duties, a special audit report issued by the NAO has revealed.

As further revealed in the audit report, these earlier vehicles had been de-registered and re-exported following the diplomats’ resignations. 

DMT officials have been accused of entering chassis and engine numbers of another set of six luxury vehicles to replace the de-registered ones, subsequently issuing registration certificates to different individuals.

According to a special audit report issued by the NAO in September 2023, it was discovered that tax revenue amounting to Rs. 122 million, which should have been collected by Sri Lanka Customs, had allegedly been misused due to the illicit registration of vehicles at the DMT. 

These vehicles had been illegally imported or assembled in Sri Lanka without a valid Customs Declaration (CusDec) from the Sri Lanka Customs data system, indicating that import duties had not been not paid as per the Customs Ordinance.

The audit has further revealed that upon examining the information concerning the registration of vehicles with chassis numbers closely resembling the chassis numbers in question, it had been noted that incorrect data had allegedly been entered in the registration certificates for these vehicles. This discrepancy has taken into account the comparative production year and registration dates.

The DMT data system had faced challenges in verifying the information regarding the dates of these allegedly-fraudulent registrations, with the issue arising when dates of transmission of this data to the eRevenue License System (eRL) had been examined. 

Subsequently, the dates of data transmission to the eRL system and the date the DMT data system had been updated had been compared, leading to the observation that certain users had fraudulently contributed to the modification of the DMT data system, the report revealed.

Additionally, it has been revealed that registration certificates had allegedly been issued for pre-registered motor vehicles, whose chassis numbers had been changed to match those of other unregistered motor vehicles.

Ninety-nine registered motorcycles, consistently licensed in previous years, have had their chassis and engine numbers altered, with fraudulent data of other illegally-imported motorcycles being entered. 

Subsequently, new registration certificates had allegedly been issued for the existing registration numbers. Officials at the DMT responsible for system updates had then removed the existing data and fraudulent changes from the vehicle registration system.

Furthermore, a total of 91 motorcycles had been allegedly registered and issued new (fake) registration certificates by entering the chassis and engine numbers of illegally-imported motorcycles. This had resulted in a loss of Rs. 55,207,475 in Customs duties due to the importation of motorcycles without a valid CusDec. 

Moreover, fines and surcharges, as stipulated by Cabinet Paper No.AMP/16/1307/709/061 dated 5 July 2016, and the Cabinet decision dated 7 September 2016 pertaining to the registration of illegally-imported and unregistered motorcycles, had not been collected.

Consequently, the Government had lost Rs. 21,476,000, including a surcharge fee of Rs. 21,285,000 and a new registration fee of Rs. 191,000.

Similarly, changes had been made to the engine numbers and chassis numbers of 31 vehicles registered under different classes at the DMT, with data related to fraudulently-imported motorcycles entered. 

These fraudulent changes had later been removed from the vehicle registration system by responsible officials. 

The same fraudulent practices had been observed with 29 registered vehicles for other classes, resulting in the issuance of new motor vehicle registration certificates using fraudulent data.

Moreover, 15 pre-registered motor cars have had their chassis and engine numbers changed to match those of other illegally-imported or assembled cars, leading to the fraudulent issuance of vehicle registration certificates.

Additionally, the engine numbers and chassis numbers of four previously-registered motorcycles with outstanding revenue licence fees had been changed to those of four other illegally-imported motorcycles in 2022, resulting in the fraudulent issuance of motor vehicle registration certificates, the audit revealed.

Attempts to contact Commissioner General of Motor Traffic Nishantha Anuruddha Weerasingha were futile.

However, Transport Minister Dr. Bandula Gunawardana confirmed to The Sunday Morning that a special investigation was currently underway at the DMT regarding the findings of the audit report.