Ambassador Ashley Wills, a staunch backer of the United Front Government's peace initiatives, was hosting a reception to bid farewell to Lt. Col. Frank Rindone, who was ending a three year tenure as Defence and Army Attache in Sri Lanka.

Lt. Col. Rindone is credited for his personal role in bringing about closer ties and co-operation between the militaries of United States and Sri Lanka. So much so, Ambassador Wills wanted to show his appreciation of this by gifting him something he had always wanted - a Magnum 450 revolver. He made a personal request to the Ministry of Defence and obtained one from the Sri Lanka Army. That came as a total surprise for Lt. Col. Rindone.

The occasion was also to welcome Lt. Col. Richard Girven, the new Defence and Army Attache, who like his predecessor, is an expert on the region. His training stints have included one with the Indian Army.

Moments after the phone call, Mr. Fernando was off. Hurriedly joining him were two others in the party - Army Commander, Lt. Gen. Lionel Balagalle and Navy Commander Vice Admiral Daya Sandagiri. They headed to "Temple Trees."

There, Prime Minister Ranil Wickremesinghe, chaired a late night crisis session on the unfolding violence in the East. Also on hand was Defence Minister Tilak Marapana.

Reports of clashes between Muslim and Tamil mobs were coming in. Measures had to be formulated to prevent escalation of violence that threatened to mar the peace process. Muslim Congress leader Rauff Hakeem, who was present felt "a hidden hand". CID and intelligence teams were detailed to probe that aspect.

Even fighter planes of the Sri Lanka Air Force were on alert. Russian built Mi-17 transport helicopters ferried a battalion of troops, who were undergoing training at Maduru Oya, to Batticaloa district. They were men from the Fourth Battalion of the Sri Lanka Light Infantry (SLLI). A further batch from another battalion moved later by road. They took up position in Valaichchenai, Ottamavadi and Kattankudi among other places where Police had already stepped up patrols.

Six months into the truce, at least three incidents in a row have been cause for concern for the Government. The first came on June 20 when Tiger guerrillas alleged that one of their leaders were assaulted at Velanai in the island of Kayts, by a group that included members of the Eelam People's Democratic Party (EPDP) and the Navy.

A two-member team - Rear Admiral L.D. Dharmapriya, Commander, Western Naval Area and M. Jurangan Savangan, Senior Superintendent of Police - have been appointed to probe the incident.

An attack on the Liberation Tigers of Tamil Eelam (LTTE) Political Office in Mutur on June 20 prompted accusations that it was carried out by a Muslim mob. Next day, Tamil mobs retaliated triggering off tension in the area. Muslims alleged that a roof of a mosque in the area was damaged.

Violence spilled over to Valaichchenai in the Batticaloa district and later to Ottamavadi and Kattankudi areas. Muslim mobs had been provoked by incidents in Mutur and they claimed a mosque in Valaichchenai was also attacked.

Details of the incidents appear elsewhere in today's issue of The Sunday Times. The events were marked by some important developments. With a curfew declared in the Batticaloa district, and as a preventive measure in Ampara district too, Police and Army were under orders to strictly enforce it. In Ampara district, the curfew was relaxed yesterday.

On Friday evening, the "Peace Secretariat" asked the head of the Sri Lanka Monitoring Mission (SLMM), Gen. Trond Furuhovde, who was in Kilinochchi, to inform the LTTE of the curfew and the Government's resolve to arrest anyone violating it. He had readily agreed to convey the message. Major General Sunil Tennekoon, General Officer Commanding Army's 23 Division in the East met with LTTE Political Wing's Vishu on Friday night. He was originally due to meet the political leader for the area, Karikalan. They agreed on immediate measures to ease tension in the Batticaloa district. Earlier, on Friday morning, Muslim Congress leader and Cabinet Minister Rauff Hakeem, spoke to LTTE Political Wing leader, Thamilchelvan , on a satellite phone. Both had agreed on the need to restore normalcy.

On Friday evening Defence Minister Tilak Marapana and Defence Secretary Austin Fernando, were both at the Operations Room at Army Headquarters personally keeping tab on developments in the East. In the backdrop of the outbreak of violence in the East, the non-working of the Joint Operations Headquarters - the joint apparatus of the tri-services and the Police - which co-ordinates security operations was indeed a great handicap for the security establishment. Since the retirement of Gen. Rohan de S. Daluwatte who was Chief of Defence Staff, no successor was appointed to act or function in that post.

This was despite a move to appoint Army Commander Lt. Gen. Lionel Balagalle, to that office until he retired from his substantive position. This was said to be in keeping with UNF policy that a head of the tri-services apparatus should be from the Army. Otherwise, Air Force Commander, Air Marshal Jayalath Weerakkody, was next in line if seniority was to be followed. He is the senior most among service commanders. In fact Gen. Daluwatte was told to hand over duties to Lt. Gen. Balagalle by Defence Secretary Austin Fernando. However, there was a last minute change.

One of the routine tasks at the JOH had been a weekly Monday meeting that examined intelligence assessments, conducted a review of the security situation and decided on measures that needed to be taken. The objectives of the JOH were thus fulfilled. The service Commanders, as well as the Police Chief, were able to brief seniors of their respective organisations on follow up action. Since Gen. Daluwatte's retirement, for more than four weeks no such meetings have been held with each service and the Police left to their own.

Unlike in the past, the Police now come under the Ministry of Interior whilst the three services remain with the Ministry of Defence.

That is whilst millions of rupees are being spent for the upkeep of the JOH. The entire staff and infrastructure of the JOH remains despite Gen. Daluwatte's departure. The JOH role would have been invaluable in co-ordinating the operations of the Army, Navy, Air Force and Police in the East to quell violence. As one senior military official in the East pointed out, "all four arms could have acted in concert. Now, one does not know what the other was doing." Needless to say complaints of inaction by Police contributing to an escalation of violence in the East, a charge endorsed by Tiger guerrilla leaders in the area, is another factor that could have been obviated.

The last minute change in not appointing anyone to act as Chief of Defence Staff follows a long- term security policy that is being formulated by the United Front Government. It wants to introduce legislation in Parliament, possibly next month, to create a more powerful joint services command. Examples of similar systems in other countries, including the United States are being studied. A Chief of Defence Staff, or any other appropriate title by which the head of this joint services command will be designated, is to be given much wider powers than at present. Such powers will include provisions for the utilisation of security forces and Police in peacetime operations.

Until an appointment is made after the creation of the new joint services command, Defence Secretary Austin Fernando, is to chair the weekly meetings. He will thus function as the de facto head.

Even before the eruption of violence between Muslim and Tamil mobs in the East, there has been underlying tension in the province over taxes imposed by Tiger guerrillas. Muslim businessmen are said to have resisted the move and adopted ways and means of avoiding payment. This is said to have caused friction on many occasions. That is in the East.

In the North, this week the LTTE took the bold step of publicly announcing details of its taxation policy. It came at a press conference given by Tamilendi, head of the Finance Division, held in Pallai on June 24. The formal move, quite clearly, is to further consolidate its "civil administrative infrastructure" ahead of the upcoming peace talks in Thailand. One of LTTE's priorities is the demand for an Interim Administration in the North and East.

Tamilendi's announcement at the Pallai press conference received wide display in Uthayan, Jaffna's leading Tamil newspaper and its counterpart printed in Colombo, Sudar Oli. The publisher of these newspapers, E. Saravanapavan, confirmed his newspapers had run the LTTE announcement. "Our reporters were present at the press conference where "duties" levied on those travelling to Jaffna (via Alpha Nine -A9 - highway) were announced," he told The Sunday Times.

Here is the public announcement on the LTTE taxes which came into effect from June 1, 2002, according to Tamilendi:

BOATS: (5 %),

FISHING EQUIPMENT:

Outboard engine (5%) Fishing nets, floaters (5%); Fishing equipment, chemicals, etc. (10%);

FARM PRODUCTS

Agriculture Inputs (5%); Production machinery (5%); Agricultural equipment/implements (10%); Poultry farm implements (5%); Poultry cage mesh (5%); Live stock food product (per kg) (one rupee);

FOOD STUFF

Milk powder (5%); Flavoured milk products (10%); Vitamins (5%); Tea and coffee (7%); Flavoured tea, coffee (10%); Wheat flour (5%); Lentils (7%); Consumable oil including coconut oil (10%); Fruits (10%); Vegetables, potatoes (15%); Processed and packaged food (15%); Soft drinks (15%); Sweets (15%); Biscuits and ice cream (15%); Chicken, meat and broiler chicken (10%); Egg (Rs. 1 each); Coconut (Rs. 1 each);

BAKERY PRODUCTS

Copra (10%); Betel (10%); Arecanut (10%); Liquor (20%); Ayurvedic and Homeopathic medicines (Legium) (25%); Beedi/cigar (20%); Cigarette (35 cts. each); Fabrics (10%); Footwear (10%); LAUNDRY AND SANITARY PRODUCTS

Soap (8%); Soap powder (8%); Shampoo (10%); Shikakai (10%); Toothpaste (10%); Brush (10%); Blue (10%); Cleaning agents (10%); Detergents (7%); Broom (10%); Ekel broom (10%); Duster (10%); Mats (10%); Home appliances (20%); Cosmetics (20%); Sports equipment (10%); Aluminium products (20%); Silver products (20%); Galvanised buckets (20%); L.P. Gas (12.5%); Furniture (20%); Lunch sheets, cellophane bags, polythene (20%); Packaging materials (10%); Coir (10%); Gunny bags; - Bags that can hold less than 50 kg. (50 cents each); - Bags that can hold more than 50 kg. (Re. 1 each) Rope (10%) Tent canvas (10%) Matchbox (25 cts. each) Equipment and chemicals for goldsmith (15%); Silver ornaments (15%); Stationery including C.R. books, foolscap and other; essentials used by students (20%); calendars and diaries (20%); Building materials (15%); Paint (15%); Plywood and other wood (5%); Electrical items (15%); Electronic items (15%); Solar panel set (12.5%); Solar torch (12.5%); Bicycle (7.5%); Motor vehicles (7.5%); Land Master (7.5%); Tractor (7.5%); Bus (10%); Industrial machinery (10%).

SPARE PARTS

Out board machine (10%); Tractor (10%); Land Master (10%); Bicycle (15%); Vehicle spare parts (15%); Bus spare parts (15%); Engine spare parts (15%); Tire tubes (15%); Sulphuric acid (15%); Batteries (15%); Rexene (10%)

FUEL AND LUBRICANTS

Lubricants - 1 litre of engine oil (Res. 5); Lubricants - Grease etc. (Res. 7.50); Kerosene (Res. 5 per litre); Petrol (Res. 5 per litre); Diesel (Res. 5 per litre); Scales (10%); Office equipment; (Excluding electrical appliances) (15%); empty of liquor and soft drink bottles (10%); Empty tins/cans (10%); Incense, joss sticks (25%); Candle (25%); Camphor (25%); Crackers (25%); Miscellaneous (15%)

EXEMPTIONS FOR GOODS THAT ARE CARRIED FOR PERSO- NAL USE WHILE TRAVELLING

1. Each family will be exempted from tax for the following goods carried while travelling.

Qty allowed

Per family

Radio or tape recorder below the value of Rs. 6500 1; Petromax 1; Hurricane lamp or bicycle spare part less than Rs. 2000 1; Torch light batteries 1; Iron box 1; Kerosene or gas cooker (only one of the two) 1; Still camera worth Rs. 35,00 1; Water heater 1; Mixer 1; Coconut oil 5 litres; Kerosene 5 litres

GOVERNMENT OFFICERS COMING ON TRANSFER CAN BRING THE GOODS THEY HAVE BEEN USING AND WILL BE EXEMPTED FROM TAX.

Persons from Sri Lanka or abroad coming to reside in 'Tamil Eelam' on a permanent basis can bring the goods they have been using and will be exempted from tax.

People carrying foodstuffs and clothes while travelling will be exempted from tax.

Note:

Persons bringing goods that will be exempted from tax have to bring with them their identity cards, any identification material, bills and receipts etc. Concessionary exemptions must not be used for business purposes,Tamilendi's announcement said.

GOODS EXEMPTED FROM TAX

1. Commodities used by students Pencil, pen, chalk, pencil sharpener, eraser, ruler, instrument box, paint box, brush and clay, Textbooks Exercise books (Except C.R. books) Drawing books, Pictures

2. Newspapers, Monthly magazines

3. Computers and accessories for education

4. Seeds

5 INFANT FOODS

Lactose 1; Lactose 2; S.M.A.; Cereal; Nestum; Infant biscuits
6. Medicines
7. Toys - reptiles, birds
8. Mineral water
9. Ice cubes
10. L.P.G. cylinder
11. Leeks
12. Carrots
13. Beans
14. Iodised salt
15. Bullock cart, horse carriage
16. Cattle to be reared
17. Medicines for cattle
18. Govt. offices and goods brought for the government. Offices
19. NGOs bringing goods for welfare of the people and for office use
20. Sanitary towels

This is the first time the LTTE has publicly announced its detailed measures of taxation. How the UNF Government would react to this, particularly in the wake of the guerrilla demand for an Interim Administration, during talks in Thailand, remains to be seen.

It is now clear that talks are not likely even in July though there is speculation about dates in August. This is after some outstanding issues have been sorted out. Main among them is an LTTE demand that its cadres be allowed to move in the north eastern seas with weapons. The guerrillas have said they would give Government advance notice of such movement. The Government, however, was not keen to allow this since it would run counter to the Ceasefire Agreement.

SLMM Chief Gen. Furuhovde, has been in Kilinochchi trying to resolve this matter. He is learnt to have rejected an LTTE suggestion that the Sri Lanka Navy also reduces the number of weapons it uses in the north eastern seas if their own request is disallowed. The LTTE was scheduled to make a sea movement today but has now put it off for Tuesday (July 2).This is again after the LTTE has agreed to the limits placed by the Government on the weapons they could carry.

If this was not heeded, a confrontation situation would have developed if a sea movement was carried out today. Now that the matter has been resolved Tuesday's movement is formally cleared.

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