Financial Times

Dire need to beat quota rackets
A top industry professional has urged government authorities to take quick action to foil a quota racket triggered by panic over the end to textile quotas. K.C. Vignarajah, a former chairman of the Ceylon National Chamber of Industries, said urgent steps are needed to retain the good name of the genuine apparel manufactures/ exporters as a serious situation has been faced by genuine manufacturers of sensitive categories of Knitted T. Shirts (Quota Cat 338/9), Pants (Cat 347/8) etc. due to the actions of quota racketeers.

He has suggested that the following urgent steps be taken by the Ministry of Industry, in order to salvage the situation and foil the wiles of quota brokers /racketeers, who are expecting to rake in hundreds of millions of rupees, while bankrupting genuine manufacturers.

* (a) Obtain affidavits from all those who hold quota in the sensitive categories, declaring that they have all the raw material and accessories, required to manufacture and fullfil the export quota entitlements they hold and prohibit quota transfer. Failure to export should attract a penalty of Rs. 50 per garment not exported.

(b) Prohibit third party shipment. A strictly enforced penalty of 20% of FOB value should be imposed for violation.

* Release quota to those with manufactured goods already in hand to save the country of huge airfreight bills, when the country needs to save every cent of foreign exchange.

* Arrange with the shipping lines to have as many fast vessels as possible to the US, leaving Colombo on January 1, 2005, instead of the earlier practice of arranging the "quota vessels of December 31".

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