Clarifying Import and Customs Clearance Responsibilities Before Supplying Government or Aid-Funded Projects

When supplying goods to Sri Lankan government bodies, development agencies or major infrastructure projects, do not assume that the project purchaser or final government user is responsible for importation and customs clearance. Before submitting a quotation, businesses should document the importing party, taxes and charges, document-signing authority, post-release handover and responsibility for exception costs in an actionable responsibility matrix.

These projects commonly involve a purchaser, final beneficiary, overseas supplier, local contractor, freight forwarder, customs service provider and bank. If responsibilities are based only on informal understanding, problems may arise once goods arrive: no party may be able to submit the required documents, tax and duty budgets may be insufficient, origin or shipping documents may not match, or no one may receive the arrival notice. For overseas suppliers, the key issue is not to assume that one party will “handle customs clearance”, but to confirm who performs each action, in whose name it is performed, and who makes decisions and bears costs when something differs from plan.

First confirm: the project purchaser may not be the importing party

Government departments, aid agencies, project implementation units and main contractors may have different roles in the procurement chain. The buyer named in procurement documents, the contractual payment party, the final user of the goods and the party named in import-related customs documents may not be the same entity.

Before submitting a quotation, suppliers should ask the purchaser or project lead to confirm the following in writing:

• Whether goods will be imported by the local project entity, main contractor or another designated party;
• Whether the overseas supplier must establish a Sri Lankan entity, appoint a local representative or engage a local service provider;
• Who will receive bills of lading, arrival notices and shipping or air freight documents;
• Who will appoint and communicate with the freight forwarder, customs service provider, port or airport personnel;
• Who will bear customs duties, import-related taxes, port charges, storage charges and potential inspection or correction costs;
• Whether the project has any special procurement, funding-source or tax-treatment arrangements, and who is responsible for obtaining and retaining the relevant written documents;
• When handover of the goods is completed, and how responsibility for loss, demurrage and insurance is allocated before and after handover.

If the purchaser can only state that the project is “eligible for a particular arrangement” or that “the local partner will handle it”, but cannot identify the responsible party, required documents and confirmation process, the supplier should not build the relevant concession, exemption or clearance responsibility into its quotation assumptions.

Use a responsibility matrix to separate five key areas

During quotation confirmation, contract negotiation or shipment preparation, it is advisable to prepare a responsibility matrix for confirmation by the project purchaser. The matrix does not replace the contract or professional advice, but it can help parties identify gaps at an early stage.

Area	Questions to clarify	Examples of responsible parties
Importer arrangement	In whose name will import-related procedures be completed, and who has authority to sign or authorise documents?	Local buyer, project implementation unit, main contractor or its designated entity
Document preparation	Who provides, reviews and submits the commercial invoice, packing list, transport documents, origin documents, technical materials and project documents?	Overseas supplier and local import-responsible party sharing responsibilities
Taxes and costs	Who pays taxes, service fees, port or airport charges, storage costs and exceptional expenses?	The buyer, import-responsible party or project party specified in the contract
Customs clearance execution	Who appoints the freight forwarder or customs service provider, and who gives final confirmation of declaration content?	The import-responsible party or its authorised agent
Arrival and handover	Who receives, inspects and signs for the goods, and when is delivery considered complete?	Project warehouse, main contractor or final user

The matrix should avoid general wording such as “the customer is responsible for customs clearance”. A more workable approach is to separate the actual actions: who confirms the product description and quantity, who provides project procurement documents, who pays charges before release, who decides on amendments or supplementary documents when records do not match, and who bears additional costs caused by delay.

Four document relationships to check before quoting

Supply documentation for government or aid-funded projects often includes tender documents, purchase orders, supply contracts, technical specifications, payment documents and shipping documents. If they are inconsistent, both customs clearance and payment may be affected.

1. Procurement documents and contractual delivery terms

Check whether requirements in the procurement documents regarding delivery location, delivery method, installation responsibilities, spare parts, training and acceptance are aligned with the contract provisions on transport, insurance, transfer of risk and customs clearance responsibilities. In particular, “delivery to the project site” does not necessarily mean that the overseas supplier bears all import procedures. The allocation of responsibilities should be expressly stated.

2. Contract value and shipping document values

The goods description, quantity, currency, price components and payment terms on the commercial invoice should correspond to the contract, purchase order and actual shipment. Where equipment, spare parts, free replacement items, samples or service fees are presented separately, the parties should confirm in advance how they will appear in the documents and who will explain their commercial background if required.

3. Technical materials and declaration descriptions

For equipment, instruments, communications products, medical products, energy facility components or other technically complex goods, prepare product descriptions, models, intended use, quantities and necessary technical materials that are consistent with the contract. Overseas sales teams should not simplify product names on their own, as this may create differences between the contract, invoice, packing list and actual goods.

4. Project eligibility documents and import documents

If the project party refers to aid funding, government procurement, project certificates or special tax arrangements, the party responsible for importation should explain which documents are required for the import process, who will confirm them with the relevant authorities or appointed professional service providers, who will retain the originals, and how expiry or changes will be handled. Suppliers should retain written instructions received and maintain version records.

Do not treat tax arrangements as a default assumption

Some projects may have specific funding, procurement or tax-treatment arrangements. However, suppliers should not assume that goods will be exempt from tax, subject to reduced charges or released quickly simply because of the project name, funding source or final user. Whether an arrangement applies commonly depends on the project documents, scope of goods, importing entity, declaration method, completeness of documents and the approach taken by the relevant authorities.

For this reason, tax and customs clearance assumptions can be stated separately in the quotation and confirmed by the buyer. For example: whether the quotation includes taxes and charges, whether it includes local customs clearance services, how exceptional costs will be approved, and how storage or demurrage costs caused by the buyer's late provision of documents will be handled. For matters that cannot be confirmed, suppliers may state that they are subject to written confirmation and actual implementation requirements, rather than making fixed commitments that cannot be supported.

Hold one document and arrival coordination meeting before shipment

Before goods depart the port or airport of origin, it is advisable for the overseas supplier, project procurement contact, import-responsible party and local freight forwarder or customs service provider to conduct a document review. The purpose is not to discuss the process in general terms, but to confirm the person actually responsible for each task.

The review should cover:

• The transport method, expected arrival window and recipient of arrival notices;
• The consignee and notify party shown on the bill of lading or air waybill, including their contact details;
• Final versions of the commercial invoice, packing list, contract and purchase order;
• Technical materials, origin documents and project-related supporting documents;
• The appointment status of the local customs service provider and document submission method;
• Payment arrangements for taxes, service fees and exceptional costs;
• Escalation contacts and decision-making authority in the event of inspection, supplementary document requests, port changes, delays or damage;
• Receiving, unloading, inspection and sign-off arrangements at the project site.

After the meeting, prepare written minutes and have them confirmed by the responsible parties. For cross-border projects, these minutes are often more useful than a series of individual emails for internal handover and exception tracking.

Common mistake: confusing local coordination with legal responsibility

Overseas businesses often appoint a local team to coordinate with freight forwarders, collect documents or support communications. This does not automatically change the contractual import responsibility, nor does it replace work that should be completed by the importing party, appointed customs service provider or appropriately qualified professional institution. Businesses should distinguish between the roles of project coordinator, document provider, import-responsible party, customs clearance executor and cost payer. This helps avoid a single contact person making commitments without the necessary authority.

MMD Business Support can assist businesses in mapping supply processes, preparing responsibility checklists, coordinating local resources and managing communication points. Company registration, tax, legal, immigration and specific customs clearance matters should be handled by appropriately qualified professional institutions in accordance with project documents and actual circumstances.

Related reading includes “How to Estimate Duties, Taxes and Additional Clearance Costs Before Pricing Imported Products” and “When Import Declarations, Contracts and Payments Do Not Match: How Businesses Can Build a Review Process”.

This content is provided for general information only and does not constitute legal, tax or immigration advice. Specific requirements are subject to the latest guidance of the relevant Sri Lankan authorities and appointed licensed professional institutions.