Description
Five employees of the Department of Motor Traffic (DMT) and two others have been indicted for their involvement in a vehicle registration scam in Sri Lanka. The Commission to Investigate Allegations of Bribery or Corruption (CIABOC) has initiated legal proceedings against the seven individuals for fraudulently registering over 400 imported vehicles before they were cleared. Initially, the national Audit Office issued a special audit report regarding the fraudulent registration in September 2023. Later on, the CIABOC filed a legal proceeding against the 7 individuals including 5 DMT Employee for the involvement of unauthorized registration for around 400 vehicles without proper custom clearance.
According to the Motor Traffic (Amendment) Act No. 8 of 2009, the Commissioner-General of Motor Traffic has the authority to refuse registration of a vehicle if it fails to comply with prescribed safety standards, has been illegally modified, or has been imported with forged documents. However, the accused individuals circumvented these regulations, leading to the unlawful registration of vehicles.
As of February 2024, CIABOC had uncovered specific details about 156 of the 400 vehicles, many of which were classified as luxury cars. The Commission secured court orders to seize seven vehicles from their current owners and hand them over to Sri Lanka Customs.
What is the corruption
The DMT employees registered vehicles without the necessary customs clearance, which is a violation of the Motor Traffic (Amendment) Act No. 8 of 2009. This act prohibits the registration of vehicles that do not conform to approved standards or lack proper documentation
The illegal registrations resulted in substantial losses in tax revenue for the government. Estimates suggest that the misuse of the registration process led to losses amounting to millions in potential customs duties and taxes that should have been collected
Some of the vehicles registered were luxury cars, and the fraudulent activities included altering chassis and engine numbers to facilitate the registration of illegally imported or assembled vehicles. This manipulation allowed for the issuance of false motor vehicle registration certificates
The fraudulent registrations not only bypassed customs regulations but also deprived the government of revenue that could have been generated through legitimate vehicle imports and registrations
The illegal registrations have reportedly caused a loss of around Rs. 3 billion to the government due to unpaid customs duties and taxes associated with these vehicles.
Monetary value involved
The Commission to Investigate Allegations of Bribery or Corruption (CIABOC) confirmed that approximately 400 vehicles were fraudulently registered without proper customs clearance. Many of these vehicles were luxury cars, which carry high import duties and taxes (sometimes up to 300% of the CIF value). According to CIABOC’s official statement, “This illegal registration has caused a loss of Rs. 3000 million to the Government” (Source: Causing financial loss to the government by fraudulent registration of uncleared vehicles)
What has been done
CIABOC has formally filed charges against the seven individuals for their involvement in the unauthorized vehicle registrations
Court Orders for Vehicle Seizures.
What can be done
Government and Regulatory Authorities:
Strengthen oversight mechanisms within the Department of Motor Traffic (DMT) by introducing automated and transparent digital registration systems linked directly with Sri Lanka Customs to prevent unauthorized entries.
Enforce stricter internal audit and compliance processes to detect irregularities early, including regular cross-checks between DMT and Customs data.
Prosecute all officials and intermediaries involved in fraudulent vehicle registrations to demonstrate zero tolerance for corruption.
Citizens and Media can,
Demand transparency by using the Right to Information (RTI) Act to request data on vehicle registrations and related government revenue.
Report on suspicious practices such as unregistered dealers or unusually fast registrations through whistleblowing channels.
Support independent journalism that investigates misuse of authority and public funds.
Links
https://www.dailynews.lk/2024/02/12/admin-catagories/breaking-news/393362/seven-in-vehicle-registering-scam-indicted/#google_vignette
https://www.onlanka.com/news/ciaboc-takes-legal-action-against-dmt-employees-for-unlawful-vehicle-registrations.html
https://www.themorning.lk/articles/m2Dqeor0CawWMns2yYGK
https://www.themorning.lk/articles/V3FWyDfhIX0WKUDM8ICy
https://www.dailymirror.lk/breaking-news/Legal-action-taken-against-Motor-Traffic-Department-staff-for-fraudulent-vehicle-registration/108-276771
https://www.themorning.lk/articles/Y7YMnk8xf30fclX3s1Iw
https://www.themorning.lk/articles/m2Dqeor0CawWMns2yYGK
https://ciaboc.gov.lk/media-centre/latest-news/1215-causing-financial-loss-to-the-government-by-fraudulent-registration-of-uncleared-vehicles
