Hon. Kathiravelu Shanmugam Kugathasan

## Summary Hon. Kugathasan welcomed the Government's decision to increase outward investment limits, characterising it as a positive shift from crisis management toward growth-oriented economic policy. He argued, however, that this measure alone is insufficient and must be part of broader reforms to position Sri Lanka as a competitive business and financial hub. Specifically, he called for the introduction of "automatic route" approvals for investments, citing India and Singapore as models, and emphasised that legislative changes must be accompanied by institutional reforms to achieve a genuinely open economy.

## Summary Hon. Kugathasan delivered a detailed speech supporting the regulation gazetted on 17 February 2026 under Section 22 of the Foreign Exchange Act, No. 12 of 2017, which partially relaxes restrictions on outward remittances while maintaining safeguards on foreign exchange reserves during Sri Lanka's post-crisis recovery. He outlined the key provisions, including investment limits of USD 500,000 for listed companies and USD 150,000 for unlisted companies, and noted that this marks a significant shift from the full suspension of Outward Investment Accounts that was in place from 2020 to 2024. The speaker contextualised the regulation by comparing the 2017 Act with the predecessor Exchange Control Act of 1953, highlighting the shift from a punitive, state-controlled regime toward a liberalisation-oriented framework. He also identified several ongoing concerns — including unpredictability caused by frequent temporary orders, mandatory export proceeds conversion, and investment caps he considered insufficient — and benchmarked Sri Lanka's framework unfavourably against India's FEMA regime and Singapore's fully liberalised system, calling for further reforms to position Sri Lanka as a regional financial hub.

## Summary Hon. Kugathasan spoke in support of two sets of regulations under the Motor Traffic Act — the Motor Traffic (Expressway) Regulations and the Motor Traffic (Drug Use) Regulations — gazetted under Nos. 2463/04 and 2407/52, framing them as necessary updates to address procedural gaps in road safety law. He outlined key provisions, including mandatory seat belts for all passengers and seats on expressways, shared responsibility between drivers and vehicle owners for compliance, and a structured framework for drug-impaired driving detection requiring approved saliva screening devices and mandatory laboratory confirmation — contrasting these with the more subjective and procedurally limited 1979 and 2011 legislative frameworks. He acknowledged concerns raised by the Private Bus Owners' Association regarding the cost and technical difficulty of retrofitting approximately 6,000 pre-2011 buses, as well as questions about the accuracy of saliva tests and potential for police misuse of appearance-based suspicion criteria. He proposed remedial measures including subsidies for safety equipment, transition assistance for non-compliant bus operators, legal clarification distinguishing prescription drug use from illegal drug use, and mandatory body-worn cameras for officers conducting roadside drug tests.