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When only parts of the statement are taken and published under different headlines, the meaning is sometimes distorted. This is a fact-check we conducted on a post that was published this way.
Social Media Posts:
“Severe penalties for selling imported goods at a lower price than Sri Lankan-made goods”
This note published under the theme states that Minister of Industry and Entrepreneurship Development Sunil Handunnetti stated that he will investigate imported goods sold in the country at lower prices than local products and take strict legal action against them.
It states that the Minister made this statement during an inspection of the Matale Industrial Estate and that it is the responsibility of local industrialists to provide information on products such as shoes, tiles and matchboxes that are illegally imported into the country and sold at low prices.
Similarly, a series of satirical posts were created using the photographs from the post above and the theme “Severe penalties for selling imported goods for less than Sri Lankan-made goods.”
We took steps to investigate the facts of this matter, considering the requests we received from readers regarding the authenticity of this.
Fact Check:
We first checked whether this news was reported by the mainstream media, and several media outlets reported it in this way and this way. When examining those reports, it seems that the statement “Severe penalties if goods imported from Sri Lanka are sold for less than goods produced in Sri Lanka” is misleading. Accordingly, with the aim of further investigating this matter, we took steps to investigate what the Minister actually stated during an inspection of the Matale Industrial Estate.
What is the minister really saying?
Participating in a special inspection tour of industrial estates in the Matale district, the Minister said that if any imported product is sold in the local market at a price lower than the cost of production in the relevant country, local industrialists can file a complaint with supporting evidence. If such complaints are made, the matter can be investigated through the anti-dumping Act.
“There are some goods. There are goods imported from China and Thailand. Some of them are cheaper than the cost in that country, even after 100% tax, or they are undervalued or illegally imported. Then we can go to the country of origin and complain. This is a threat to our goods, but a complaint must come with evidence.”
Accordingly, the Minister emphasizes that there is the possibility of taking action through the Anti-Dumping Act to protect local entrepreneurs and consumers from substandard imported goods.
The Minister further explained the facts with examples and said that even though the government imposes a 100% tax on certain goods, the local market sells those goods for less than the applicable tax. It is not possible to sell a product that is imported into the country with proper standards and proper procedures in such a way.
“Even if we tax them 200%, they are cheaper than our pair of shoes. There are tiles, lighters, and matchboxes that are 100% identical. There are lighters worth 2 cents, and they are cheaper than the tax we pay.”
The Minister’s detailed explanation of the relevant matter was also posted on the Minister’s official Facebook page. The Minister explained that investigations can be carried out through the Anti-Dumping Act to protect local entrepreneurs and consumers from low-quality imported goods.
Sunil Handunnetti, Minister of Communications’ Media Secretary
Meanwhile, when we inquired, the Minister and the Media Secretary also stated that the Minister clearly stated that the matter was about substandard goods that are illegally imported into the country and sold in the local market for less than the cost of producing the goods in the relevant country. It was not about imported goods that are of the proper standard and imported through the proper procedure. The Media Secretary also stated that some social media posts have reported the Minister’s statement in a way that misleads society.
What does Anti-Dumping Act really mean?
The Minister states the legal point made by the Anti-Dumping and Countervailing Duties Act No. 2 of 2018, which is implemented under the Department of Commerce. This Act is not intended to impose penalties on all low-priced goods, and it is an evidence-based procedure with a limited scope. Accordingly, in order to take legal action, the following three conditions must be met.
- The product is dumped, meaning it is sold at a price below the normal price in the country of origin, not just below the price in Sri Lanka.
2. The dumping has caused material injury to the domestic industry in Sri Lanka.
3. A clear link must be shown between the dumping and the injury.
Furthermore, according to the Act, if the evidence is insufficient or the dumping value is very small, the investigation should be stopped. Meanwhile, the Act was amended in 2024 and the investigation process was further refined, meaning that the mere difference in price between an imported product and a domestic product is not a reason to take legal action. For this, an official complaint, evidence and a full investigation are required. The Minister also mentions this in his explanation. However, the posts circulating on social media have completely misrepresented this legal situation and have stated the facts in a way that suggests that selling any imported goods at a low price is punishable. Accordingly, the Minister does not state the same thing as stated in the social media posts.
Why can imported goods be cheaper than local products in Sri Lanka? Price differences that occur for legitimate reasons.
This is another significant fact that is not mentioned in the posts circulating on social media, or in the media reports quoting the Minister’s statement. There is a possibility that goods imported through proper procedures may be sold at a lower price than those produced locally. This is because Sri Lanka lacks production capacity in many industrial sectors and is unable to produce certain goods at competitive prices. Here are some examples to illustrate this.
Household electrical appliances (televisions, air conditioners, refrigerators):
Electrical appliances are not normally manufactured in Sri Lanka and are imported under brands such as Hisense, Samsung, and LG. Since these appliances are manufactured in large quantities, the cost per unit is reduced by 30–50%. Accordingly, these items can be obtained at competitive prices, or even lower, even though import duties are in place. That is, an imported device can be purchased for less than the price at which such a device is manufactured and sold in Sri Lanka. The price of the imported product is lower here not because it is illegal, but because these appliances are manufactured on a large scale and because of lower production costs.
Ceramic tiles:
Countries like India and China produce more tiles than Sri Lanka, using automated kilns and lower energy costs. Accordingly, there are times when tiles imported after paying taxes in the proper manner can be purchased at a lower price than local tiles, not because of dumping but because the cost of production is lower.
Lighters and matchboxes:
As the Minister also said in his comments, even though there is a 100% tax, items like lighters come into the country at very low prices. This is due to a production cost advantage and is not necessarily evidence of illegal trade.
Plastic furniture:
Sri Lanka imports all the raw materials needed for plastic production, such as polymers and resins. As a result, domestically produced plastic products may be more expensive than imported products, even with taxes.
Accordingly, in these cases, the lower price is due to factors such as competition between countries, large-scale production, and Sri Lanka’s limited industrial capacity, not illegal dumping.
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Conclusion:
Our investigation shows that the post circulating on social media, claiming that the Minister has stated that he will investigate imported goods sold in the country at lower prices than local products and take strict legal action against them, is misleading to society.
Minister Sunil Handunnetti has stated that if a product is sold in the local market at a price lower than the taxes imposed and lower than the cost of producing the product in the relevant country, it may be a substandard product that has been illegally imported into the country. Accordingly, if a proper complaint is made with evidence regarding such products, it can be investigated, and action can be taken against it through the Anti-dumping Act, the Minister emphasizes.
Title: Did Minister Sunil Handunnetti say sellers of low-priced imported goods will face penalties?
Fact Check By: Sagarika Chathumali
Result: Misleading
