How to Start an Overseas Business in Sri Lanka | Business Impact of Foreign Exchange and Tax Regulations on Business Expansion from Sri Lanka to Overseas Markets

This article delves into the foreign exchange regulations and tax policies that affect the expansion efforts of Overseas Businesses in Sri Lanka. in overseas markets. It focuses on resident investors and does not cover investments made by entities other than private limited companies or alternative forms of foreign exchange transactions.

Foreign Exchange Regulations

Under the Foreign Exchange Act, eligible resident investors are permitted to establish and maintain overseas offices, branches, or projects (referred to as overseas offices) in foreign countries.

Limits on Outward Investments

Capital transactions for outward remittances must be conducted through an Outward Investment Account (OIA), which is opened and maintained by the eligible resident investor through an authorized dealer or a restricted dealer. These transactions are subject to limits specified in issued directions and the provisions of the Foreign Exchange Act.

For companies or partnerships investing in overseas offices/branches, the limit is set at USD 300,000 per calendar year or an equivalent amount in other designated foreign currencies. However, the usage of outward investment accounts for payments has been suspended since June 2022, following a gazette notification by the finance minister at that time.

Additionally, the gazette order imposes a maximum limit of USD 20,000 or its equivalent in other designated foreign currencies for outward remittances on capital transactions made through Business Foreign Currency Accounts or Personal Foreign Currency Accounts held by resident individuals in Sri Lanka, during the effective period of the notification.

Repatriation of Income and Liquidation Proceeds

Any income and capital proceeds from investments must be brought back to Sri Lanka through the same outward investment account used for the initial investment, within three months from the date of receipt.

Incentives for Resident Investors

Eligible resident investors are allowed to utilize funds up to fifty per cent (50%) of the value of capital gains from previous outward investments credited to their outward investment account, without being subjected to the permitted limits. However, this incentive has also been restricted by the aforementioned gazette notification since June 2022.

Other Terms, Conditions, and Reporting Requirements for Foreign Investments

1. Prior to each outward remittance, the investor must obtain a clearance letter from the Head of the Department of Foreign Exchange through an authorized dealer or a restricted dealer. Investors planning subsequent foreign investments must provide a certificate obtained from a Fellow member of the Institute of Chartered Accountants of Sri Lanka or a Charter holder of the Chartered Financial Analyst (CFA) Institute, outlining the progress and status of their previous investments, along with supporting documents. The Head of the Department of Foreign Exchange will issue the clearance letter upon being satisfied with the progress of the previous investments.
2. The Board of Directors of an investment company that has invested in an unlisted company outside Sri Lanka must evaluate the progress of such investment annually and submit a report to the Head of the Department of Foreign Exchange, including details on the investee's profit or loss, dividends declared by the investee, or dividends received by the investor. This report must be submitted on or before March 31 of the following year or as specified by the Head of the Department of Foreign Exchange for a particular investment.
3. In order to be eligible for permitted investments under foreign exchange regulations, investors must maintain a sound financial position and performance. They must also provide a recommendation from a Fellow member of the Institute of Chartered Accountants or a Charter holder of the Chartered Financial Analyst Institute, in line with the directions issued by the Central Bank. Additionally, the feasibility of the proposed investment must be demonstrated to the Head of the Department of Foreign Exchange.

Tax Regulations

Determining Applicable Taxes for Foreign Subsidiaries/Branches

To ascertain the applicable taxes for foreign investments, companies must submit relevant agreements, business details, business process details, and organizational charts in writing to the tax policy unit of the Inland Revenue Department. Subsequently, the tax policy unit will consult with the interpretation committee and provide details regarding the taxes applicable to the specific foreign investment.

Tax Clearance Requirements for Outward Remittances in Foreign Currency

For foreign currency remittances, a tax clearance must be obtained from the Inland Revenue Department (IRD), except in cases mentioned in the negative list under the Inland Revenue Act. The tax clearance certificate issued by the IRD must then be submitted to the bank to initiate the remittance process.

Due to the Withholding Tax (WHT) imposed on payments received by non-residents, the company must submit a tax clearance certificate issued by the IRD to the bank in order to process outward remittances. The WHT rate will be determined based on the provisions of the Inland Revenue Act but will be subject to the provisions of double tax avoidance agreements.

Payments to resident individuals will be subject to the Advance Personal Income Tax (PAYE/WHT) as per the provisions of the Inland Revenue Act. Invoices and related agreements must be submitted to both the IRD and the bank in all the aforementioned circumstances.

Note: The above information is based on the current regulations and should be verified with the relevant authorities for any updates or changes.

Sri Lankan Economy and Public Debt Management

 

Economic Growth

Amongst the unprecedented challenges deriving from the COVID-19 pandemic domestically and globally, the Sri Lankan economy recorded a negative growth of -3.6%  in 2020 compared to the 2.3 % in 2019 whereas 3.3% growth was recorded in 2018. Consistent with the swift fiscal and monetary policy measures implemented by the government to mitigate the impact of the pandemic and the recent developments of the high-frequency economic indicators, it is expected that the economy would return to the growth path in 2021.

External Trade

The external sector acquired a mixed performance in 2020 under the COVID 19 situation. The exports dropped from UDS 11,940 mn to 10,047 mn by 1,893 mn (16%) in 2020 whilst the imports dropped from USD 19,937 mn to 16,055 mn by 3,882 mn (19%) resulting in trade deficit narrowing to USD -6,008 mn by -1,989 mn (25%) significantly to its lowest level since 2010. The restrictions imposed on imports and the comparatively low global oil prices helped this remarkable performance.

In 2020 import expenditure on consumer goods, which contributed to 21.2% of the total imports, declined by 14%, mainly due to the restriction imposed on vehicle imports (USD 816 mn to 283 mn (65%)). Import expenditure on intermediate goods, which constitutes 56.5% of total imports, was contracted by 20%, mainly due to the global fuel price reduction and demand for fuel dropped due to travel restrictions imposed during the covid period (USD 3,892 mn to 2,543 mn by (35%)). Expenditure on investment goods also declined by 22.6%, driven by the drop in imports of machinery and equipment, building material, and transport equipment.

The export income was reduced in 2020 mainly due to the subdued demand in key export destinations combined with the supply side interruptions with the covid pandemic.

Official Reserves

Foreign reserves are assets or claims that a country holds in a foreign soil. The gross official reserves decreased from USD 7,642 mn to 5,664 mn by 1,978 mn (-26%) in the year 2020 resulting in the reserve adequacy decreasing from 4.6 months of import cover to 4.2 months by -8%.

Foreign Direct Investments (FDI)

In the year 2020 foreign direct investments dropped from USD 743 mn to 434 mn by 309 mn (-42%). The covid pandemic in Sri Lanka and the impact of covid 19 on the global financial markets were affected by this receded investment inflow.

Government Revenue & Expenditure

The government revenue decreased from Rs. 1,891 bn to 1,368 bn by 523 bn(28%) in the year 2020. Out of the total revenue, the tax revenue dramatically decreased from Rs. 1735 bn to 1217 bn by 518 bn (30%) at the same time as Non-tax revenue decreased from Rs.156 bn to 151 bn by Rs. 5 bn (3%). However, this did not occur merely due to the impact of the COVID-19 pandemic and Tax concessions granted to battle against COVID-19, The policy reforms to the tax system such as removal of certain taxes like NBT, Economic Service Charge (ESC), and reduction of VAT rates from 15% to 8%, and the comprehensive tax policy package introduced with the Budget 2021 directly affected to the government revenue reduction in 2020.

Government expenditure and net lending in 2020 were reduced from Rs. 3,338 bn to 3,041 bn by 297bn (-9%) ,The recurrent expenditure incurred in 2020, has increased from Rs 2,425 bn to 2,548 bn by 123 bn (5%). The increase in recurrent expenditure in 2020 was mainly due to the rise in expenditure on subsidies and transfers, salaries, and wages. Capital expenditure and net lending declined from Rs. 913 bn to 493 bn by 420 bn (-46%). This decline reflects the impact of the limited fiscal space due to the notable decline in government revenue and the rise in recurrent expenditure of 2020.

The budget deficit has increased from Rs 1,447 bn to 1,673 bn by 226 bn (16%) in 2020. When it is calculated as a percentage to GDP it increased from 10% to 11% by 1% of GDP at the end of 2020. To financed the budget deficit government has focused more on domestic sources rather than going for foreign financing. 

Public Debt

The total outstanding central government debt increased from Rs. 13,031 bn to 15,117 by 2,086 bn (16%) in the year 2020. The depreciation of the exchange rate primarily led to this increase with an increase of the rupee value of foreign debt (by Rs. 355.7 bn at the end of 2020). The debt stock increased up to 101%  of GDP at the end of 2020, compared to 87%  at the end of 2019.

The foreign debt declined from Rs 6,201 bn to 6,052 bn by 149 bn (-2%) at the end of 2020, whereas domestic debt increased from Rs 6,830 bn to 9,065 bn by 2,235 bn (33%) at the end of 2020. This marks an increase in the share of domestic debt in the total debt stock 60% from 52%, at the end of 2020, along with the decrease of the share of foreign debt to 40% of the total debt stock at the end of 2020 from 48% at the end of 2019.

At the end of 2020, the debt to GDP ratio was recorded above 100% for the first time in Sri Lanka as 101% of GDP. Domestic debt was 61% of GDP compared to 46% at the end of 2019. In contrast, foreign debt as a percentage of GDP declined to 40% at the end of 2020, compared to 41% at the end of 2019. The decline of the portion of the foreign debt was a result of the Government’s preference for domestic debt over foreign debt as well as net repayments of foreign debt owing to limited access to foreign financing due to current debt statistics of Sri Lanka.

 

Debt Service Payments

The total debt service payments decreased from Rs 2,007 bn to 1,925 bn by 82 bn (-4%). Total domestic debt repayments declined from Rs. 1,208 bn to 1,158bn by 49 bn (-4%). Repayment on foreign debt declined from Rs 800 bn to 767 bn by 33 bn (-4%) in the year 2020.

Total interest payment has increased from Rs. 878 bn to 957 bn by 79 bn (9%) while Interest payments on foreign debt increased from Rs. 210 bn to 243 bn by 33 bn (15%)  and Interest payments on domestic debt

Increased from Rs. 667 bn to 714 bn by 46 bn (7%).

As a percentage of GDP the total debt service payments increased to 13% in 2020 from 13.5%  in 2019. Total debt service payments as a percentage of government revenue increased to 141% from 106% in 2019 whilst the total debt service as a percentage of export earnings increased to 103% from 94% in 2019.

The cost of debt remaining at 13% of GDP, whereas increased to 70% from 46% when considering as a percentage of government revenue.

Annexure

                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

MCC Agreement

Highlights of MCC Compact

The Government of Sri Lanka and MCC together identified weak transport infrastructure and ineffective land administration practices as two binding constraints to economic growth in Sri Lanka. 

To address these constraints, the proposed compact consists of two projects: a transportation project and a land project. The total budget for the compact is $ 480 million. The $ 350 million transport project has an estimated economic rate of return of 19 %. It seeks to increase the relative efficiency and capacity of urban and provincial transport infrastructure in the Western, Central, Sabaragamuwa, and Uva Provinces. 

The transport project will upgrade physical roadway networks, modernize traffic systems, and introduce policy and regulatory reforms. 

These investments will reduce severe traffic bottlenecks, create safer, more reliable public transportation, and lower the transport costs required to connect people and goods with booming markets. The $ 67 million land project has an estimated economic rate of return of 26 %. It aims to expand and improve the existing Government of Sri Lanka initiatives to increase the availability of spatial data and land rights information. The project will initially focus on districts in the Central, North - Western, North - Central and Eastern Provinces. 

Land activities will help the Government create an inventory of state lands, modernize methods of valuing lands, strengthen tenure security for smallholders, women, and firms, and digitize deeds records so that they are less vulnerable to damage, theft, and loss. Together, the two projects are projected to benefit 11 . 3 million people, which accounts for 54 % of Sri Lanka's s population. The remaining $ 63 million will be used to support technical assistance, feasibility and design studies, project administration, and monitoring and evaluation. These funds will help the Government to effectively design, implement, manage, and monitor the compact program. The Government of Sri Lanka will establish a local entity staffed by Sri Lankans to coordinate implementation by the ministries and departments mentioned above. This entity will be accountable to a Sri Lankan Board of Directors comprised of eight government officials and three representatives from the private sector and civil society.

MCC Transport Project 

The Transport Project is budgeted at $ 350 million and aims to improve urban and rural mobility in the Western, Central, Sabaragamuwa, and Uva Provinces in two ways. First, it will cause traffic congestion and improve public transportation in the Colombo Metropolitan Region. Getting transport right is key to making Colombo a more livable, well - functioning city. Second, the Transport Project will improve connectivity between the central part of the country and ports and markets in the Western Province. The Transport Project will upgrade the transport infrastructure and systems and has three activities : 

$ 160 million has been allocated for an Advanced Traffic Management System ( ATMs ) for the Colombo Metropolitan Region. ATMs combines physical improvements and civil works with technology enhancements to optimize the efficiency of the existing road networks along might heavily travel corridors that link central Colombo with its suburbs. The activity will also introduce modem technologies for vehicle detection, real-time data collection, and analysis of traffic flows, an interconnected traffic signal system, and dedicated bus priority systems throughout the network. ATMs is a proven and powerful tool that other global cities are deploying to safely facilitate the flow of pedestrians, goods, and passengers within urban street networks to stay ahead of the congestion curve. ATMs involves civil works improvements to 132 junctions in greater Colombo and a traffic management center where the implementation of effective traffic control strategies are coordinated along approximately 205 kilometers of existing road networks. 

The $ 50 million bus service modernization activity would improve bus services in greater Colombo. Bus service accounts for 45 percent of all passenger miles traveled in greater Colombo and disproportionately serves low - income individuals. The activity will introduce automated fare collection systems based on smart cards : create single schedules for multiple bus operators running on a given route ; introduce GPS bus tracking to enable transit operators to know buses locations and determine if they are operating according to schedule ; and improve safety and accessibility for women , the elderly , disabled and other vulnerable groups . MCC support will also help the Sri Lanka Transport Board and private bus operators develop sustainable financing arrangements for purchasing new state - of - the - art buses. The $ 140 million rural transport activity would upgrade approximately 131 kilometers of interprovincial roads in the Central Ring Road Network, connecting the Central, Sabaragamuwa, and Uva Provinces with ports and markets in the Western Province. MCC will rehabilitate various segments of the network. Passengers and goods from the Eastern Province also travel through this network. Improvements to this network would not several benefits as well

MCC Land Project 

The Land Project is budgeted at 567 million. It aims to expand and improve the existing Government of Sri Lanka initiatives to increase the availability of spatial data and land rights information. This project will help the Govemment identify underutilized state land that can be put to more productive use and maximize rents from lands that the government leases. It would also increase tenure security and traceability of land for smallholders, women, and firms by digitizing deeds records so that they are less vulnerable to damage, theft, and loss and moving properties from the Deeds System to the Title Registration System. The Land Project has five activities, which enhance existing Government initiatives : 

Create a cadastral map of land parcels and complete inventory of state land, providing data to be entered into the Government ' s e - State Lands Information Management System ( eSLIMS). Budget : $ 23,400,000 ; 

Improve the valuation of state and private lands by improving data collection in support of a computerized mass appraisal system, building on Government efforts to strengthen the Valuation Department. Budget : $ 6,500,000 ; 

Improve the Deeds Registry by digitizing existing records and linking them to digital parcel information, building on the Government ' s e - Land Registry initiative. Budget : $ 11,400,000 : 

Improve tenure security for all landholders by moving properties from the Deeds system to the Title Registration system, expanding the Government ' s Bim Saviva program. Budget: $ 19,300,000; and Research in support of measures to improve land administration policies. Budget : $ 6,700,000 . 

The eSLIMS is an information technology system that contains maps of state land parcels vested with various Government agencies. The system tracks applications for land parcels and information about state lands that the Government already leases out and collects revenue on. The Government is currently automating the land valuation process that will accelerate property valuation for tax and other purposes. The eLand Registry system contains digitized land registry information to simplify and make more secure the completion of land transactions by property owners and buyers. The Bim Saviva program converts private land in the Deeds system to a more secure Title Registration system. Unfortunately, inadequate financial and technical resources have resulted in all of these efforts moving forward sporadically and without proper coordination. The MCC Land Project would fill these resource gaps.

GSP plus and effects of GSP plus on Sri Lankan Economy

Introduction

The Generalized System of Preferences is typical offers to a developing country and which provides a tariff reduction, and that can happen in the decrease of poverty in those countries. Generally, this benefit gave by countries that are in the European Union to some specific developing countries. This debate about the system of tariff preferences was started in 1960 at the conference of the United Nations Conference on trade and development (UNCTAD). (Perera, 2016). Therefore, this tariff preference system can be categorized into three significant arrangements. Those are,

1. GSP(Standard)
2. GSP Plus (+)
3. EBA

GSP(Standard) was introduced in 1968 by the European Commission, and these facilities had been given for 177 countries, and it included 6400 products. Therefore, this trade arrangement offers by EU Union that allows developing countries, and they can get their exports in pay less or no duties. According to the GSP scheme, which provides partial or fully or two-third of tariff reduction of all product categories, which are exported into the European region. However, the GSP standard scheme had three primary objectives. Those are,

• To increase developing countries export earnings
• To promote industrialization to developing countries.
• To accelerate the growth rate of developing countries.

The new GSP plus scheme was introduced on 1st July 2005, and the facilitates given for 15 developing countries, and GSP Plus is a distinctive element of the GSP scheme that provides additional trade benefits to developing countries. Sri Lanka was granted GSP plus tariff concession due to the Tsunami disaster in 2005. However, the primary purpose of the GSP plus is providing a wide – range of market access than the GSP scheme. Which offer beneficiary countries have an opportunity to duty-free access to the EU market for over 7200 products.

Eligibility Criteria Under the New GSP+ Scheme

A country should qualify under the vulnerability criteria, the income criteria and comply with 27 EU conventions to be eligible under the current GSP plus scheme. (‘Gsp+ and Sri Lanka’, 2016).
· The vulnerability criterion ensures a country can benefit from GSP+ if;

01. The country is not competitive on the EU market (The import-share ratio is less than 2%)
This implies that a country has a low level of exports to the EU; exports under GSP are less than 2% in value of total GSP covered imports by the EU. This rate was relaxed from 1% under the previous scheme.

02. The country doesn't have a diversified export base with the diversification ratio is 75% of a country's exports to the EU for its seven most significant sections.
Exports from a country to the EU are heavily concentrated in a few products that the seven most significant sections of GSP-covered imports into the EU represent more than 75% in the value of their total GSP covered exports.

Income Criterion

The country should not be classified by the World Bank as an upper middle income or higher income economy for three consecutive years. Sri Lanka is currently at the US $ 3,625 per capita income level and is well below the $ 4,125 mark for the Upper-middle-income category. Hence eligibility under this criterion can be easily met.

Comply with and effectively implemented 27 EU Conventions.

All 27 international conventions were strictly related to the above two topics. Withing those conventions, 15 were related to human and labor rights of the beneficial countries; then, the other 12 conventions are related to sustainable development and good governance. These are mainly UN and International Labor Organization (ILO) conventions, conventions on the environment, and good governance. Examples of such conventions are The Convention on the elimination of all Forms of Racial Discrimination; the International Convention on the Rights of the Child; the Freedom of Association and Protection of the Right to Organize Convention; and the Convention on International Trade in Endangered Species etc.

Sri Lanka Gaining and Losing GSP Plus

Sri Lanka has been a primary beneficiary of the EU’s standard GSP from the scheme’s commencement, and it began to benefit from GSP+ on 15th July 2005. Though, on 15th August 2010, the EU suspended Sri Lanka’s GSP+ status. Because incorporation of three conventions of EU’s decision was to withdraw GSP+ benefit from Sri Lanka was mainly based on the findings of a Commission investigation study that identified some failures in the implementation of conventions: (Perera, 2016). Those are.

1. International Covenant on Civil and Political Rights (ICCPR)
2. Convention Against Torture (CAT)
3. Convention on the Rights of the Child (CRC)

Effect of GSP Plus to Sri Lankan Economy

The EU had introduced a new GSP plus for 15 countries, and also, they had expected eligible criteria under the GSP plus scheme. Sri Lanka has been exported like apparel, tea, rubber, processed food products, seafood, toy products, porcelain, and ceramic ware and etc. Then, our significant exports are apparel, tea, and rubber sectors. The Sri Lankan exports, mainly apparel sector items, significantly increased after introduced GSP+. After introduced GSP+, our primary export market becomes EU. According to the table and figure, 1, the share of EU exports to total export has gradually increased for the period of GSP plus 2005 to 2010. According to table 2 and figure 2 If compared with the average annual growth of Sri Lanka export to the EU. Before the execution of the GSP plus in 2001 to 2004, the average annual growth of exports to EU was 11.5%, and export growth rose to 16.4% during the period of GSP+ was received from 2006 to 2009, this increase has resulted mainly from the benefits of GSP+. Up to 2004, we are primarily exporting our products to the UK and Italy, but after GSP+ introduced, it has extended to 6 countries. Such as UK, Italy, Belgium, Germany, Denmark, France. It should also be noted
that exports had increased gradually from 2005-2009. After that, the suspension of GSP plus the average annual growth of exports became decrease for the period of 2010 to 2014 from 7.4%. (Jayaratne, 2011)

Effect of GSP Plus on Sri Lankan Apparel Exports

As a developing country of Sri Lanka, the relationship with the EU is vital for developing the process of the country, because of EU is the principal export market and the second largest import market of Sri Lanka. For example, 50% of apparel products export to EU countries, and 29% of industrial products import from EU countries (The Island, 2010). In 2005 the EU decided to choose Sri Lanka as a GSP plus beneficiary country because Sri Lanka has involved with all international conventions rather than other regional countries in South Asia. Though they have decided to start this agreement in 2006 (January) because of disaster Tsunami, they originated it from July 2005. And it extended in 2009 again. In the year 2005 (before becoming a beneficiary), the share of Apparel Export to EU countries was 36.2%. However, after became a beneficiary holder, the percentage of export to EU has increased by up to 48.8% while the US market of apparel export has reduced its share from 59.4% to 45.2% and the EU market was dominated or suppressed rather than US market (The Island, 2010). GSP plus had been suspended in 2010; therefore, it mainly impacts of our garment sector. After removal GSP+, the apparel sector will lose a 9.6% tariff advantage(Perera, 2016). According to table 3 and figure 3, these facts and statistics, it is evident that the GSP advantage denoted as an instrument to control the EU export market positively.

Conclusion

· Under the GSP plus concession, Sri Lanka has been able to beat price competition and expand the market share in the EU.

· The apparel industry has been the largest beneficiary of the GSP plus scheme. If the suspension of GSP plus its most of the impact on the apparel industry as well as the entire economy will be significant.
· If the Sri Lankan perspective, the importance of the GSP plus has been highlighted for the period of economic crisis.

· Apparel exports better, performing in the EU market rather than in the USA.

· However, the current situation emphasizes the need for Sri Lanka to diversify its export products and markets and seek alternative markets to reduce its over-dependence on the EU and the US on especially for the apparel industry.

Recommendation

· Sri Lankan government must ensure the country's commitment to ratify and effectively implement 27 international conventions on human rights, labor conditions, protection of the environment & good governance.

· Sri Lanka should diversify its export product range and seek alternative markets, and that’s through can reduce the effect of the suspension of GSP plus.

· Sri Lanka should focus the sustainable products in international markets by making such research and development efforts, and that’s through can face competitiveness and take some competitive advantages in international trade.

Appendix

GSP

The following countries currently benefit from the Standard arrangement.

·         Africa: Botswana, Cameroon, Cote d’Ivoire, Republic of Congo, Kenya, Ghana, Namibia, Nauru, Nigeria, Swaziland

·         Asia: Kyrgyzstan, India, Indonesia, Sri Lanka, Vietnam, Tajikistan, Turkmenistan, Uzbekistan

·         Australia and Pacific: Cook Islands, Fiji, Marshall Islands, Micronesia (the Federated States of), Niue, Tonga

·         Europe: Ukraine

·         Middle East: Iraq, Syria

·         South America: Colombia, Honduras, Nicaragua

GSP Plus

Pakistan is the only South Asian country to have GSP+ privileges, as of January 2016. The other states which make use of the GSP+ scheme to export goods to the EU are: Armenia, Bolivia, Cape Verde, Costa Rica, Ecuador, Georgia, Mongolia, Paraguay and Peru.

EBA

The countries which qualify for the EBA the arrangement is as follows:

·         Africa: Angola, Burkina Faso, Burundi, Benin, Chad, Democratic Republic of Congo, Central African (Republic), Djibouti, Eritrea, Ethiopia, Gambia, Guinea, Equatorial Guinea, Guinea-Bissau, Comoros Islands, Liberia, Lesotho, Madagascar, Mali, Mauritania, Malawi, Mozambique, Niger, Rwanda, Sierra Leone, Senegal, Somalia, South Sudan, Sudan, Sao Tome and Principe, Togo, Tanzania, Uganda, Zambia

·         Asia: Afghanistan, Bangladesh, Bhutan, Cambodia, Lao (People’s Democratic Republic), Myanmar/Burma, Nepal, Timor-Leste, Yemen

·         Australia and Pacific: Kiribati, Samoa, Solomon Islands, Tuvalu, Vanuatu

·         Caribbean: Haiti

Table 1

Year	Total Exports (US$ mn)	EU Exports (US$ mn)	Contribution of total exports to EU exports (%)
2002	4699	1363	29%
2003	5133	1540	30%
2004	5757	1842	32%
2005	6347	1968	31%
2006	6883	2271	33%
2007	7640	2903	38%
2008	8111	3001	37%
2009	7085	2763	39%
2010	8307	2907	35%
2011	10559	3590	34%
2012	9774	3128	32%
2013	10394	3326	32%
2014	11130	3450	31%
2015	10505	3046	29%

Figure 1