A joint staff working document published by the European Commission on 16 July 2026 assesses Sri Lanka's compliance with the EU's Special Incentive Arrangement for Sustainable Development and Good Governance (GSP+) for the period 2023-2025, finding increasing compliance but persistent deficiencies. The document concludes that Sri Lanka's GSP+ status is maintained but conditional on urgent reforms, including repealing the Prevention of Terrorism Act (PTA), amending the Online Safety Act, strengthening accountability and reconciliation, ensuring labour rights especially in Free Trade Zones, and adopting anti-discrimination laws. Sri Lanka has been a GSP+ beneficiary since 2017; in 2024, GSP+ imports totalled EUR 1.5 billion, with a utilisation rate of 68.9% and estimated tariff exemptions of EUR 139 million.
The assessment covers a period of significant political change in Sri Lanka. Anura Kumara Dissanayake was elected President in September 2024, and his National People's Power (NPP) party won 159 of 225 parliamentary seats on an anti-corruption, reform agenda. Economically, GDP grew 5% in 2024 (GDP per capita USD 4,325), but cyclone Ditwah in November 2025 worsened socio-economic conditions; Sri Lanka remains lower-middle-income per the World Bank (2025).
the Human Rights Commission of Sri Lanka (HRCSL) regained 'A' status in May 2024, the Women's Empowerment Act was passed in June 2024, and the National Commission on Women was established in October 2025. However, the continued use of the Prevention of Terrorism Act (PTA) remains a major concern; a draft replacement, the Prevention of Terrorism (Special Provisions) Act (PSTA), was introduced in December 2025 but still contains elements incompatible with international standards. Amendments to the Online Safety Act have not been finalised.
Labour rights progress includes reduced child labour and ongoing comprehensive labour law reform. However, freedom of association and collective bargaining remain restricted, especially in Free Trade Zones; a 40% threshold for collective bargaining is still under discussion. On environment and climate, Sri Lanka is largely compliant with reporting obligations. Governance-wise, the country fulfils reporting obligations but failed to provide information on licit trade in substances.
The document is a joint staff working document accompanying the Commission's Joint Report to the European Parliament and the Council on the Generalised Scheme of Preferences covering 2023-2025. The assessment serves as a basis for the EU's continued monitoring and potential suspension of trade preferences if reforms are not implemented. The European Parliament and the Council are expected to review the findings and may take further action.
Sri Lankan exporters benefit from continued tariff preferences worth an estimated EUR 139 million annually, but face uncertainty if reforms stall. The Sri Lankan government is under pressure to implement politically sensitive legal changes, particularly on the PTA and labour rights. EU importers and consumers benefit from continued duty-free access for Sri Lankan goods, supporting supply chain diversification. Human rights and labour advocacy groups view the conditional maintenance as a positive but insufficient step, urging stronger enforcement mechanisms.