Money laundering: Sri Lanka listed among ‘high risk’ countries

The inter-governmental Financial Action Task Force (FATF) has listed Sri Lanka among eleven ‘high risk and monitored jurisdictions’ that have taken insufficient measures to combat money laundering, terrorist financing and other threats to the international financial system. The other countries are Bosnia and Herzegovina, North Korea, Ethiopia, Iran, Iraq, Syria, Trinidad and Tobago, Tunisia, Vanuatu and Yemen. The list is published on the website of FATF.

The FATF sets standards and promotes implementation of legal, regulatory and operations measures for combating money laundering terrorist financing and related threats to the integrity of the international financial system. It monitors countries’ progress in implementing its recommendations; reviews money laundering and terrorist financing techniques and counter-measures; and, promotes the adoption and implementation of the FATF Recommendations globally.

In October 2017, Sri Lanka made a high-level political commitment to work with the FATF and the Asia/Pacific Group on Money Laundering (APG) to strengthen the effectiveness of its anti money laundering and counter-financing of terrorism regime and to address any technical deficiencies. The Central Bank’s Financial Intelligence Unit (FIU) aspires to implement some 40 recommendations encapsulated in an action plan by the end of 2018, an official source said. He said there had been a “lack of interest” in the past but that Sri Lanka is now invested in fulfilling its commitments. Other agencies of the Government must also play their part.

Among other things, Sri Lanka has promised to amend the Mutual Assistance in Criminal Matters Act to ensure cooperation may be provided on the basis of reciprocity; to issue a revised Trust Ordinance and demonstrate that implementation has begun; and to establish a Counter Threat Finance and Sanctions (TFS) regime to implement the relevant UN Security Council Regulations related to Iran and North Korea.

Civil Society activist Chandra Jayaratne this week wrote to Presidential Secretary, Austin Fernando warning that there was a risk of Sri Lanka being further downgraded from a ‘light grey’ area classification to ‘dark grey’ after the next FATF country review. He called for early action to ensure that serious violations of FATF recommendations and misuse of or engaging in irregular and unauthorised foreign exchange transactions were made a predicate offence under the money laundering legislation.

Mr Jayaratne has also recommended the creation by statue of a Serious Frauds Office and an Independent Public Prosecutor and the enactment of a standalone Proceeds of Crime Act, among other measures.

Source : Sunday Times