ECONOMYNEXT – Sri Lanka has appointed a high-level job pressure on Anti-Cash Laundering and Countering the Financing of Terrorism (AML/CFT) and Preparations for the island nation’s Third Mutual Analysis which is to start within the close to future by the Asia Pacific Group (APG), the Central Financial institution mentioned.
The AML/CFT job pressure consists of Retired Supreme Court docket Decide Buwaneka Aluwihare (Chairman), Justice Minister Harshana Nanayakkara, Deputy Financial Growth Minister Anil Jayantha Fernando, Deputy Finance Minister Harshana Suriyapperuma, Senior Central Financial institution Deputy Governor Nelumani Daulagala, and Finance Ministry’s Further Director Normal A Ok D D D Arandara.
The reconstituted job pressure comes as Sri Lanka is dealing with a threat of falling into the gray record for a 3rd time if it fails to implement sturdy AML/CFT measures really useful by the worldwide physique Monetary Motion Process Pressure (FATF). Such failure may dent the island nation’s financial restoration from sovereign debt default, analysts have mentioned.
“Throughout this upcoming Mutual Analysis, Sri Lanka is required to display Technical Compliance with the 40 Suggestions of the Monetary Motion Process Pressure (the worldwide coverage setter on AML/CFT) and their efficient implementation by way of 11 Speedy Outcomes,” the Central Financial institution mentioned in a press release.
The Central Financial institution mentioned the actions to rectify the remaining gaps within the AML/CFT framework for efficient implementation of the motion plans have been communicated related stakeholder establishments which embody Lawyer Normal’s Division, Police, Sri Lanka Customs, Fee to Examine Allegations of Bribery or Corruption (CIABOC), Ministry of Justice, Ministry of Defence, Ministry of Overseas Affairs, and Ministry of Finance.
The stakeholder record additionally consists of Division of the Registrar of Firms, Inland Income Division, Division of Excise, Authorized Draftsman’s Division, Registrar Normal’s Division, Securities and Trade Fee of Sri Lanka, Insurance coverage Regulatory Fee of Sri Lanka, Building Trade Growth Authority, Nationwide Gem and Jewelry Authority, Nationwide Secretariat for Non-Governmental Organizations, and Division of Import and Export Management.
The preliminary AML/CFT Process Pressure established in 2023 to observe and follow-up the implementation of the Establishment clever motion plans has been reconstituted now with high-level ministerial illustration beneath President Anura Kumara Disanayake, the Central Financial institution mentioned.
Sri Lanka’s third analysis on AML/CFT framework, which is to evaluate the nation’s efforts to fight cash laundering and the financing of terrorism,” has already been postponed by one-year and rescheduled to begin in March 2026 as a result of two nationwide elections held final 12 months.
The Central Financial institution has deliberate to additional strengthen the conduct of risk-based AML/CFT examinations of banks when it comes to the Monetary Transactions Reporting Act (FTRA) and the suggestions of the Monetary Motion Process Pressure (FATF).
The nation is obliged to meet a raft of measures together with passing new legal guidelines to adjust to stopping AML/CFT legal guidelines earlier than the following analysis.
When a rustic is positioned on the Monetary Motion Process Pressure (FATF) gray record, it faces a number of monetary, financial, and reputational challenges together with decreased entry to world monetary markets, decline in overseas direct funding (FDI), elevated compliance prices, and dangers of ranking downgrading.
In 2019, Sri Lanka was eliminated for the second time from the gray record of FATF, a world anti-money laundering physique, after the Central Financial institution took some actions mandated by the FATF.
Sri Lanka is liable to falling into the gray record once more if it fails to take stern actions in opposition to doable cash laundering and terrorism financing loopholes within the nation.
The IMF has urged Sri Lanka to adjust to the newest worldwide Anti- AML/CFT Compliance Obligations in return to its $3 billion bailout bundle.
Sri Lanka has already fallen to the gray record twice previously 14 12 months with cash laundering and terrorism financing posing critical dangers to the home and world monetary system, peace, and improvement.
The brand new measures embody amendments to the Firms Act on helpful possession necessities.
The IMF’s mortgage programme has emphasised the necessity of addressing bribery and corruption and Sri Lanka is required to meet a raft of obligations beneath the AML/CFT pillar, the central financial institution has mentioned.
A failure will end in Sri Lanka being recognized as a rustic with strategic deficiencies in its AML/CFT Framework and shall be designated as a grey-listed/ blacklisted nation. (Colombo/February 10/2025)
