Mar 21, 2018

Companies Act to be amended due to money laundering activities!

Cabinet approval has been received for the amendment of the Companies Act No 7 of 2007 which has allowed for private companies in the country to get away with money laundering activities.

Acting Industry and Commerce Minister, A.D. Champika Premadasa submitted a cabinet paper on Tuesday has asked that the Act be amended to stop the country from being used as a haven for money laundering.

The Financial Action Task Force (FATF) the global policy setter on Anti Money Laundering and Countering the Financing of Terrorism (AMACFT) has publicly identified Sri Lanka as a country with strategic AMACFT deficiencies placing Sri Lanka on its Grey list of countries. An action plan for Sri Lanka has been provided to be implemented within a given time frame in order to rectify the deficiencies highlighted, the cabinet paper on the subject stated.

The European Union in its Parliamentary Sessions in February 2018 has already black listed Sri Lanka.

One of the action items in the FATF Action plan has been to introduce amendments to the Companies Act No 7 of 2007, on the identification of beneficial ownership.

The relevant amendments were drafted by the Financial Intelligence Unit of the Central Bank and the Department of Registrar of Companies with the consultation of the Company Law Advisory Commission and the Cabinet Committee on Economic Management on February 21, has asked that all such amendments be expedited.

As a result, cabinet approved to amend the company law as per the amendments prepared by the Advisory Commission appointed under section 506 (1) of the Companies Act No 7 of 2007.