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Foreign consultant hired to fix anti-money laundering failures

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Sri Lanka has hired a foreign consultant to prepare for regional scrutiny of its regime against the economic crime of money laundering and terrorism financing after repeated failures to fully comply with global standards. It has negotiated breathing space until next year for the purpose.

Dr. Gordon Hook, a barrister and the former Executive Secretary of the Asia/Pacific Group on Money Laundering (APG), has been hired as a consultant by the Central Bank of Sri Lanka (CBSL). He had visited Sri Lanka in September 2023 as a part of its delegation.

His fees and terms have not been disclosed by CBSL.

Dr. Hook will carry out a mock evaluation, including for licensed banks, from March 25 to identify gaps and prepare for the mutual evaluation in 2026, CBSL Governor Dr. Nandalal Weerasinghe said.

In the meantime, three pieces of legislation in the AML/CFT (Anti Money Laundering and Combating the Financing of Terrorism) regime will be amended—i.e., the Prevention of Money Laundering Act No. 5 of 2006, the Financial Transactions Reporting Act No. 6 of 2006, and the Convention of Suppression of Terrorism Financing Act No. 25 of 2005.

Noting that amendments will “further strengthen the AML/CFT legal framework in line with international standards,’’ Governor Weerasinghe said the “amendments are nearing completion.”

The Companies Act No. 7 of 2007 will also be amended as recommended by the IMF to include beneficial ownership requirements (clause 7 of the Bill). This will allow for a public beneficial ownership register in which companies disclose individuals who ultimately own or effectively control companies. But offshore and overseas companies are exempt (Section 130 A (10)).

An important piece of new legislation, the Proceeds of Crimes Bill, was presented to Parliament this month. The IMF asked that laws be enacted by April 2024. The legislation will enable seizure of suspected gains from crimes, freezing of proceeds judicially (High Court jurisdiction), and forfeiture. A panel considered US, Australian, UK, and South African laws and also got IMF legal experts’ advice. UN agencies gave technical support.

An evaluation by the Asia-Pacific Group on Money Laundering (APG) was scheduled for this month.

The Central Bank’s Financial Intelligence Unit must ensure technical compliance with 40 recommendations of the intergovernmental Financial Action Task Force and 11 immediate outcomes, including assessing risks, policy and coordination; international cooperation; effective anti-money laundering and combating the financing of terrorism (AML/CFT) supervision; financial intelligence; investigation and prosecution; and financial sanctions for proliferation financing.

The CBSL Governor told a compliance symposium late last month, “We took one more year, postponed to one year given the elections we had last year.’’

He reminded financial institutions of the adverse outcomes from non-compliance for Sri Lanka’s economy, risk to sovereign ratings, higher cost of borrowing, risks to correspondent banking relationships, and reputational damage. A ‘grey listing’ could mean increased due diligence on Sri Lankan customers.

“Sri Lanka is required now to showcase a strong performance based on a high level of technical compliance and effectiveness.’’

On two previous APG evaluations, strategic deficiencies were noted, and Sri Lanka was placed on the ‘grey list’, which identifies repeated failures to comply.

In the follow-up report of 2021, Sri Lanka was cited as not compliant on transparency and beneficial ownership of legal persons, partially compliant on regulation and supervision of financial institutions (CBSL is the regulator), and confiscation. Sri Lanka was compliant on only 7 of 40 technical requirements. Technical compliance assesses the legal and institutional framework and the authority and procedures of competent authorities.

Dr. Weerasinghe said the FIU did a national risk assessment in 2021-2022. Several gaps and deficiencies were identified. It was updated in 2024 and is to be further updated by June 2025.

The exercise used a tool provided by the World Bank.

The assessment report shows that Rs. 14.5 billion in illegal proceeds would have been generated by Sri Lanka’s foreign trade in the seven years to 2021. The involvement of banks is significant. But the magnitude is unknown.

A second national policy on AML/CFT was developed, and there is an institution-wise action plan “to rectify the remaining gaps’,” Dr. Weerasinghe said. All 24 stakeholders, including financial institutions, have been advised. A five-member task force was set up in December with higher-level representation. “This task force is empowered with overseeing the institution-wise action plan.’’

He also addressed beneficial ownership in banks, evolving risks from payment system infrastructure, the vulnerability of mobile payment applications, and financial crimes online.

(sundaytimes.lk)
(Except for the headline, this story, originally published by sundaytimes.lk has not been edited by SLM staff)

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President meets Gates Foundation delegation

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President Anura Kumara Dissanayake today (July 10) met with Dr. Chris Elias, President of Global Development at the Gates Foundation, for high-level discussions focused on key areas critical to Sri Lanka’s development. 

The meeting, held at the Presidential Secretariat, explored collaborative efforts in agricultural modernisation, nutrition, digital public infrastructure and rural technological integration.

Central to the discussions was the Inclusive Digital Agriculture Transformation (IDAT) initiative, which leverages data and technology to enable better decision-making and service delivery for smallholder farmers. The initiative represents a shared commitment to modernising agriculture, improving rural livelihoods and enhancing climate resilience.

President Dissanayake welcomed the partnership, expressing optimism about the country’s path forward. “We welcome the continued support of the Gates Foundation as we work together to build a healthier, more equitable and digitally empowered Sri Lanka. This collaboration is a testament to our shared commitment to sustainable development and improving the lives of all our citizens,” he said.

He further noted that the Government seeks the Foundation’s support for its broader programme aimed at integrating rural communities with modern global technology. 

Despite the economic challenges facing the nation, the President expressed gratitude for the Foundation’s engagement and emphasised that the visit would help identify and implement national development priorities.

Representatives of the Gates Foundation reiterated their commitment to supporting Sri Lanka’s digital economy strategy. They highlighted that particular focus would be given to the digital transformation of the agriculture sector, with the aim of enhancing productivity and revitalising the economy. The Foundation also assured its full support for the wider socio-economic development agenda, including initiatives in the livestock and dairy industries.

President Dissanayake underscored the importance of connecting rural communities, many of whom remain unaware of global technological advancements, with the tools and knowledge needed for empowerment. He stressed the value of the Foundation’s global experience and technical expertise in addressing development challenges common to many countries.

“One of our Government’s foremost objectives is to extend advanced technology to all levels of society, not only to uplift the national economy but also to improve efficiency across all sectors,” the President noted.

Dr. Elias acknowledged Sri Lanka’s ongoing transformation and welcomed the opportunity for deeper engagement. “We value the opportunity to engage with the Government and local institutions as they pursue strengthened systems to support inclusive growth. Our continued discussions in areas such as agriculture, health and digital infrastructure reflect a shared interest in advancing impactful solutions. I would like to thank the President and the Government of Sri Lanka for their continued commitment to improving the lives of all those living in Sri Lanka,” he stated.

The Gates Foundation delegation included Dr. Chris Elias, President, Global Development Gates Foundation, Jamal Khan, Regional Representative for Policy & Government Relations, South and Southeast Asia; Archna Vyas, Director of Policy Advocacy and Communications, Thushan Wijesinghe, Director Enterprise Data Solutions and Chandita Samaranayake, Chairman Connect To Care. 

The Sri Lankan delegation included Deputy Minister of Digital Economy Mr. Eranga Weeraratne, Dr. Nandika Sanath Kumanayake, Secretary to the President; Dr. Hans Wijayasuriya, Chief Advisor to the President on Digital Economy; and Mr. Roshan Gamage, Senior Additional Secretary to the President.

(President’s Media Division)

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TUs oppose appointment of Premarathne as new Excise chief

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Trade Unions of the Department of Excise have opposed the appointment of M.B.N.A. Premarathne, a retired Commodore of the Sri Lanka Navy, as the new Commissioner General of Excise.

TUs say that for the first time in the history of the Excise Department, a Commissioner General has been appointed from outside despite the existence of 03 senior, qualified officials within the department.

On July 06, the department’s TUs have directed a letter to President Anura Kumara Disanayake. urging to appoint an officer from the department to the post.

According to reports, Commodore (Retd.) Premarathne is said to be the husband of NPP National List nominee for the 2024 General Election – Prof. Wasantha Subasinghe. He is also said to be hailing from the President’s hometown of Thambutthegama.

The post of Excise Commissioner General fell vacant after Udaya Kumara Perera retired from public service today (July 10) upon reaching the age of 60.

On July 07, Cabinet approval was granted to appoint Commodore (Retd.) Premarathne to the post.

The proposal was presented by President Anura Kumara Dissanayake, in his capacity as Minister of Finance, Planning and Economic Development.

(Source : Lankadeepa)

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CCC calls for ‘continued engagement’ on US tariff reduction

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The Ceylon Chamber of Commerce (CCC) says the reduction in the tariff rate from 44% to 30% is a constructive and important first step by the Government toward bringing Sri Lanka’s tariff structure for exports to the US closer to that of regional competitors.

“We encourage continued engagement with the U.S. administration to secure a further reduction by 1 August, especially given that several regional peers are expected to benefit from even lower rates,” it said, in a statement.

The CCC further said that progress in achieving a further reduction will be critical to strengthening Sri Lanka’s position in this key market, maintaining buyer confidence, and supporting sustained trade growth over the long term.

“The Ceylon Chamber stands ready to support the Government’s efforts in this regard through constructive dialogue, industry feedback, and coordinated advocacy,” the statement adds.

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