Financial Crime World

Financial Crime Surges in Sri Lanka: Unnerving Authorities and Economy

Significant Surge in Financial Crimes Reported by FIU

Colombo - The Financial Intelligence Unit (FIU) of Sri Lanka has reported a significant surge in financial crimes, causing concern among financial regulators and threatening the country’s economic stability.

Key Statistics

  • Total number of suspicious transactions nearly doubled from 2019 to 2020.
  • The total value of these transactions increased by 146%.
## Suspicious Transaction Reports (STRs) and Values

- Total number of STRs in **2020**: 11,359
- Total number of STRs in **2019**: 6,433
- Total value of STRs in **2020**: LKR 202.3 billion (approximately USD 1.16 billion)
- Total value of STRs in **2019**: LKR 83.2 billion

Common Categories of Financial Crimes

  • Money laundering: reporting a 36% increase in transactions and a 78% increase in value.
  • Terrorist financing: and fraud: also experienced considerable growth.

Factors Contributing to the Increase in Financial Crimes

  • The global economic turmoil arising from the COVID-19 pandemic.
  • The rise in digital transactions and the shift towards online industries.

Government’s Response

  • The Central Bank of Sri Lanka and other related institutions have issued several circulars, guidelines, and advisories to banking institutions and designated non-financial businesses and professions to strengthen their anti-money laundering and countering terrorism financing measures.
  • The FIU collaborates closely with local and international organizations such as the Financial Action Task Force (FATF), Egmont Group, and Asia/Pacific Group on Money Laundering (APG).

Experts’ Concerns

  • Financial crime remains a significant threat to Sri Lanka’s economic development.
  • Increased awareness and cooperation from all sectors is needed to deter financial criminals and ensure a stable and secure financial system.

Implications and Future Outlook

  • The authorities’ response to the growing financial crime trend in Sri Lanka will be closely watched by financial institutions and the international community, potentially impacting the country’s business reputation and access to foreign investment.