Financial Transactions Reporting Act (FTRA) in Sri Lanka: A Comprehensive Guide
Introduction
The Financial Transactions Reporting Act (FTRA) is a critical piece of legislation aimed at combating money laundering, terrorist financing, and related regulations in Sri Lanka. This guide provides an overview of the key points and responsibilities outlined in the FTRA.
Key Points
Definition of Money Laundering
- Definition: Concealing or disguising the origin, nature, or destination of proceeds derived from an unlawful activity.
- Importance: Understanding money laundering is crucial for institutions to prevent and report suspicious activities.
International Cooperation
- Financial Action Task Force (FATF): An inter-governmental body that develops and promotes policies to combat money laundering, terrorist financing, and proliferation of weapons of mass destruction.
- Asia Pacific Group on Money Laundering (APG): A regional monitoring body that reviews compliance with FATF recommendations in the Asia-Pacific region.
Suspicious Transaction Reporting
- Suspicious Transaction Report (STR): A report filed when there are reasonable grounds to suspect a transaction is related to money laundering, terrorist financing, or another criminal offense.
- Institutions Required to File STRs: Any person or body of persons engaged in finance, non-finance business, or other designated activities must file STRs.
Responsibilities of Institutions
Key Points
- Appoint a Compliance Officer
- Establish and maintain procedures for customer identification, record keeping, monitoring, and reporting
- Make officers and employees aware of laws relating to money laundering and financing of terrorism
- Screen all persons before hiring them as employees
- Establish an audit function to test compliance with the Act
Designated Non-Finance Business
Activities Included
- Individual and collective portfolio management
- Investing, administering or managing funds
- Safekeeping and administration of cash or liquid securities
- Trustee administration or investment management
- Superannuation schemes
- Casinos, gambling houses, conducting a lottery (including online)
- Real estate agents
- Dealers in precious metals and stones
- Lawyers, notaries, independent legal professionals, accountants, trust or company service providers, and offshore units
Prescribed Threshold
Amounts Considered Suspicious
- Transactions above which require filing an STR.
This comprehensive guide highlights the importance of understanding money laundering regulations and the responsibilities of institutions in preventing and reporting suspicious activities.