Financial Crime World

Title: Sri Lanka’s Progress in Combating Financial Crime and Terrorist Financing: An Overview

Subtitle: Insights from the Asia/Pacific Group on Money Laundering (APG) Report

Colombo, Sri Lanka (December 1, 2023) — The Asia/PacificGroup on Money Laundering (APG) has recently published a report assessing Sri Lanka’s progress in addressing technical compliance deficiencies related to anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. This article provides an overview of Sri Lanka’s recent efforts and the key findings from the new report.

Sri Lanka’s AML/CFT Efforts Under the Spotlight

Sri Lanka, an APG member since 2006, has made significant strides in the past few years to strengthen its legal framework and regulatory capabilities against financial crimes. The Mutual Evaluation Report (MER) evaluates Sri Lanka’s progress in implementing the Financial Action Task Force (FATF) Recommendations.

Key Advancements in Sri Lanka’s AML/CFT Regime

According to the report, Sri Lanka has achieved several critical milestones since its last evaluation in 2017:

  1. Establishment of an AML/CFT Regime: Sri Lanka has set up an AML/CFT regulatory system to oversee financial transactions and prevent financial crimes.
  2. Risk-based Approach for Supervision: The financial institutions follow a risk-based approach for supervision to minimize the risks of financial crimes.
  3. Enhancement of International Cooperation: Sri Lanka has improved its international cooperation and information sharing mechanisms.
  4. Improvement in Regulatory Frameworks: The regulatory frameworks have been enhanced to cover designated non-financial businesses and professions (DNFBPs).
  5. Enhancement of Financial Intelligence Unit’s Capabilities: The Financial Intelligence Unit (FIU) has been strengthened to effectively analyze and exchange financial intelligence.

Areas for Improvement

Despite these advancements, the report identified areas where further improvements are needed:

  • Capacity Building of Regulatory Authorities: The authorities need to increase their capacity to effectively enforce AML/CFT regulations.
  • Expansion of Powers: The availability of powers to the regulatory authorities should be expanded to deal with financial crimes adequately.
  • Effective Implementation of Customer Due Diligence Measures: Implementing effective customer due diligence measures for DNFBPs is crucial.

The Way Forward: Continuous Collaboration and Improvements

Sri Lanka must continue enhancing its AML/CFT regime to effectively address the remaining deficiencies. Collaboration with APG and international partners will be essential in exchanging knowledge, best practices, and resources.

Conclusion: Sri Lanka’s Focus on Financial Integrity and Stability

Sri Lanka’s progress in implementing effective AML/CFT measures is crucial for ensuring financial integrity and economic stability. The MER provides valuable insights into the current state of Sri Lanka’s money laundering and terrorist financing regulations, highlighting both achievements and areas for improvement.