Title: Money Laundering and Terrorist Financing Risk Assessment for Sri Lanka: Medium Risk Level [As per the Financial Intelligence Unit (FIU)]

Overview

The Financial Intelligence Unit (FIU) of Sri Lanka recently published its 2021/22 National Risk Assessment (NRA) report on Money Laundering and Terrorist Financing (ML/TF). According to the report, Sri Lanka’s overall risk level for ML/TF is classified as medium. The collaborative effort involved the FIU, Central Bank of Sri Lanka (CBSL), public and private sector stakeholders.

Key Findings from the NRA Report

• Most Significant ML/TF Threats: Drug Trafficking, Bribery and Corruption, Customs related offenses, and Laundering of Trade-Based Proceeds were identified as having a medium-high ML threat rating.
• Medium ML Threat: Fraud, Robbery, Environmental and Natural Resource Crimes, Human Smuggling/Trafficking, Tax Offenses, and Illegal, Unreported and Unregulated Fishing related unlawful activities were assessed as having a medium ML threat.
• Lower ML Threat: A lower ML threat was observed for Counterfeiting of Currency.

National Policy on Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT)

The NRA report prepared a National Policy on AML/CFT for Sri Lanka and comprehensive action plans for each stakeholder. These plans aim to address the gaps identified in effectively combating ML/TF.

Coverage and Technical Assistance

The assessment covers the period from 2016-2022 and utilizes data and statistics sourced from relevant stakeholder agencies. The World Bank provided technical assistance to carry out the NRA in line with the government’s commitment to protecting the economy and financial system from criminal elements and national security threats.

Strong Political Commitment Required

The FIU emphasized the importance of strong political commitment to address the national AML/CFT plan. The government has promised to foster a culture of accountability, transparency, and integrity in battling financial crimes, bribery, corruption, and money laundering and terrorist financing.

Conclusion

By understanding the current ML/TF risk environment, stakeholders can allocate resources effectively to high-risk areas and safeguard the integrity of Sri Lanka’s financial system.