Financial Crime World

Regulatory Updates on Anti-Money Laundering in Sri Lanka

Overview

The Financial Intelligence Unit (FIU)-Sri Lanka plays a crucial role in combating money laundering, terrorist financing, and related crimes in the country. As an independent entity within the Central Bank of Sri Lanka, the FIU is tasked with implementing international standards and best practices to tackle these threats.

History of the FIU

  • The Financial Intelligence Unit (FIU)-Sri Lanka was established in March 2006 as a key institution to combat money laundering, terrorist financing, and related crimes in the country.
  • In February 2007, the FIU was reorganized as a department within the Central Bank, enabling it to enhance its operations and leverage on the policy-making and regulatory capabilities of the institution.

AML/CFT Legislative Framework

Sri Lanka’s Anti-Money Laundering & Countering the Financing of Terrorism (AML/CFT) regime is comprised of three key pieces of legislation:

  • The Convention on the Suppression of Terrorist Financing Act, No. 25 of 2005: This act has undergone two amendments - one in 2011 and another in 2013. These updates have strengthened the country’s efforts to combat terrorist financing.
  • The Prevention of Money Laundering Act, No. 5 of 2006: This act was amended in 2011 to further enhance anti-money laundering measures.
  • The Financial Transactions Reporting Act, No. 6 of 2006: This act provides a framework for reporting suspicious transactions and combating money laundering.

Updates and Amendments

  • The legislative framework governing AML/CFT in Sri Lanka demonstrates the country’s commitment to international standards and best practices in this area.
  • The updates and amendments to these laws reflect ongoing efforts to strengthen the regime and prevent illicit financial flows.