Financial Crime World

Financial Crime Reporting Requirements in Sri Lanka Get a Boost with Establishment of FIU

Strengthening Financial Systems and Combating Illicit Activities

In 2006, Sri Lanka took a significant step towards strengthening its financial systems and combating illicit activities by establishing the Financial Intelligence Unit (FIU). This unit operates independently within the Central Bank of Sri Lanka, with the overall objective of combating money laundering, terrorist financing, and related crimes in line with international standards.

Establishment and Reorganization of FIU

The FIU was established under the provisions of the Financial Transactions Reporting Act No. 06 of 2006. In February 2007, it was reorganized as a department within the Central Bank of Sri Lanka. This move aimed at enhancing operations and enabling the unit to discharge its statutory functions more efficiently.

Key Objectives of FIU

  • Combat money laundering
  • Prevent terrorist financing
  • Related crimes in line with international standards

Comprehensive Framework for Combating Financial Crimes

Sri Lanka’s Anti-Money Laundering & Countering the Financing of Terrorism (AML/CFT) regime comprises three key legislations:

  • Convention on the Suppression of Terrorist Financing Act: This law aims to prevent and suppress terrorist financing activities.
  • Prevention of Money Laundering Act: This law provides a framework for preventing and combating money laundering activities.
  • Financial Transactions Reporting Act: This law requires financial institutions to report suspicious transactions to the FIU.

Enhancing Operations and Discharging Statutory Functions

The reorganization of FIU as a department within the Central Bank of Sri Lanka has enabled it to leverage on the policy-making and regulatory capabilities of the central bank. This move is expected to enhance operations and enable the unit to discharge its statutory functions more efficiently.

Boosting Investor Confidence and Enhancing Country’s Reputation

The establishment of FIU and reorganization as a department within the Central Bank of Sri Lanka marks an important milestone in Sri Lanka’s efforts to strengthen its financial systems and prevent illicit activities. The move is expected to boost investor confidence and enhance the country’s reputation as a stable financial hub.