Financial Institutions Warned Against Obstructing Investigations
Sri Lanka’s financial regulatory body has issued a stern warning to institutions and individuals against obstructing investigations or failing to comply with guidelines related to money laundering and financing of terrorism.
Background
According to the Financial Intelligence and Analysis (FIA) Act, any person who intentionally obstructs an investigation or fails to produce relevant documents can be fined up to one million rupees and imprisoned for a term not exceeding five years. Similarly, anyone who destroys, falsifies, conceals or disposes of information related to an onsite inspection or investigation can be fined up to five million rupees and imprisoned for a term not exceeding 10 years.
Warning
The warning comes as part of the country’s efforts to combat money laundering and financing of terrorism. The FIA Act defines money laundering as the process of funneling cash or other funds generated from illegal activities through financial institutions or businesses to conceal or disguise their true ownership and source.
Guidelines for Financial Institutions
The FIA Act sets out guidelines for financial institutions and individuals on how to comply with anti-money laundering and counter-terrorist financing requirements. These guidelines include:
- Identifying and verifying customer information
- Conducting ongoing monitoring of customer transactions
- Reporting suspicious transactions
- Maintaining records of all transactions
- Implementing internal controls and procedures
Financial institutions are required to adhere to these guidelines and report any breaches or suspected breaches to the regulatory body.
Consequences of Non-Compliance
The consequences of non-compliance with the FIA Act are severe. Institutions and individuals found guilty of obstructing investigations or failing to comply with guidelines can face fines and imprisonment.
In addition, the regulatory body has the power to revoke licenses and impose other penalties on institutions that fail to comply with the act.
Call for Action
The warning comes as part of the country’s efforts to strengthen its financial system and combat illegal activities. The regulatory body is urging all financial institutions and individuals to take immediate action to ensure compliance with the FIA Act.
Institutions are advised to review their internal controls and procedures to ensure that they are compliant with the act. Individuals who have any doubts or concerns about their obligations under the act should seek guidance from the regulatory body or a qualified professional.
Conclusion
The fight against money laundering and financing of terrorism is a critical one, and it requires the cooperation and commitment of all financial institutions and individuals.