Cabinet approval sought for amending anti-money laundering laws

The Cabinet of Ministers’ approval has been sought for introducing amendments to the anti-money laundering and countering the financing of terrorism (AML/CFT) laws in the country, to rectify their deficiencies and also to enhance compliance. 

To this end, the Financial Intelligence Unit (FIU) of the Central Bank has introduced amendments to three main legislative enactments to support the AML/CFT framework in the country. 

As a result, the Convention on the Suppression of Terrorist Financing Act, No. 25 of 2005, Prevention of Money Laundering Act, No. 5 of 2006 and Financial Transactions Reporting Act, No. 6 of 2006, will undergo amendments as part of this initiative.

The amendments have been introduced with the main aim of “rectifying the deficiencies identified at the mutual evaluation carried out in 2014/15 by the Asia Pacific Group on Money Laundering, with a view to enhancing the country’s compliance with the changes to the Financial Action Task Force (FATF) recommendations and deficiencies identified in the implementation of these legislations over the period”, the Central Bank said.

The FATF is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and financing of proliferation of weapons of mass destruction. 

In relation to the latest development emerged with the pandemic, the FATF had identified increased threat of money laundering with people increasingly engaging in remote work carried out using online systems and restrictions imposed on in-person banking during most of last year.  

Further, the risks have also risen due to urgent purchases of medical equipment to meet the overwhelming demand and the increase in online sales in general. 

The FATF and European Commission delisted Sri Lanka in 2019 and 2020, respectively, from their high-risk countries that were identified with strategic deficiencies in their AML/CFT laws.