Sri Lanka to tighten controls on private companies

ECONOMYNEXT: Sri Lanka’s company law is to be changed to give powers to authorities to force shareholders of private companies to submit more information about themselves under global anti-money laundering laws.

Under planned changes to Sri Lanka’s Companies Act No 07 authorities will demand more information from shareholders of private companies who hold more than 25 percent of the shares or those who exercise control.

Sri Lanka has fast-tracked compliance to international money laundering laws after the country was warned and put under monitoring by the Financial Action Task Force, a UN affiliated body promoted by developed nations due to delays.

Sri Lanka is also tightening regulation on non-governmental organizations.

There are fears that the new laws and regulations will give more powers to rulers of illiberal countries to control the population and mis-use information against unarmed citizen’s political opponents.

In Sri Lanka there have been questions whether the powers of Financial Intelligence Unit may be misused.

Sri Lanka does not have an independent public service with permanent secretaries unlike the developed nations which are promoting the rules, where individual freedom is strong.

There also concerns that the costs of compliance is raising the price and also access to financial services especially in poor countries but also in developed nations for law - abiding citizens. 

Even in developed nations a debate is already underway about the cost-benefits and whether the laws actually reduce crime.