Two finance companies fined Rs.1.5mn for violating FTRA

Two finance companies have been slapped with administrative penalties amounting to Rs.1.5 million during the final quarter of 2021 for the violation of the provisions of Financial Transactions Reporting Act, No. 6 of 2006 (FTRA).

A penalty of Rs. 1 million was imposed on Orient Finance PLC and a fine of Rs. 500,000 was slapped onLanka Credit and Business Finance Limited. 

The penalties collected by the Financial Intelligence Unit (FIU) of the Central Bank— Sri Lanka’s regulator for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT)—have been credited to the Consolidated Fund.

FIU said Orient Finance PLC and Lanka Credit and Business Finance Limited had failed to implement systems and procedures to maintain the complete list of designated persons and entities under relevant United Nations Security Council Resolutions (UNSCRs).  

The companies had also failed to screen their prospective customers at the time of onboarding as required by the customer due diligence rules and to screen the existing customer base or existing business relationships when any of the relevant UNSCR lists were updated in order to ensure that no business relationship was held by or linked to any of the entities or individuals included in the updated designated lists. 

The FIU noted that though lapses in systems and procedures were observed, instances of business relationships with designated individuals or entities by Orient Finance PLC and Lanka Credit and Business Finance Limited were not revealed during the on-site examination.  

The FIU said since then, Orient Finance PLC and Lanka Credit and Business Finance Limited have taken action to rectify the identified deficiencies and significant improvement has been made on the implementation of a sanctions screening process in the companies.