Global money-laundering watchdog notes deficiencies in Sri Lanka

A global money-laundering watchdog has found that there are some deficiencies in Sri Lanka despite a high-level political commitment to address the issues.

The Financial Action Task Force (FATF) said that since November 2017, when Sri Lanka made a high-level political commitment to work with the FATF and the Asia/Pacific Group on Money Laundering (APG) to strengthen the effectiveness of its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regime and address any related technical deficiencies, Sri Lanka has taken steps towards improving its AML/CFT regime, including by issuing Customer Due Diligence (CDD) rules for Designated. Non-Financial Businesses and Professions (DNFBPs).

FATF says Sri Lanka should continue to work on implementing its action plan to address its deficiencies, including by: (1) enacting amendments to the Mutual Assistance in Criminal Matters Act (MACMA) to ensure that mutual legal assistance may be provided on the basis of reciprocity; (2) issuing any necessary guidance and ensuring that implementation of the CDD rules has begun, by way of supervisory actions; (3) enhancing risk-based supervision and outreach to FIs and high-risk DNFBPs, including through prompt and dissuasive enforcement actions and sanctions, as appropriate; (4) providing case studies and statistics to demonstrate that competent authorities can obtain beneficial ownership information in relation to legal persons in a timely manner; (5) issuing a revised Trust Ordinance and demonstrating that implementation has begun; and (6) establishing a TFS regime to implement relevant UNSCRs related to Iran, and demonstrating effective implementation on this and the UN Regulation related to the DPRK (North Korea).

As part of its on-going review of compliance with the AML/CFT standards, the FATF identifies jurisdictions that have strategic AML/CFT deficiencies for which they have developed an action plan with the FATF. While the situations differ among each jurisdiction, each jurisdiction has provided a written high-level political commitment to address the identified deficiencies. The FATF welcomes these commitments.

A number of jurisdictions have not yet been reviewed by the FATF. The FATF continues to identify additional jurisdictions, on an on-going basis, that pose a risk to the international financial system.

FATF is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions.  The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.

The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas. (Colombo Gazette)