This commitment requires Sri Lanka to ensure compliance with UNCAC. Compliance status of the mandatory provisions are as follows:
Article 14- Measures to prevent money-laundering
No compliance update present
Article 14. 1. (a) Institute a comprehensive domestic regulatory and supervisory regime for banks and non-bank financial institutions, including natural or legal persons that provide formal or informal services for the transmission of money or value and other bodies particularly susceptible to money-laundering, within its competence, in order to deter and detect all forms of money-laundering. This regime must emphasize requirements for customer and beneficial owner identification, record-keeping and the reporting of suspicious transactions
Financial Intelligence Unit (FIU)
• As per Financial Transactions Reporting Act No. 06 of 2006 customer identification is mandatory (Sec. 2).
• Financial Intelligence Unit is responsible for receiving Cash Transactions Reports (CTR), Electronic Fund Transfers (EFT) and Suspicious Transaction Reports (STR) from all reporting institutions and for analyzing the data collected to identify financial trails to support prosecution.
• Financial Intelligence Unit also issues rules to the financial and other reporting sectors on customer identification and record keeping.
• The Act does not recognize the concept of high value accounts but Regulation No. 1555/9 of 25th June, 2008, specifies that any financial institution under the Act needs to report to the Financial Intelligence Unit every electronic fund transfer made at the request of a customer, where the amount of such transfer exceeds Rupees One Million (Rs. 1,000,000) or its equivalent in any foreign currency.
• As per Section 5 of the Financial Transactions Reporting Act No. 06 of 2006, institutions are mandated to conduct ongoing due diligence and scrutiny of customers.
• Sections 59 and 60 of the Financial Institutions (CDD, Customer Due Diligence) Rules No. 01 of 2016 requires enhanced scrutiny of people who are deemed politically exposed persons, their family members and close associates. Rules 30 –31 provides for the identification and verification of the identity of beneficial owners of all accounts maintained in financial institutions under the Act.
• The rules also provide for money-laundering risk management and internal controls, know-your-customer (KYC), customer due diligence (CDD), enhanced scrutiny for persons and accounts, correspondent banking, wire transfers and record keeping.
• The Financial Intelligence Unit also created Guidelines on Identification of Beneficial Ownership for Financial Institutions No. 4 of 2018 and explains amongst others what beneficial ownership is, the importance of recognizing the beneficial owner, manner in which it can be hidden, identification and verification of beneficial ownership.
• The 2015 Mutual Evaluation Report (MER) of APG Group on Money Laundering identified certain issues in relation to non-financial businesses and professions, legal persons and in relation to beneficial owners. Sri Lanka notes that it is implementing the recommendations proposed in the said report.
National Action Plan for combating Bribery and Corruption 2019-2023 proposes amendments to the Bribery Act No. 11 of 1954, to recognize Money Laundering as an offence under Bribery Act.
Link to National Action Plan for Combating Bribery and Corruption 2019 – 2023
Link to Link to Rules issued by the Financial Intelligence Unit http://www.fiusrilanka.gov.lk/rules_directions.html
Link to Regulation No. 1555/9 of 25th June 2008 http://www.fiusrilanka.gov.lk/docs/Regulations/1555-9/1555_9(E).pdf
Link to the Guidelines on Identification of Beneficial Ownership for Financial Institutions No. 4 of 2018 http://fiusrilanka.gov.lk/docs/Guidelines/2018/Guideline-04-2018.pdf
Link to Financial Transactions Reporting Act No. 06 of 2006 http://www.fiusrilanka.gov.lk/docs/ACTs/FTRA/Financial_Transactions_Reporting_Act_2006-6_(English).pdf
Link to the 2015 Mutual Evaluation Report (MER) of APG Group on Money Laundering http://www.fatf-gafi.org/media/fatf/documents/reports/mer-fsrb/APG-Mutual-Evaluation-Report-Sri-Lanka-2015.pdf
Link to Sri Lanka listing in the Financial Action Task Force and measures initiated by Sri Lanka to improve Global AML/CFT Standards https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/press/pr/press_20180215_SL_Listing_in_Financial_Action_Task_Force_and_Measures_Initiated_by_SL_e.pdf