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Money looted by former VIPs: Govt. faces dilemma
The Government’s campaign to recover foreign assets of leaders of the previous Government has set a poser.It is unable to offer a general amnesty to Sri Lankans as an incentive to bring money deposited in foreign banks, particularly in Switzerland. The move prompted Finance Minister Ravi Karunanayake, now on a campaign to shore up foreign exchange reserves, to declare that “no questions would be asked.”
For the moment, the Finance Ministry is to ensure that state agencies, like for example the Department of Inland Revenue, do not initiate any action against those remitting the funds to Sri Lanka. Others who will not initiate action are the Exchange Control Department and the Central Bank.
However, a further elaboration is to come when he presents the Government’s first budget on November 20. There, he is to detail out the categories of people who would benefit from what would in reality be an amnesty. Yet, the legality of Finance Minister Karunanayake’s announcement is being questioned.
A Financial Consultant, who did not wish to be identified, said, “It is illegal for the Finance Minister to say there would be no action by different state agencies when funds from foreign accounts are remitted to Sri Lanka. For example, the Exchange Control Department cannot act on a newspaper report of a news conference. If the Minister gives a written directive, it would be illegal too. No state official would want to be accused of violating the law. The Finance Minister has no legal authority to make such declarations and should first take legal steps to provide safeguards. Who knows how such moneys came to be stacked abroad, whether it is through legal or illegal means.”
The consultant said those remitting such moneys would therefore could become liable even under the Money Laundering Act.
One of the main reasons why the Government cannot use that nomenclature is because of the contacts now under way with a West Asian Government. The move, which follows confessions made by a close associate of a former VVIP family, of the accounts including numbers held by the person and his siblings.
The Government has also received a wealth of information from US agencies like the Department of Justice and the Federal Bureau of Investigations (FBI) with regard to financial involvements by the VVIP family. Local investigators are either on the verge of concluding such investigations or are already busy pursuing those leads.
The Sunday Times revealed exclusively in its issue of May 17 the names and numbers of Sri Lankans who held accounts in the HSBC in Switzerland. Coming in its wake is a directive to all Sri Lankan account holders is one from the Union Bank of Switzerland to close their accounts before September 28. One of the strong conditions made clear to account holders is that no permission would be granted to transfer the accounts in question to other names.