Central Bank freezes TRO bank accounts

The Central Bank said last week it had suspended the bank accounts of the Tamil Rehabilitation Organisation (TRO) as there were “grave doubt as to the purposes of these funds” saying it was likely funds were being channeled towards for terrorist financing.

“Pending the conclusion of investigations by relevant authorities, the Central Bank has suspended all transactions of the TRO accounts out of the funds lying to the credit of such accounts, in terms of the provisions of the Financial Transactions Reporting Act and the Convention on the Suppression of Terrorist Financing Act,” the Bank said in a statement.

These developments came after the Bank’s attention was drawn to the arrests of persons connected to the TRO who are alleged to be involved in terrorist financing, in various parts of the world.

The Ministry of Foreign Affairs has alsobeen informed by several international authorities that investigations in this regard are proceeding and that the offices of the TRO in certain foreign locations have been raided by the respective law enforcement agencies in these countries, the statement said.

The TRO in Sri Lanka, it said, has received large sums of money from its branches in several foreign locations through the banking system in Sri Lanka and continues to receive such funds, purporting to be for humanitarian projects.

On September 4, the Colombo High Court of Colombo reaffirmed the action taken by the Central Bank to suspend all banking transactions on TRO accounts at commercial banks. “Accordingly, the suspension of the TRO accounts has been extended for a period of 6 months in order that the necessary inquiries concerning all transactions could be made, as well as to permit the authorities to consult and advise the relevant law enforcement agencies with regard to the inquiries presently being carried out in this regard,” the Bank said.

It said that Sri Lanka is a signatory to the International Convention for the Suppression of Terrorist Financing adopted by the UN General Assembly on 10/01/2000 and ratified the same on 8/9/2000. The Convention on the Suppression of Terrorist Financing Act No. 25 of 2005 was enacted to give effect to Sri Lanka’s obligations under this Convention. Under the Act, the provision or collection of funds for use in terrorist activity, with the knowledge or belief that such funds could be used for financing a terrorist activity, is an offence. The definition of terrorist financing adopted is the definition contained in the UN International Convention for Suppression of Terrorist Financing.