FIU on alert for AML abuses
Sri Lanka’s Financial Intelligence Unit (FIU) is probing several entities under the anti-money laundering (AML) space for AML violations, top sources said.
This has come on the back of FIU imposing administrative penalties of Rs. 2.75 million on MCB Bank, Bank of China, and Vogue Jewellers for failing to comply with the Financial Transactions Reporting Act (FTRA) in May-October this year. MCB Bank and Bank of China were fined Rs. 1 million each for failing to report EFT transactions related to trade finance. Vogue Jewellers was fined Rs. 750,000 for failing to meet KYC requirements. The fines have been settled, and the collected penalties have been credited to the Consolidated Fund.
The AML Unit is also awaiting more legal enactments next year, the officials noted. Among these is beneficiary ownership under the Companies Act, the Proceeds of Crime Act, and the Money Laundering Act which needs to be passed in Parliament.
The Financial Action Task Force (FATF) the global standard-setting body that works with jurisdictions to address deficiencies that pose a risk to the international financial system has granted an extension to its Mutual evaluation process slated this year for March 2026. This was done after recognising the country going through multiple elections this year. The mutual evaluation will assess how effectively Sri Lanka has implemented measures to combat money laundering and terrorist financing.
As part of this process, Sri Lanka is mandated to submit a comprehensive technical compliance report containing all relevant materials, including laws, regulations, manuals, procedures, circulars, and Standard Operating Procedures (SOPs) as evidence of compliance. To demonstrate the effectiveness of the AML/CFT measures adopted, Sri Lanka is also required to provide detailed reports on each aspect of effectiveness measurements, supported by credible evidence.
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