Sri Lanka has been flagged by several international banks as a high risk jurisdiction in relation to money laundering in leaked documents analysed by hundreds of journalists worldwide.
The Sunday Times was part of this global effort led by the International Consortium of Investigative Journalists, together with BuzzFeed News and 108 other media partners in 88 countries. We spent 16 months organization and analyzing leaked documents dubbed the FinCEN files.
The stories broke around the world on Sunday. The journalistic investigative effort was based on Suspicious Activity Reports (SARs) which are records of money movements banks compile and submit to the US Department of the Treasury, when they suspect a possibly suspicious activity.
The cross-border investigation exposes how banks and regulators have failed the public by allowing dirty money to flow unchecked around the globe. It shows how politicians, crooks, and tycoons – from Benin to Venezuela to Turkmenistan – profit at the expense of governments and ordinary people.
Among the trove of documents are several SARS relating to transactions involving Sri Lankans. These have been flagged on the basis that Sri Lanka is a high risk jurisdiction for money laundering and other financial crimes, lumped alongside countries like UAE, India, Cyprus, Egypt and Indonesia.
Banks, money exchanges, securities brokers, casinos and other financial institutions are required to file suspicious activity reports to the U.S. Treasury’s Financial Crimes Enforcement Network.
The SARs in the FinCEN Files were mostly filed by a few large banks: Deutsche Bank (982), Bank of New York Mellon (325), Standard Chartered Bank (232), JP Morgan Chase (107), Barclays (104) and HSBC Bank (73). Together they filed more than 85% of all SARs in the leak.
Among factors that may spark are SAR are insider trading; transactions linked to money laundering, terrorism financing or other crimes; odd dealings; transactions by individuals known or suspected to have links to criminal or terrorist organizations; and law enforcement surveillance requests.
In FinCEN Files, the main trigger was suspicion of money laundering--the disguising the source of illegally-obtained money, in an effort to make it appear legitimate. When criminals launder their dirty money, the “washing machine” that they use is the global financial system.
The leak contains 2,100 documents, mostly sent by banks to the US authorities between 2000 and 2017.