SL to crack down on terrorist financing with new vigour

From left (front row): Deputy Governor H. A. Karunaratne, Governor Dr. Indrajit Coomaraswamy and Senior Deputy Governor Dr.Nandalal Weerasinghe
Pic by Waruna Wanniarachchi

• To set up new coordinating mechanism between FIU, CID and AG’s Dept. to expedite investigations 
• FIU had flagged several suspicious transactions in the banking system prior to Easter Sunday attacks 
• FIU left out of National Security Council meetings prior to Easter Sunday attacks 
• FATF delegation visit to evaluate SL’s progress on countering money laundering and terrorist financing postponed to Sept. 

By Nishel Fernando 

Sri Lanka will set up a mechanism to improve the coordination between the Financial Intelligence Unit (FIU), the Criminal Investigation Department (CID) and the Attorney General’s Department to expedite investigations into terrorism financing cases in the aftermath of Easter Sunday attacks.   

“We are setting up a much stronger coordination between AG’s Department, the CID and the FIU. Therefore, we will be able to move these cases much faster by having a better sharing of information among these institutes,” Central Bank Governor Dr. Indrajit Coomaraswamy told reporters in Colombo last Friday.

According to Deputy Governor H. A. Karunaratne, the FIU had flagged several suspicious transactions that occurred in the country’s banking system prior to Easter Sunday attacks and information on such were shared with law enforcement agencies.  

“Even after the attacks, the FIU had found certain information, which we shared with law enforcement agencies,” he said.

Although, the FIU usually attends National Security Council meetings, Karunaratne said the FIU was not invited for such meetings in the recent past. However, he said since the Easter Sunday attacks, FIU has been invited for the National Security Council meetings again. 

As the FIU is only linked to the Central Bank administratively, Dr. Coomaraswamy pointed out that the Central Bank was not aware of the details of the reports the FIU had submitted to law enforcement agencies. 

The banks are obliged to report all transactions above Rs.1 million and other suspicious transactions to the FIU. The Governor noted that tracking terrorist financing activities is a difficult task as some of these transactions take place through legitimate channels. 

Moving forward, he pointed out that robust and effective coordination among different State institutions would be crucial for Sri Lanka to curb sources of terrorist financing. 

Meanwhile, Karunaratne revealed that a delegation from the Financial Action Task Force (FATF), the global policy-setter on anti-money laundering and terrorist financing would visit Sri Lanka in September for an on-site inspection, in order to consider recommending Sri Lanka to be removed from the international money laundering list.

The on-site inspection, which was originally scheduled in May, was postponed to September due to April 21 bomb attacks.  

After identifying the lack of progress in international cooperation, supervision, legal persons and arrangements and targeted financial sanctions on proliferations (North Korea and Iran), the FATF placed Sri Lanka in its ‘grey list’ while providing a time-bound action plan for Sri Lanka to improve its position.