In terms of the provisions of the Financial Transactions Reporting Act, No. 6 of 2006 (FTRA), the Financial Intelligence Unit (FIU) of Sri Lanka entered into a Memorandum of Understanding (MoU) with the Inland Revenue Department recently to exchange information in order to facilitate investigations and prosecutions on money laundering and terrorist financing.
Inland Revenue Department Commissioner General Kalyani Dahanayake and FIU Director H. Amarathunga signed the MoU on behalf of the respective institutions in the presence of Central Bank Governor Dr. Indrajit Coomaraswamy, who is also Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) National Coordinating Committee Chairman. The FIU has already entered into similar MoUs with Sri Lanka Customs and Immigration and Emigration Department while arrangements are being made to sign MoUs with other relevant domestic government agencies for the above purpose soon. Money laundering and terrorist financing are internationally and domestically connected financial crimes, which could threaten the stability of the global economic and financial system. With the increase of tax-related crimes all over the world, the Financial Action Task Force (FATF), the international policy setter on AML/CFT, recommends countries to incorporate tax crimes as predicate offence to money laundering. In this background, domestic coordination and cooperation between the FIU and Inland Revenue Department would help strengthen the existing AML mechanism in Sri Lanka in relation to tax evasion.