Fraudulent dollar flight Govt. to bring fresh laws to curb money laundering

• Transactions carried out by exploiting loopholes in the Foreign Exchange Act No. 12 of 2017
• US$85Mn transferred under the guise of import payments
• Rs. 12.89Bn transferred through 953 transactions to 256 companies in 26 countries

By Kelum Bandara

In the wake of tens of millions of US dollars being transferred out of the country through fraudulent transactions, the government is planning to strengthen laws governing money laundering by introducing fresh legal amendments, Public Security Minister Ananda Wijepala said. 
Earlier, the Minister told Parliament that as much as US$85 million had been transferred out of the country under the guise of import payments. 
He said that, according to one investigation, a company had transferred Rs. 12.89 billion through 953 transactions to 256 companies in 26 countries, resulting in an outflow of US$42.7 million. 
A second investigation found that another company had allegedly transferred around Rs. 13 billion overseas through four bank accounts while claiming to import items such as hardware, bathroom fittings, and gold products. This resulted in a further loss of US$43 million. 
In response to a query by Daily Mirror on measures to prevent such crimes in the future, he said a new law would be introduced.

He added that such fraudulent transactions had been carried out by exploiting loopholes in the Foreign Exchange Act No. 12 of 2017, which was introduced by the Yahapalana government to liberalise foreign exchange flows. 
He said the Act had removed certain provisions of the Money Laundering Act No. 5 of 2006, including those that classified foreign exchange violations as predicate offences for money laundering. The Minister further said that President Anura Kumara Dissanayake had held a meeting with Central Bank officials, including those from the Financial Intelligence Unit (FIU), to discuss necessary measures. 
“We will introduce these provisions in the form of fresh amendments to the existing laws. The Finance Ministry will be working on this,” he said.