Sri Lanka's Financial Intelligence Unit is calling on the private sector to properly implement new beneficial ownership disclosure requirements before an international anti-money laundering assessment scheduled for late October and early November.
Sri Lanka faces a critical international anti-money laundering assessment as it prepares for its Third Mutual Evaluation by the Asia/Pacific Group on Money Laundering. According to Central Bank Financial Intelligence Unit Director General Dr. Subhani Keerthiratne, the review will evaluate not only the country's legal framework but also whether anti-money laundering and countering the financing of terrorism (AML/CFT) measures are producing tangible results in practice.
Beneficial ownership transparency remains Sri Lanka's only area of non-compliance with Financial Action Task Force recommendations, making implementation of the new Companies Act provisions a priority. Dr. Keerthiratne emphasised that having laws on the books is insufficient without effective execution. The assessment team will conduct site visits and meet with public and private sector stakeholders to verify implementation across the financial system.
The Financial Intelligence Unit head warned of serious consequences should Sri Lanka face another FATF grey listing. Previous episodes resulted in reduced correspondent banking relationships, enhanced scrutiny from foreign institutions, and higher borrowing costs. Research cited by Dr. Keerthiratne showed that countries placed on the FATF grey list experienced a 7.6% decline in foreign direct investment, with Pakistan's repeated listings estimated to have cost approximately $38 billion in GDP impact between 2009 and 2019.
Authorities have identified private limited companies as a concentration point for money laundering risks, with recent investigations uncovering cases where companies registered under labourers' or drivers' names were used to send substantial funds overseas without corresponding goods arriving in Sri Lanka. Dr. Keerthiratne acknowledged practical implementation challenges raised by company secretaries and other professionals but urged stakeholders to collaborate with regulators to develop workable solutions.
