TNA MP Gajendrakumar Ponnambalam ITAK MP Shanakiyan Rasamanickam Argue several provisions exceed FATF’s risk-based framework Claim FATF being used to strengthen Executive at expense of Judiciary and Parliament FIU empowered to prescribe key compliance thresholds through administ…
TNA MP Gajendrakumar Ponnambalam
ITAK MP Shanakiyan Rasamanickam
Argue several provisions exceed FATF’s risk-based framework Claim FATF being used to strengthen Executive at expense of Judiciary and Parliament FIU empowered to prescribe key compliance thresholds through administrative directions Civil society organisations, NGOs and journalists cited as vulnerable to expanded investigative powers Question Police’s asset-freezing powers without prior judicial oversight or evidence
Sri Lanka’s efforts to strengthen its anti-money laundering framework sparked a broader constitutional debate in Parliament yesterday, with Opposition lawmakers warning that provisions in three key financial crime Bills could expand executive and administrative powers beyond what is required under international standards. The Bills, which amend the Prevention of Money Laundering Act, the Financial Transactions Reporting Act, and the Convention on the Suppression of Terrorist Financing Act, form part of Sri Lanka’s efforts to strengthen its anti-money laundering and counter-terrorism financing (AML/CFT) framework in line with Financial Action Task Force (FATF) standards. The Bills were passed with a special majority, with 154 votes in favour while only two votes were cast against. While much of the parliamentary debate centred on the Negombo Prison violence and alleged abuses under previous administrations, a handful of Opposition MPs instead focused on the constitutional implications of the proposed legislation, arguing that several provisions shift authority away from Parliament and the Judiciary towards regulators, investigators, and the Executive. Tamil National Alliance (TNA) MP Gajendrakumar Ponnambalam said Sri Lanka had an obligation to protect the integrity of its financial system and fully comply with FATF recommendations, warning that failure to do so could undermine investor confidence, increase borrowing costs, and expose the country to renewed international scrutiny.
“The issue before this House is whether these Bills are genuinely implementing the FATF standards or whether the FATF is being used as a justification for granting powers that the FATF itself neither requires nor recommends,” he said. Ponnambalam argued that FATF recommendations consistently call for targeted, proportionate, and risk-based regulation, whereas several provisions in the Bills rely on broad administrative discretion while leaving substantive requirements to be prescribed later through rules and directions issued by regulators. Central to his criticism was the expanded role of the Financial Intelligence Unit (FIU). He said Parliament was being asked to enact offences while leaving key transaction thresholds, compliance obligations, and other substantive requirements to be determined later through administrative directions issued by the Head of the FIU. “Parliament is being asked to approve offences today while leaving the substance of the law to be determined tomorrow through administrative directions. That is not how legislation should be enacted in a constitutional democracy,” he said. Ponnambalam also questioned provisions relating to investigative powers, information sharing, and asset freezing, arguing that the Bills expanded executive discretion while reducing meaningful judicial safeguards. He warned that the implications extended beyond financial crime enforcement. “History teaches us that powers granted in the name of security rarely remain confined to their original purpose,” he said. “Today, these powers may be directed against civil society organisations. Tomorrow, they may be directed against journalists. The day after, they may be directed against business.” He urged Parliament to ensure the legislation faithfully reflected FATF standards while preserving judicial oversight, due process, and the constitutional balance between effective law enforcement and individual liberty. Ilankai Tamil Arasu Kachchi (ITAK) MP Shanakiyan Rasamanickam also endorsed stronger anti-corruption and anti-money laundering legislation but questioned provisions permitting Police officers to freeze assets without prior judicial authorisation. He said the proposed amendments would allow Police officers to issue freezing orders for an initial 14-day period and subsequently extend those restrictions before obtaining judicial scrutiny, creating scope for abuse if adequate safeguards were absent. “If a Police officer feels that a particular asset has a link, even without enough evidence, that power is being given to freeze these assets without going to court,” he said. Rasamanickam said the legislation should also be viewed in the context of future governments. “We are for bringing laws to stop corruption. We are for bringing laws to prevent money laundering. But imagine what would happen if the control of these laws falls into the wrong hands, if someday the National People’s Power (NPP) loses power,” he said. The debate exposed the tension running through Sri Lanka’s post-crisis regulatory reforms: how to strengthen financial crime enforcement without fundamentally altering the balance of authority between the Executive, Parliament, and the Judiciary. Neither MP disputed the need for Sri Lanka to comply with FATF standards. Their argument was narrower, but constitutionally significant: that international regulatory obligations should not become a vehicle for permanently expanding executive and administrative authority beyond what those standards require.