ECONOMYNEXT – President Anura Kumara Dissanayake issued a stern ultimatum to state institutions, declaring that “good governance” must be proven at home before it can be demonstrated to the world.
Speaking at a meeting at the Presidential Secretariat on Tuesday (03), the President addressed the nation’s top financial and security brass to prepare for a high-stakes international audit that could determine the fate of Sri Lanka’s economic recovery.
Sri Lanka is bracing for its third mutual evaluation in March by the Asia Pacific Group on Money Laundering (APG), the regional affiliate of the global watchdog, the Financial Action Task Force (FATF).
This evaluation scheduled last year was initially delayed by the 2024 elections and will now subject Sri Lanka’s anti-money laundering and counter-terrorism financing (AML/CFT) frameworks to intense scrutiny starting next month.
“…prior to demonstrating our integrity to outside entities, we, as a government, must first take responsibility for our actions and dedicates ourselves to good governance, while inviting all stakeholders to properly and responsibly fulfil their institutional duties toward that objective,” President Dissanayake was quoted as saying by the President Media Division (PMD).
Unlike previous assessments, the 2026 evaluation will follow a revised “Effectiveness” methodology.
It is no longer enough to have laws on paper; Sri Lanka must now prove those laws actually stop criminals.
The urgency behind the President’s meeting is rooted in a painful history with Sri Lanka has been in the Grey Listed twice before, first in 2011 and again in 2017.
Previous listings led to a collapse in correspondent banking relationships, higher borrowing costs, and a significant dent in the country’s sovereign credit ratings, shocks the nation is still struggling to overcome following its 2022 economic crisis.
Faced with a “problematic situation” where single officers were handling multiple roles, President Dissanayake ordered an immediate recruitment drive to bolster the Financial Intelligence Unit (FIU) and other agencies.
To prevent setbacks, he also ordered a special circular to freeze the rotation of trained officers until the audit is complete in November.
Sri Lanka cannot afford to be grey-listed again, analysts say, as a third failure would jeopardize investor confidence and the inflow of foreign direct investment essential for recovery.
A Special Task Force has been given just two weeks to submit a progress report on institutional readiness. (Colombo/February 03/2026)