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Friday June 14th, 2024

Sri Lanka identifies informal money remitters as high-risk under money laundering

Sri Lanka’s central bank has identified informal money remitters who transfer money through hawala and undiyal possessing high-risk in the island nation’s money laundering activity, while real estate agents, banking sector, and finance companies are identified as possessing medium high risk, a report showed.

The Financial Intelligence Unit (FIU) under the Central Bank of Sri Lanka in its latest Sanitized Report of the Second National Risk Assessment (NRA) on Money Laundering and Terrorism Financing (ML/TF) said the overall money laundering terrorist finance risk for the country was assessed as Medium.

Sri Lanka has identified money laundering as one of the key issues that has led to deprive tax revenue to the government. Government officials say the recent tax hikes in line with the IMF conditions for a $3 billion loan has not raised the tax income as expected.

The assessment highlights the most significant ML/TF threats, vulnerabilities, and risks faced by Sri Lanka.

“The NRA is an important step for any jurisdiction to identify, assess and understand its threats and vulnerabilities exposing the country to ML/TF risks and the offences generating the most proceeds of crime,” the Central Bank said in a statement.

“This Assessment is an important resource available to both the public and the private sectors to understand the current illicit finance environment and to educate them of risk mitigation strategies.”

“Further, by better understanding the current risk environment, respective stakeholders, from now onwards can effectively allocate more resources to the high-risk areas to safeguard the integrity of Sri Lanka’s  financial system.”

The NRA has identified Drug Trafficking, Bribery and Corruption, Customs related Offences including Laundering of Trade-Based Proceeds, as the most prevalent predicate offences, where ML threat was rated as medium high.

Fraud, Robbery, Environmental and Natural Resource Crimes recorded as having a medium level of ML threat. Human Smuggling/Trafficking, Tax Offences, Illegal, Unreported and Unregulated Fishing related unlawful activities were assessed as having a medium low ML threat while lower ML threat was observed for Counterfeiting of Currency, it said.

Analysts say Sri Lankan authorities are jointly working with the IMF and World Bank to minimise these risks and raise the government’s tax revenue as well as improve the doing business index to attract more foreign investment into the country.

The island nation declared sovereign debt default last year after facing an unprecedented economic and debt crisis.

The central bank said some of the recommendations made in the NRA includes bringing necessary amendments to relevant laws, introduction of new laws, strengthening institutional framework, capacity building for investigators, prosecutors, judiciary, supervisors and increasing supervision of Designated Non-Finance Businesses and Professions, such as Real Estate Agents, Dealers in Precious Metals and Stones, Casinos, Accountants and Lawyers.

“Further, the need for development of comprehensive databases and taking actions to expedite the prosecutions and convictions on ML/TF were also identified, while improving the interagency co-operation in the fight against ML/TF, was also recommended,” it said.

The assessment covers the period from 2016-2022 and relevant data and statistics were sourced from all stakeholder agencies, some of which were represented in the core working groups. Sri Lanka received technical assistance and the tool kit from the World Bank to carry out the NRA. (Colombo/September 14/2023)

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Sri Lanka opposition leader proposes Grama Rajya system in addition to 13A

Opposition leader Sajith Premadasa (r) – File photo

ECONOMYNEXT — Sri Lanka opposition leader Sajith Premadasa has proposed devolving power to the village level through a Grama Rajya system in addition to implementing the 13th amendment to the constitution.

Speaking at an event in Jaffna on on Wednesday June 12, Premadasa said all provinces will benefit from the 13th amendment.

“Whatever one’s ethnicity, religion, status or region, this country has citizens of equal level. They’re all Sri Lankan citizens.

“There is no division or grouping.  As we give you and every other province what you should be given through the 13th amendment, we must implement a Grama Rajya system,” Premadasa said, addressing a crowd of school children and other attendees.

Premadasa’s assurance of implementing the 13th amendment has already drawn some protest in the south.

A collective of civil society organisations held a protest outside the office of the leader of the opposition in Colombo on Thursday June 12.

Calling itself the ‘Coalition Against Partition of Sri Lanka’, the group carrying national flags marched up to the opposition leader’s office Thursday June 13 morning and demonstrated against the full implementation of the 13th amendment.

“We arrived here today to hand over a missive against devolving police powers, land powers and judicial powers. If Mr Premadasa is inside, come outside,” Jamuni Kamantha Thushara, Chairman of the Citizen’s Movement Against Fraud, Corruption, and Waste, was seen declaring at the site.

“First of all, tell us what we stand to achieve by dividing and giving away the north and east,” said another protestor, warning against bringing the 13th amendment “anywhere here (paththa palaathe)”.

A police officer at the scene the protestors that a secretary to the opposition leader was ready to accept their letter.

“In Kilonochchi, he says the 13th amendment will be implemented. The votes in the north are going to be decisive this election. To win those votes, President Ranil Wickremesinghe, Sajith and Anura Kumara Dissanayake all say they will implement the 13th. We will not allow this country to be divided into nine pieces,” said Thushara.

Ven Balangoda Kassapa Thero, who was arrested on June 06 during a protest against the new Electricity Act, was also seen at Thursday’s protest. The Buddhist monk requested for a debate with Premadasa on the matter of the 13th amendment. (Colombo/Jun12/2024)

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Sri Lanka rupee closes flat at 303.85/95 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed broadly flat at 303.85/95 to the US dollar on Thursday, from 303.80/304.00 to the dollar the previous day, dealers said. Bond yields were down.

A bond maturing on 15.12.2026 closed at 10.00/30 percent, down from 10.20/40 percent.

A bond maturing on 15.10.2027 closed at 10.60/75 percent.

A bond maturing on 01.07.2028 closed at 11.00/15 percent, down from 11.15/40 percent.

A bond maturing on 15.09.2029 closed at 11.80/85 percent.

A bond maturing on 15.05.2030 closed at 11.85/12.05 percent, down from 11.90/12.05 percent.

A bond maturing on 01.10.2032 closed stable at 11.95/12.15 percent. (Colombo/Jun13/2024)

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Sri Lanka sells Rs295bn in 2027 to 2031 bonds

ECONOMYNEXT – Sri Lanka has sold 295 billion rupees in 2027, 2029 and 2031 bonds, data from the state debt office showed.

The debt office sold an offered 60 billion rupees of 15 October 2027 at an average yield of 10.30 percent.

All offered 125 billion rupees of 15 September 2029 bonds were sold at 11.00 percent.

All 110 billion rupees offered of 01 December 2031 bonds were sold at 12.00 percent. (Colombo/May13/2024)

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