Anti-money laundering and counter-terrorist financing measures in Sri Lanka – Mutual Evaluation Report – September 2015 1

Anti-money laundering and counter-terrorist financing (AML/CTF) measures in Sri Lanka Mutual Evaluation

Ratings September 2015 www.fatf-gafi.org/publications/mutualevaluations/documents/mer-sri-lanka-2015.html

Anti-money laundering and counter-terrorist financing measures in Sri Lanka – Mutual Evaluation Report – September 2015

Ratings – Effectiveness (1/3)

2

Immediate outcome of an effective system to combat money laundering (ML) and terrorist financing (TF)

Extent to which Sri Lanka has achieved this objective

1 ML and TF risks are understood and, where appropriate, actions co-ordinated domestically to combat ML and TF

Moderate

2 International co-operation delivers appropriate information, financial intelligence, and evidence, and facilitates action against criminals and their assets

Low

3 Supervisors appropriately supervise, monitor and regulate financial institutions and designated non-financial businesses and professions (DNFBPs) for compliance with AML/CFT requirements commensurate with their risks.

Low

4 Financial institutions and DNFBPs adequately apply AML/CFT preventive measures commensurate with their risks, and report suspicious transactions.

Low

Anti-money laundering and counter-terrorist financing measures in Sri Lanka – Mutual Evaluation Report – September 2015

Ratings – Effectiveness (2/3)

Immediate outcome of an effective system to combat money laundering (ML) and terrorist financing (TF)

Extent to which Sri Lanka has achieved this objective

5 Legal persons and arrangements are prevented from misuse for money laundering or terrorist financing, and information on their beneficial ownership is available to competent authorities without impediments.

Low

6 Financial intelligence and all other relevant information are appropriately used by competent authorities for money laundering and terrorist financing investigations.

Low

7 Money laundering offences and activities are investigated and offenders are prosecuted and subject to effective, proportionate and dissuasive sanctions.

Low

8 Proceeds and instrumentalities of crime are confiscated. Low

3

Anti-money laundering and counter-terrorist financing measures in Sri Lanka – Mutual Evaluation Report – September 2015

Ratings – Effectiveness (3/3)

Immediate outcome of an effective system to combat money laundering (ML) and terrorist financing (TF)

Extent to which Sri Lanka has achieved this objective

9 Terrorist financing offences and activities are investigated and persons who finance terrorism are prosecuted and subject to effective, proportionate and dissuasive sanctions.

Substantial

10 Terrorists, terrorist organisations and terrorist financiers are prevented from raising, moving and using funds, and from abusing the non-profit sector.

Low

11 Persons and entities involved in the proliferation of weapons of mass destruction are prevented from raising, moving and using funds, consistent with the relevant United Nations Security Council Resolutions.

Low

4

Anti-money laundering and counter-terrorist financing measures in Sri Lanka – Mutual Evaluation Report – September 2015

Ratings – Effectiveness

5

0 1

1

9

HighSubstantialModerateLow

Anti-money laundering and counter-terrorist financing measures in Sri Lanka – Mutual Evaluation Report – September 2015

Ratings – technical compliance (1/5)

19-Oct-15 6

AML/CFT POLICIES AND COORDINATION1. Assessing risks & applying a risk-based approach P P P P Partially compliant2. National cooperation and coordination P P P P Partially compliant

MONEY LAUNDERING AND CONFISCATION3. Money laundering offence La La La La Largely compliant4. Confiscation and provisional measures P P P P Partially compliant

TERRORIST FINANCING AND FINANCING OF PROLIFERATION5. Terrorist financing offence CCCC Compliant6. Targeted financial sanctions related to terrorism & terrorist financing La La La La Largely compliant7. Targeted financial sanctions related to proliferation N N N N Non compliant8. Non-profit organisations P P P P Partially compliant

Anti-money laundering and counter-terrorist financing measures in Sri Lanka – Mutual Evaluation Report – September 2015

Ratings – technical compliance (2/5)

19-Oct-15 7

PREVENTIVE MEASURES9. Financial institution secrecy laws La La La La Largely compliant

Customer due diligence and record keeping10. Customer due diligence N N N N Non compliant11. Record keeping La La La La Largely compliant

Additional measures for specific customers and activities12. Politically exposed persons N N N N Non compliant13. Correspondent banking N N N N Non compliant14. Money or value transfer services N N N N Non compliant15. New technologies P P P P Partially compliant16. Wire transfers N N N N Non compliant

Anti-money laundering and counter-terrorist financing measures in Sri Lanka – Mutual Evaluation Report – September 2015

Ratings – technical compliance (3/5)

19-Oct-15 8

PREVENTIVE MEASURES (continued)Reliance, Controls and Financial Groups

17. Reliance on third parties N N N N Non compliant18. Internal controls and foreign branches and subsidiaries P P P P Partially compliant19. Higher-risk countries N N N N Non compliant

Reporting of suspicious transactions20. Reporting of suspicious transactions CCCC Compliant21. Tipping-off and confidentiality CCCC Compliant

Designated non-financial Businesses and Professions (DNFBPs)22. DNFBPs: Customer due diligence N N N N Non compliant23. DNFBPs: Other measures P P P P Partially compliant

Anti-money laundering and counter-terrorist financing measures in Sri Lanka – Mutual Evaluation Report – September 2015

Ratings – technical compliance (4/5)

19-Oct-15 9

24. Transparency and beneficial ownership of legal persons N N N N Non compliant25. Transparency and beneficial ownership of legal arrangements N N N N Non compliant

POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES AND OTHER INSTITUTIONAL MEARegulation and Supervision

26. Regulation and supervision of financial institutions P P P P Partially compliant27. Powers of supervisors CCCC Compliant28. Regulation and supervision of DNFBPs N N N N Non compliant

Operational and Law Enforcement29. Financial intelligence units P P P P Partially compliant30. Responsibilities of law enforcement and investigative authorities CCCC Compliant31. Powers of law enforcement and investigative authorities La La La La Largely compliant32. Cash couriers P P P P Partially compliant

TRANSPARENCY AND BENEFICIAL OWNERSHIP OF LEGAL PERSONS AND ARRANGEMENTS

Anti-money laundering and counter-terrorist financing measures in Sri Lanka – Mutual Evaluation Report – September 2015

Ratings – technical compliance (5/5)

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General Requirements 33. Statistics P P P P Partially compliant34. Guidance and feedback P P P P Partially compliant

Sanctions35. Sanctions P P P P Partially compliant

INTERNATIONAL COOPERATION36. International instruments La La La La Largely compliant37. Mutual legal assistance P P P P Partially compliant38. Mutual legal assistance: freezing and confiscation P P P P Partially compliant39. Extradition La La La La Largely compliant40. Other forms of international cooperation P P P P Partially compliant

POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES AND OTHER INSTITUTIONAL MEASURES (continued)

Anti-money laundering and counter-terrorist financing measures in Sri Lanka – Mutual Evaluation Report – September 2015

Ratings – technical compliance

11

5

7

16

12 Compliant

Largely compliant

Partially compliant

Non compliant