Establishment

The FIU-Sri Lanka was established in March 2006 in terms of the provisions of the Financial Transactions Reporting Act No. 06 of 2006 (FTRA) under the Ministry of Finance and Planning.

 

The FIU functions as a unit in the Central Bank of Sri Lanka, in terms of the order made by H.E The President under the Act to be the institution designated to operate the FIU. The FIU was reorganized as a Department in the Central Bank in February 2007 in order to enhance its operations and to act efficiently to discharge its statutory functions by leveraging on the policy-making and regulatory capabilities of the Central Bank.

 

Sri Lanka’s AML/CFT regime comprises of three pieces of legislations;

 

  1. Convention on the Suppression of Terrorist Financing Act, No. 25 of 2005 (CSTFA)
  2. Prevention of Money Laundering Act, No. 05 of 2006 (PMLA)
  3. Financial Transactions Reporting Act, No. 06 of 2006 (FTRA)

 

The Convention on the Suppression of Terrorist Financing Act, No. 25 of 2005 (CSTFA)

 

CSTFA was enacted on 8th August, 2005 in order to give effect to Sri Lanka’s obligations as a signatory to the International Convention on the Suppression of Terrorist Financing adopted by the United Nations on January 10th, 2000. The Act prohibits the financing of terrorist acts, terrorists and terrorist organizations. Further the CSTFA has provisions for freezing of terrorist financing related assets and forfeiture of such assets. CSTFA has been further strengthened through the amendments brought to the act in 2011 and 2013.

 

The Prevention of Money Laundering Act, No.5 of 2006 (PMLA)

 

PMLA which prohibits the Money Laundering was enacted on 6th March 2006. It also sets out the necessary measures to combat money laundering such as freezing, property tracking and forfeiture of assets related to money laundering. The PMLA was further amended in 2011.

 

The Financial Transactions Reporting Act, No.6 of 2006 (FTRA)

 

This Act was certified on 6th March, 2006 and provides for the setting up of a FIU as a National Agency to collect data/ information relating to suspicious financial transactions to facilitate the prevention, detection, investigation and prosecution of the offence of money laundering and the financing of terrorism. It also requires mandated institutions to undertake due diligence measures to combat money laundering and the financing of terrorism.