Money laundering and auditing
The library discussion at CIMA earlier last week
was entitled: “What could put an accountant behind bars?”
To say it was an unusual topic was a bit of an understatement, but
when it was explained that it was to do with the passing of the
Financial Transactions Reporting and Anti-Money Laundering laws
earlier this year, it made more sense.
For the two lawyers brought in to explain the
aspects of the laws, even they weren’t 100 percent sure of
all it included, but as Kithsiri Gunawardena, head of the Legal
Department at Lanka Orix Leasing, said the law was passed (in parliament)
in five minutes, which does seem to be a bit lax.
It was Mr. Gunawardena’s job to explain
what it meant as far as money laundering went, while Neomal Goonewardene,
a partner at Nithya Partners, a law firm, was to explain what penalties
were involved. Both lawyers were not too impressed with the speed
of the passing into law, noting that certain details were vague
and difficult to interpret.
Dealing with money-laun dering, they said it is
defined as the process by which cash and property gotten by illegal
means is converted into money or property that was acquired legally,
As for the application of the law as to what someone
has to do to fall foul of it, here someone has to engage directly
or indirectly in the process of acquiring cash and property via
unlawful activities; this also includes receiving, possession and
concealment. If caught laundering, a fine of the value of the cash
or property, to a maximum of three times, is delivered. The unlawful
activities to attain money cover a multitude of sins from dealing
in drugs, to terrorists, to trafficking people, to cyber crimes.
For an accountant, if he or she feels that such
activities are going on that person is obliged to disclose such
practices, even if confidentiality contracts have been signed.
Mr. Gunawardena said the best thing was to get
to know your customer inside out to ensure everything is above board,
but not to the extent or hiring a private detective.
He talked more about the actual law and what it
means if you get on the wrong side of it. But first he said both
laws were a worry as they were not well worded and could lead to
a lot of confusion. After explaining the numerous ways that can
be used to fall foul of the law, he went on to explain what has
to be done if a person is thought to be acting suspicious.
|A section of the audience listening intently
during the lawyers’ explaination.
If someone or some company is thought to be money-laundering,
they must be reported to the Finance Intelligence Unit (FIU), under
the Central Bank. But remember if you do report such a case, you
can get into trouble if you talk about it to anyone outside the
FIU. If a person is found to have broken that rule, they are liable
to a fine of up to Rs 1 million, but not a prison sentence.
Mr Goonawardena said that if illegal activities
are discovered it’s up to the auditor and his or her firm
to discourage the client from continuing the practice. Now these
are just the tip of the iceberg for the rules and fines that are
included in the laws, which do seem to have been rather rushed.
As someone commented the other night:
“If this was the US the bill would have
gone before countless committees and been heavily debated in the
Senate and Congress, but here, I guess not.”
And remember, any transfer of over Rs 500,000 (or equivalent in
foreign currency) by law now also has to be reported to the FIU.
DHL role in bringing Mission Impossible to Sri Lanka
The pulse racing action thriller "Mission:
Impossible III” premiered in Sri Lanka last week at the Liberty
Cinema in Colombo on the same day it opened in theatres across the
U.S. through DHL, the official shipping and logistics partner for
the motion picture.
The night’s events began with the DHL van
delivering the MI3 film reel to the Liberty Cinema just moments
before the screening of the movie. The DHL delivery van escorted
by a motorcade rushed along the Galle road from Galle Face Green
up to the Liberty Cinema to deliver the MI3 film reel on time. Invitees
for the MI3 premier in Sri Lanka included leading artists from the
film and music industry, corporate heads and DHL-MI3 promotion winners.
|DHL Country manager Chaminda Hewamallika (left)
handing over the MI3 movie reel to EAP Director of operations
In the most highly anticipated action-thriller
of 2006, Tom Cruise returns to one of his signature roles as Secret
Agent Ethan Hunt, who confronts the toughest villain he’s
ever faced – Owen Davian, an international weapons supplier.
with no remorse and conscience.
DHL, played a pivotal role behind the cameras
in arranging a charter flight from Beijing to Los Angeles, to packing,
crating, and shipping technical equipment to numerous filming locations
in Italy, the United States, China and Germany.
Motivational speaker at CIMA Business Leaders’
World renowned author of international best-seller
“You Can Win,” and motivational speaker, Shiv Khera,
will lead the top list of speakers at the CIMA Business Leaders’
summit 2006 from June 1 to 3.
Mr Khera, who works to inspire people and help
them realise their true potential, will present a paper entitled
“Winners don’t do different things, they do things differently”.
He will give real-life examples and motivational stories and offer
practical advice to help delegates embrace a more positive, successful
way of life to realize their true potential.
Mr Khera is probably the best example of the success
of his philosophy and methods. From humble beginnings in India,
he moved to the USA and experienced his own share of struggle and
failure before attending a motivational lecture by Norman Vincent
Peale that changed his life. “After that lecture, I realized
that I was my own biggest problem, and then the direction of my
life changed”, Mr Khera said. Now based in Singapore, he has
followed up his original million-sales book with the publication
of two more best-sellers - Living With Honor and Freedom is Not
Central Bank's new facility for investors in government
Central Bank of Sri Lanka has introduced a new
system called LankaSecureNet, to enable investors of government
securities to obtain details on their investments at any point of
time through the Internet.
The facility provided free of charge, allows account
holders to view details of his/her investments, instantaneously
and would also enable investors, especially the corporate investors
to carry out daily reconciliation on their investments in government
securities, the bank said in a statement.
Through this system, investors of government securities
are able to obtain information on their transactions, interest income
and outstanding balances of scripless Treasury Bills and Treasury
Bonds. In addition, historical information relating to investments
on Treasury Bills and Treasury Bonds also can be obtained through
With the termination of issuing scrip securities,
the Central Bank has taken steps to issue the following statements
to investors confirming their transactions, receivables and outstanding
balances: statement of transactions; statement of payments and statement
All transactions which take place during a month
are indicated in the statement of transactions, which is issued
monthly. The details of all maturity payments and interest payments
are conveyed to investors by the statement of payments, which is
issued soon after the payments are made. The statement of holdings,
issued bi-annually on June 30 and December 31 each year, gives information
on total holdings of an investor.
"It is expected that this facility would
contribute to widen the government securities market by providing
the investors with up to date information on their investments in
government securities," the bank said.
Eco friendly supplements to urea and super phosphate
Dr. Arun Laxman Agricultural Biotechnologist
Although agriculture in Sri Lanka is driven by
technology, yields recorded by many crops show declining trends,
which is a matter of great concern. The main reason for a yield
plateau is the deterioration in soil wealth and due to the exploitation
and mismanagement of this vital resource. Soil, the basic input
for agriculture is considered a living entity. The various micro
and macro organisms add life to the soil by their presence and activities.
The beneficial microorganisms are responsible for increasing nutrient
availability to crops by the biological processes such as Nitrogen
fixation, Phosphorus solubilisation, and plant growth promoter’s
They also help the crop plants by suppressing
plant pathogens in the soil by antibiosis and competition. Unfortunately
due to the excessive usage of toxic chemicals and minimum usage
of organic manure the populations of these beneficial microorganisms
are badly affected resulting in poor soil fertility. Hence rejuvenating
our soil system is a crucial need that will help to overcome the
yield barrier. The soil can be rejuvenated through various eco friendly
agro inputs such as bio-fertilizers, enriched vermicompost, Plant
Growth Promoting Pseudomonads (PGPP) etc. These microbial inoculants
not only help to improve the soil fertility but also minimize the
requirement of the chemical fertilizers such as urea and Super phosphate.
Biological routes of improving soil fertility for
optimum crop production are vital components of integrated nutrient
supply systems. These routes are operated by microorganisms who
either synthesize plant usable forms of nutrients (N2 to NH4) or
increase the availability and root accessibility of nutrients already
present in the soils, as in the case of Phosphorus. Though most
of these organisms are present in the soil and have been on the
job for centuries, they have received much attention recently as
potential bio inputs for sustainable agriculture. Due to several
reasons such as the awareness on organic farming, escalation in
the cost of urea etc., their importance is on the increase and therefore
their production and distribution aspects assume practical significance.
Such microorganisms have somehow come to be called as "bio-fertilizers."
significance of bio-fertilizers
Biological N-fixation accounts for 69% of total N-fixation
(including fertilizer industry) in the world and non-biological
processes for 31%. Inoculation with Rhizobium can help legume crops
to meet up to 80-90% of their N needs and the treatment increases
grain yield by 10-15% under on-farm conditions. Azotobacter chroococcum
fixes atmospheric nitrogen and provide nitrogen to the crop in a
balanced way. Azotobacter also contributes to drought and disease
resistance by improving the soil physical properties and by secreting
various growth promoting substances.
Blue green algae can add about 20-25kg N/ha to
rice fields and to that extent fertilizer N can be saved or supplemented.
In addition, BGA have been shown to benefit the rice plants by supplying
growth promoting substances such as gibberellic and indole acetic
acid. Azospirillum and Azotobacter have also shown promise as bio-fertilizer.
At present there is a great demand for bio-fertilizers from the
One tonne Rhizobium/ Azotobacter/Azospirillum
inoculant is equivalent to 100 tonne of fertilizer N (considering
minimum N-fixation of 50 kg/ha) and 1 tonne of BGA is equivalent
to 20 tonne of fertilizer N (considering minimum N-fixation of 20
For coconut the bacteria Azotobacter and Pseudomonas
are highly effective in providing nitrogen and phosphorus. In liquid
formulation these bacterium can be separately applied around the
root zone at 50 ml / tree. Upon application these Azotobacter will
multiply in million numbers and improve the soil properties by secreting
huge quantities of polysaccharides. More importantly they also fix
atmospheric nitrogen and provide nitrogen to the coconut crop in
a balanced way. This results in higher nut yield with better oil
content. The other bacterium Pseudomonas fluorescens will supply
phosphorus to the coconut tree besides conferring disease resistance.
The organic matter content of tea and cardomum
soils in Sri Lanka is relatively good and hence application of bio-fertilizers
will always result in better crop response. For plantation crops
the bacteria Azotobacter / Azospirillum are highly suited in satisfying
the nitrogen requirement. The liquid or powder preparation of these
bacteria containing 108 cells per ml or per gram is applied around
the root zone of the crops at 3 litres or 4 kg per acre. In plantation
crops application of Azotobacter/ Azospirillum also provides drought
and disease resistance by improving the soil physical properties
and by secreting various growth promoting substances.
Several microbes (viruses, bacteria and fungi)
are being developed as suitable bio-pesticides for management of
insect and nematodal pests. Some fungi have good potential by their
use as bionematicides to control nematodal pest of vegetables, fruit
and cereal crops. Some bacterial and fungal products are also in
use to control diseases of roots and shoots of plants. Pseudomonas
fluorescens is multi beneficial bacterium. This bacterium is a potential
bionematicide and controls nematodes in cardamom, potato and other
vegetable crops, fruits and cereal crops. These bacterial metabolites
are highly effective to control roots and shoot diseases (especially
rot and wilt) of plants. Pseudomonas fluorescens controls nematode
and diseases by combination of antagonistic interactions such as
parasitism, antibiosis and competition. This bacterium also secretes
various organic acids that help in the solubilization of insoluble
phosphorus and hence the phosphorous availability to crops is increased.
These eco-friendly microbial inoculants are a
boon to boost the yield in a sustained manner and are considered
to be the vital components of organic or bio farming.
Hence the usage of biofertilizers and bio pesticides
would help the farmers to minimize the over dependence of toxic
and costly agro chemicals. The need of the hour is to believe and
apply the technology through quality products containing elite microbial
strains that are native of Sri lanka.
(The writer could be reached at firstname.lastname@example.org)