Government to tackle corruption and money laundering
View(s):The Government will be introducing new regulations to tackle corruption in high places, the nexus between those dealing in money laundering and illicit drugs with key sections of the political leadership.
It is aimed at strengthening intelligence, law enforcement and financial regulatory agencies, a senior official of the Finance Ministry said.
New regulations and guidelines will be presented soon enabling the Department of Foreign Exchange to strictly monitor capital flows and the processes associated with current account transactions and various types of foreign currency/Rupee accounts.
The Commission to Investigate Allegations of Bribery or Corruption (CIABOC) will also be introducing legislation to strengthen existing laws, to combat corruption, he added.
State Minister for Finance Eran Wickramaratne said that the Foreign Exchange Act No. 12 of 2017 could be amended if it has loopholes to encourage and legitimise money laundering.
The Central Bank has said that stern action cannot be taken against money launderers and illicit foreign exchange dealers due to lack of necessary provisions in the Foreign Exchange Act.
Its Governor Indrajith Coomaraswamy revealed that although the Penal Code demands that there ought to be an offence, in the new Act, such offences are loosely defined.
No action can be taken on transactions prior to November 2017 since the old Exchange Control Act was rescinded and replaced, he added.
With the Presidential elections emerging around the corner, the Government is facing an uphill task of strengthening regulations on illegal overseas money transfers being made easier by the new Act, official sources revealed.
In terms of the Act, any person can enter into and deal in foreign exchange in furtherance of current transactions without any exchange control restrictions.
Payments for current transactions means payments which are not for the purpose of transferring capital assets, and includes, without limitation all payments due in connection with foreign trade, other current business including services, and normal short term banking and credit facilities.
It also covers payments due as interest on loans and as net income from other investments, payments of moderate amount for amortization of loans or for depreciation of direct investments; and moderate remittances for family living expenses.
Terrorism financing, money laundering and the trade in illicit drugs are being made easier by the new Foreign Exchange Act which repealed the Exchange Control Act No. 24 of 1953.
(BS)