Political will leading the charge to combat financial crimes
Sri Lanka has never before witnessed such high levels of political will and commitment, along with interagency coordination to combat money laundering, experts say.
With the start of the 2nd National Risk Assessment (NRA) in 2021, Sri Lanka, in 2023, adopted a National Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) (AML/CFT) Policy for the following five years and initiated formal preparations for the Mutual Evaluation (ME) coordinated by the Asia/Pacific Group on Money Laundering (APG), establishing institution-wise action plans and a high-level AML/CFT Task Force to oversee these efforts.
This Task Force, reconstituted in December 2024, includes high-level representatives from various sectors, including Cabinet Ministers, to ensure comprehensive oversight and interagency cooperation. In 2024, Sri Lanka focused on operationalising its Action Plans through extensive stakeholder engagement and formalising data collection processes. Public-Private Partnerships were also emphasised to enhance the private sector’s understanding of ML/TF risks. Eranga Weeraratne, Deputy Minister of Digital Economy, told the Sunday Times Business that his ministry is forming the concept paper on developing a regulatory framework for Virtual Assets and Service Providers (VASPs), including cryptocurrencies.
“We had a meeting with all the members of the subcommittee set up under the National Coordinating Committee (NCC) to produce the proposal with best practices from regional countries in this regard. The concept paper is in formation, and we will be sharing it with the committee members at the next meeting.” He said that the paper will be submitted to the Cabinet, and the expectation is to have the framework ready by the second quarter of this year.
This comes as Sri Lanka prepares for its 3rd ME coordinated by the APG, focusing on enhancing its AML/CFT framework. The groundwork for this preparation began long ago under the guidance of the NCC, which is chaired by the Central Bank (CB) Governor. The legislative reform programme is a critical component of the ME preparation, with several key acts advancing through the legislative process, Subhani Keerthiratne, Director, Financial Intelligence Unit of the CB, told the Sunday Times Business.
“To ensure readiness, a mock evaluation was conducted in 2025, leading to the refinement of Action Plans based on high-priority recommendations.
The third NRA was conducted with the participation of more than 200 experts representing 86 public and private institutions. The National AML/CFT Policy is being updated, and the second phase of the mock evaluation is being conducted now. A centralised Project Office and Project Management Office were established to coordinate ME-related activities and document preparation. Key submission documents, including the Risk & Context Report, Technical Compliance Report, and Effectiveness Report, are being drafted for submission in early 2026, ahead of the on-site assessment scheduled for late 2026.”
She added that to facilitate the final phase of preparation, it has been requested to consider the upcoming ME as a national state priority.
The progress made thus far was communicated to the President on Tuesday, she said. The President urged expedited technical amendments to existing legislation, addressed human resource shortages, and directed swift action on staff retention during the evaluation process.
Addressing the discussion, the President emphasised that before demonstrating integrity to external entities, the government must first take responsibility for its own actions and remain committed to ensuring good governance.
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