📈 Govt to Restore Criminal Sanctions for Foreign Exchange Fraud

• Legal Reform: The Government is preparing a Cabinet paper to amend the Foreign Exchange Act, No. 12 of 2017, reclassifying serious FX violations from civil breaches back to criminal offences. • Investigation Scale: The Criminal Investigation Department (CID) uncovered approximately US$ 715 Mn remitted overseas (Jan 2023–Mar 2026) through 105 shell companies using fake import documentation. • Network Scope: Investigations identified 55 individuals, 227 bank accounts, and around 24,300 telegraphic transfers across 13 state and private banks, revealing alleged links to international money laundering and drug trafficking networks. • Key Legal Gap: Decriminalisation in 2017 removed police jurisdiction to prosecute FX violations directly, forcing law enforcement to prove separate predicate crimes like narcotics trafficking to initiate proceedings. • Policy Scope: Criminal liability will focus solely on serious fraud, false documentation, and fraudulent advance payments, while procedural non-compliance will continue to carry civil penalties to safeguard legitimate trade and cross-border transactions.