⚖️ Lawyers Report Only Two Suspicious Transactions in Six Years: CBSL

The Central Bank of Sri Lanka (CBSL) and the Bar Association of Sri Lanka (BASL) highlighted critical compliance gaps in the legal profession regarding Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) frameworks. • Compliance Shortfall: Sri Lankan legal professionals filed only 2 Suspicious Transaction Reports (STRs) with the Financial Intelligence Unit (FIU) between 2020 and 2026—a figure CBSL Governor Dr. Nandalal Weerasinghe termed "alarming" and well below expectations. • Key Risk Areas: Obligations apply to legal professionals acting as gatekeepers in high-risk activities, particularly real estate, asset management, and the formation/management of companies and trusts. • Regulatory Reform: Three major legislative amendments updating money laundering, financial reporting, and terrorism financing laws were passed this year to align with FATF standards, integrate 2023 IMF governance diagnostic findings, and protect economic stability. • Upcoming Evaluation: The Asia-Pacific Group on Money Laundering (APG) will conduct an on-site assessment from Oct 26 to Nov 6 to test the effectiveness of Sri Lanka's entire AML/CFT ecosystem. • Industry Stance: BASL acknowledged the shortfall, committing to build awareness and address knowledge gaps. Legal experts reiterated that legal professional privilege protects legitimate advice, but cannot be used to shield illicit financial activities.