⚠️ Parliament Passes Key Financial Crime Bills Amid Governance Concerns

Sri Lanka’s Parliament has passed three crucial anti-money laundering and counter-terrorism financing (AML/CFT) Bills with a special majority (154 votes in favor, 2 against). The legislative amendments alter the Prevention of Money Laundering Act, the Financial Transactions Reporting Act, and the Convention on the Suppression of Terrorist Financing Act to align with Financial Action Task Force (FATF) standards. • Key Concerns Raised by Lawmakers: Opposition MPs warn that certain provisions go beyond international requirements, risking a concentration of authority in the Executive and regulators at the expense of Parliament and the Judiciary. • Regulatory & Investigative Powers: • Financial Intelligence Unit (FIU): Head of FIU empowered to prescribe key transaction thresholds and compliance obligations via administrative directions after the law is passed. • Law Enforcement: Police granted powers to freeze assets for an initial 14 days without prior judicial oversight or evidence, causing fears of potential abuse. • Impact on Key Sectors: While compliance is vital to protect investor confidence and lower national borrowing costs, lawmakers warn that expanded investigative powers could eventually target civil society, NGOs, journalists, and the broader business sector.