Sri Lanka Braces for 2026 AML/CFT Evaluation 📈

Central Bank (CBSL) Governor Dr. Nandalal Weerasinghe warns of "high stakes" as Sri Lanka prepares for its third Mutual Evaluation in 2026, a critical assessment of the nation's anti-money laundering and counter-terrorism financing framework. • Economic Risks of Failure: An adverse outcome could lead to FATF Grey Listing, causing: • Increased scrutiny of cross-border financial transactions. • Higher compliance costs and delays in international payments. • Reduced access to correspondent banking relationships. • Negative impacts on FDI, capital inflows, and remittance flows. • Key Evaluation Metrics: The assessment, coordinated by the Asia Pacific Group (APG), will measure: • Technical compliance with the FATF 40 Recommendations. • Effectiveness against 11 Immediate Outcomes. • Current Progress: Based on provisional 2025 data, the Financial Intelligence Unit (FIU) has: • Strengthened monitoring of stakeholder action plans. • Advanced amendments to core AML/CFT/CPF legislation. • Expanded analysis of Suspicious Transaction Reports (STRs). • Strategic Outlook: The Governor emphasized that "highest political will" and inter-agency coordination (Finance, Defence, Justice) are vital. Success is essential to maintain investor confidence and protect overall economic growth.