📈 Sri Lanka Strengthens Anti-Money Laundering Framework Amid Rising Underworld Threats

• Key Statistics & Context: • Over Rs. 226 billion worth of narcotics were seized within a 16-month period, reflecting the massive scale of the illicit drug trade and shadow economy. • Organised criminal networks are increasingly utilizing shell companies, family intermediaries, and financial layering to launder illicit proceeds. • Legislative & Regulatory Measures: • Implementation of AML/CFT amendments, direct Financial Intelligence Unit (FIU) to Inland Revenue Department (IRD) link-ups, and enhanced civil asset forfeiture powers. • Shift toward reversing the burden of proof on unexplained wealth, aligning with international Financial Action Task Force (FATF) standards. • Socio-Economic Impact: • Underworld activities have escalated from localized trade to heavy commercial penetration of narcotics like crystal methamphetamine, affecting urban productivity and public safety across all socio-economic enclaves. • Trade and regulatory shifts aim to target financial masterminds rather than low-level couriers to disrupt network supply chains. • Implementation Concerns: • Provisional regulatory frameworks include penalties without direct court recourse and broad high-risk sector classifications. • Policy experts highlight the risk of permanent, unchecked state enforcement powers once the immediate crisis mitigates.