⚠️ UN Warns Sri Lanka Over FATF Rule Over-Application

• Risk Assessment: UN Resident Coordinator Marc-André Franche warned that applying Anti-Money Laundering/Counter-Terrorism Financing (AML/CFT) rules as "blanket measures" on civil society risks failing the FATF Mutual Evaluation, urging for targeted and proportionate enforcement instead. • Sector Impact: Excessively broad restrictions threaten civil society operations, crucial for national resilience, humanitarian response, and poverty reduction alongside the private sector. • Survey Insights (2025): • 69% of surveyed non-profits faced difficulties receiving foreign funding. • 42% were directed by banks to register with the NGO Secretariat without a legal basis. • Nearly 50% reported obstacles when opening new bank accounts; only 17% experienced zero banking issues. • Regulatory & Legislative Concerns: • Over-application of regulatory powers and 2026 amendments to financial transaction and anti-money laundering acts expanded surveillance and asset-management authority. • Proposed NGO registration laws risk replicating arbitrary powers, contradicting international human rights standards. • A calls for inclusive, institutionalized consultations and safeguards against arbitrary asset seizures to protect legitimate non-profit operations.