Financial Transactions Reporting: An Overview of the Sri Lankan Law

Abstract

Financial crimes including money laundering and terrorist financing has become a major burden to the economies of almost all the jurisdictions. Further, the institutions engaged in finance business including banking business are the most exposed institutions to financial crimes as they are doing their business with money which is the most liquid asset. In Sri Lanka, three major legislations namely, Convention on the Suppression of Terrorist Financing Act No 25 of 2005, Prevention of Money Laundering Act No 5 of 2006 and Financial Transactions Reporting Act No 6 of 2006 (FTRA) had been enacted targeting countering such financial crimes. However, FTRA can be identified as the enactment which influences the most in the sense of banking and finance business as it has introduced important guidelines and instructions for the institutions, while setting up the Financial Intelligence Unit. Hence, this paper will discuss the main features of FTRA and its consequence to the institutions engaged in finance business including the snags face in implementing the act. The author uses primary sources viz. acts, codes and guidelines and secondary sources viz. journals, reports, annual reports, electronic resources and books as main sources for this study. Finally, the paper concludes with suggestions to FTRA towards strengthening the legal regime to combat against money laundering and terrorist financing while minimizing afflictions affecting the institutions in complying with FTRA.