Laws to tackle ‘on-the-way’ loot

Sri Lanka is struggling with pieces of legislation on anti money laundering to bring rogues to justice. While there are at least three Acts that need re-hauling, the Ministry of Justice will be hard at work to write laws dealing with confiscations of money laundering, officials say.

One of the major new laws will be a ‘Proceeds of Crime Act’ which provides for the confiscation or civil recovery of the profits from money laundering. “We don’t know how to manage forfeited funds or assets from money laundering. Now the cash recovered from terrorism, drug trafficking etc (which are also connected to money laundering) are credited to the Deputy Secretary Treasury (DST) account. This new law will deal with a wide range of matters relevant to proceeds of crime such as civil recovery of proceeds of crime from unconvinced individuals, taxation of profits generated from crime, etc,” a senior Treasury source said.

The official said that there’re lapses with regard to three laws – Financial Transaction Reporting Act (FTRA), Trust Ordinance and Prevention of Money Laundering Act (PMLA) that the Ministry of Justice is amending with Central Bank’s (CB) assistance.

He said that the FTRA will include basic crimes which are emerging as money laundering trends. He said that tax evasion is such an offence and are called ‘predicate offences’. Piracy of products is another predicate offence.

The legal assistance on criminal matters where assistance is provided to countries on money laundering is limited in Sri Lanka according to the official. The PMLA will be amended to assist other jurisdictions on these things. This came on the back of the 20th Annual Meeting of the Asia/Pacific Group on Money Laundering held this week in Colombo, arranged by the Financial Intelligence Unit of the CB at the Hilton Colombo which saw participation of local and foreign delegates.

Asia/Pacific Group on Money Laundering (APGML) Executive Secretary Dr Gordon Hook told media at the wrap up conference that emerging trends in money laundering are purchase of portable valuable commodities such as gems, precious metals, digital currencies (Bitcoins) and remittance systems. Direct exchange of heroin for gold bullion, wire transfers to electronically transfer funds between financial institutions and often to another jurisdiction to avoid detection and confiscation, abuse of non-profit organisations used to raise terrorist funds, obscure the source and nature of funds and to distribute terrorist finance, investment in capital markets to obscure the source of proceeds of crime to purchase negotiable instruments, often exploiting relatively low reporting requirements and use of shell companies/corporations to obscure the identity of persons controlling funds and exploit relatively low reporting requirements are some emerging money laundering trends.

In purchasing valuable assets (real estate, race horses, vehicles, etc) criminal proceeds are invested in high-value negotiable goods to take advantage of reduced reporting requirements to obscure the source of proceeds of crime.(DEC)

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