20 July, 2019

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Is Terrorism Facilitated By Slumbering CBSL & New Foreign Exchange Act?

By Amrit Muttukumaru

Amrit Muttukumaru

Sri Lanka is doing its damnedest to prepare a fertile ground for terrorism by (i) making minorities particularly Tamils and Muslims feel insecure by being treated as inferior to the majority Sinhala-Buddhists who comprise 70% of the population (ii) giving hegemony through constitutional measures and tacit government consent to Sinhala – Buddhists (iii) giving Buddhist clergy undue importance in matters of governance (iv) minorities particularly Muslims being subject to hate speech, violence and economic isolation instigated with impunity by extremists (v) nefarious activities of Sinhala-Buddhist and Muslim extremists not being stopped in their tracks due to reasons of vote bank politics by both major parties – SLPP and UNP (vi) although the long-drawn armed conflict with the LTTE came to a controversial bloody end in 2009 in the absence of credible accountability, the root causes leading to the conflict have still not been adequately addressed (vii) Reconciliation issues continue to fester.

Terrorism is facilitated by money laundering and the trade in illicit drugs being made easier (i) by the new Foreign Exchange Act No. 12 of 2017 effective from 20 November 2017 which repealed the Exchange Control Act No. 24 of 1953 (ii) corruption in high places (iii) nexus between those dealing in money laundering and illicit drugs with key sections of the political leadership, intelligence agencies, law enforcement agencies and financial regulatory agencies.

It has been plausibly argued that the new Foreign Exchange Act No. 12 of 2017 has the potential to encourage and legitimize money laundering.

A precursor to this dangerous Foreign Exchange Act is the ‘invitation’ issued by then Finance Minister Ravi Karunanayake through India’s prestigious publication ‘The Hindu’ of 5 October 2015 to “Sri Lankans and Indians who had to take back their deposits from banks in Switzerland to place their funds in Sri Lanka”. He had further assured that “No questions would be asked”!

In the context of the Act inter alia stating “The Central Bank shall as the agent of the Government, be responsible for implementing the provisions of this Act” one would have expected CBSL Governor Dr. Indrajit Coomaraswamy under whose tenure the new Act became effective to have at the very least publicly cautioned the government against the enactment of such an Act. Not only has he not done so but more reprehensibly he has the audacity to cite this dangerous Act to justify CBSL inaction on Sri Lankans named in the Panama Papers:

“The time period prescribed by the Foreign Exchange Act No. 12 of 2017 to conclude investigations under ECA expired on 19.05.2018 as stipulated in the Foreign Exchange Act No 12 of 2017. These investigations also lapsed on that date.”

On CBSL’s inaction on the Sri Lankan names in the ‘Panama Papers’ he has even cast aspersions on the credibility of the  International Consortium of Investigative Journalists’ by stating:

“After conducting the investigation, no information was revealed on investments as published by ICIJ.” 

A name included in the ‘Panama Papers’ is an erstwhile colleague of  CBSL Governor Coomaraswamy on the Director Board of JKH, arguably the country’s most diversified conglomerate with top tier market capitalization.

The UPSHOT of all this is that in the aftermath of the horrific Easter Sunday carnage, it is reported that security forces have unearthed “assets worth Rs 7 billion” attributed to suspects belonging to the National Thowheed Jamath (NTJ) said to be mainly responsible for the carnage. 

Hub for Illicit Drugs?

Frequent detections of large hauls of heroin, cocaine and other illicit drugs which most likely are the tip of the iceberg would suggest that Sri Lanka has become a regional hub for the trade in illicit drugs in the Asian region. Such an occurrence is only possible under enabling conditions which include lax laws which facilitate money laundering/smuggling and the nexus between sections of the political leadership and bureaucracy with key players in the trade in illicit drugs. Does not the Reuters report “Sri Lanka is becoming a hub for cocaine as it is a risk-free location with less legal restrictions” confirm this position?

The link between money laundering, illicit drugs and funding of terrorism does not require elaboration.  

It is reported that a high profile Sri Lankan arrested in Dubai this year for his alleged involvement in the illicit drugs trade has allegedly deposited as much as  “Rs.10 billion in 23 bank accounts” in Sri Lanka and Dubai. Even if half this sum was deposited in Sri Lankan banks, does it not indicate that the CBSL has been in “deep slumber” in this respect too? One could only speculate as to how many other cases not yet in the public domain have escaped the notice of the CBSL?

Questionable FDIs

It is becoming apparent that for the most part Sri Lanka is only able to attract FDIs mired in controversy. The latest is the “$ 3.85 billion investment for an oil refinery in Hambantota”. One wonders whether this is a replay of the much hyped 2017 Volkswagen vehicle assembly plant in Kuliyapitiya which turned out to be a hoax. Those who hyped the Volkswagen assembly plant are largely the same persons now hyping the purported oil refinery in Hambantota. There was even a “ground breaking ceremony” for the Volkswagen plant.

Even the earlier 2016 $75 million tyre manufacturing plant in Horana is mired in controversy due to its promoter’s alleged involvement in controversial business dealings under the Rajapaksa administration. This case brings into focus the cosy relationship between competing politicians and the raison d’être why competing administrations are reluctant to hold wrongdoers accountable.

EAP Group Sale

The CBSL has failed to disclose whether its claimed ‘due diligence’ in regard to the sale of EAP Group companies has considered the damning allegations in the news report in ‘The Sunday Times’ of 3 June 2018 “Purchase of Edirisinghe Group: Investors in a labyrinth of multiple companies”? 

In particular CBSL has avoided confirming whether there is any truth to the terrible allegation:

“But punitive action is being blocked by the Ministry of Finance which has taken from the Customs Department a file containing evidence against the suspects”

If the CBSL considers the report spurious, why has ‘The Sunday Times’ not been taken to task?

Mano Tittawella former Chairman, EAP Group is currently Senior Adviser to the Minister of Finance under which falls the CBSL.  This is the ground reality in Sri Lanka.

Bond Scam & Money Laundering

In the context of the CBSL being the issuing agency for Treasury Bonds, a key recommendation of the report of the Presidential Commission of Inquiry into the Treasury Bond scam which is possibly the largest financial scam to hit this country since independence was the forensic audit to be carried out by the CBSL.  The report was available in the public domain from 3 January 2018. It is now 17 months since then and the forensic audit is still not in the public domain.  A reason for the delay from Governor Coomaraswamy will be appreciated.

Impunity is so endemic in Sri Lanka that even crucial issues incidental to the bond scam related to possible money laundering thrown up by witnesses at the Presidential Commission  which include possible tax evasion and PEPs being directors of banks do not appear to be even on the CBSL radar.

We await to see whether the CBSL in its forensic audit will even CONSIDER addressing the alleged (i) “millions” encashed “several times” being left on “PTL CEO Kasun Palisena’s chair” (ii) “cash amounting to Rs.145 million” being “dumped” without being “supported by any documentation” in the “Chairman’s safe”

Politically Exposed Persons

On the subject of PEPs (Politically Exposed Persons)  where else in the world would (i) a Senior Deputy Governor of the Central Bank soon after retirement be appointed a Director of a leading bank?(ii) a Chief Justice of the Supreme Court soon after retirement be appointed  a Director of a leading bank? (iii) a highly connected PEP previously Chairman of a leading bank be currently Chairman of a competitor bank?

Thumbs its nose at FATF

Sri Lanka has virtually thumbed its nose at the ‘Grey List’ placed on the country by the FATF (Financial Action Task Force) in November 2017 following which the EU which considers Sri Lanka “high-risk” for money laundering issued its ‘Black List’ in February 2018.

FATF recommendations are “recognised as the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard.”

Notwithstanding the FATF in October 2016 putting Sri Lanka on notice that the country will be assessed on its commitment to combat money laundering and in October 2017 listing the country as having ‘strategic AML/CFT deficiencies’, Sri Lanka in callous disregard made its contentious Foreign Exchange Act, No. 12 of 2017 further liberalizing capital inflows effective from 20 November 2017.

While Dr. Indrajit Coomaraswamy who has been CBSL Governor since 3 July 2016 for 16 months prior to this ruling must bear some responsibility (together with former Governors Messrs. Cabraal and Mahendran) he together with Minister of Finance, Mangala Samaraweera must bear major responsibility for the country continuing to be on the Blacklist. 

This writer wishes to place on record the courageous stand of Mangala Samaraweera in articulating the imperative to have Sri Lanka as a SECULAR State in the context of a multi-ethnic and multi-religious country. Sadly he has been viciously criticized with no support from any of his Cabinet colleagues or even from the State Minister of Finance, Eran Wickramaratne who hails from a very prominent Christian family.   

Conclusion

In the context of little respect for the rule of law, the contentious Foreign Exchange Act No. 12 of 2017  and regulatory agencies such as CBSL for the most part being indifferent, is there no danger that the proposed ‘Colombo International Financial City’ with high end casinos also reportedly being part of the mix, may enhance Sri Lanka’s image as a premier hub for money laundering in the Asian region?

There is a mismatch on the one hand of a country with a weak economy, poor infrastructure and atrocious governance bending over backwards even for questionable FDIs and financial assistance and on the other the swanky high-rise apartments, office blocks, shopping malls and fancy restaurants dotting the city of Colombo with high-end vehicles which would do even a first world country proud. The large Chinese investments are mainly geo-political in nature connected to big power rivalry in the Indian Ocean with its own set of implications. 

At this rate one wonders whether Sri Lanka will ever be removed from the EU ‘Black List’ and the FATF ‘Grey List’? 

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    First published in May 2015, this article reveals not only that the ISIS is a creation of US intelligence, it also confirms that the Caliphate Project was designed in Washington.
    See Screenshots Below from the title page as well as excerpts:
    “…there is the possibility of establishing a declared or undeclared Salafist Principality in eastern Syria (Hasaka and Der Zor), and this is exactly what the supporting powers to the opposition want, in order to isolate the Syrian regime…” (Washington Blog, see below)
    March 13, 2016
    Judicial Watch has – for many years – obtained sensitive U.S. government documents through freedom of information requests and lawsuits.
    The government just produced documents to Judicial Watch in response to a freedom of information suit which show that the West has long supported ISIS. The documents were written by the U.S. Defense Intelligence Agency on August 12, 2012 … years before ISIS burst onto the world stage.
    Here are screenshots from the documents. We have highlighted the relevant parts in yellow:
    Why is this important? It shows that extreme Muslim terrorists – salafists, Muslims Brotherhood, and AQI (i.e. Al Qaeda in Iraq) – have always been the “major forces driving the insurgency in Syria.”
    This verifies what the alternative media has been saying for years: there aren’t any moderate rebels in Syria (and see this, this and this).
    The newly-declassified document continues:
    Yes, you read that correctly:
    … there is the possibility of establishing a declared or undeclared Salafist Principality in eastern Syria (Hasaka and Der Zor), and this is exactly what the supporting powers to the opposition want, in order to isolate the Syrian regime ….
    In other words, the powers supporting the Syrian opposition – the West, our Gulf allies, and Turkey wanted an Islamic caliphate in order to challenge Syrian president Assad.

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      Many thanks Amit: Keep it coming!
      Yes we are still waiting for a report on who funded Zaharan and his network. Saudi and UAE are the known suspects, Drug lord Madush and his Kanjipani friend playing in Dubai and funded Zaharan and CIA distracted Lankan intelligence and armed forces and navy with the drug narrative..
      The US deep state, CIA and SOP – Special Operation Forces – for who the SOFA is meant are the real master minds of the so called drug epidemic.
      Please see this link
      https://www.mintpressnews.com/u-s-special-operations-the-new-face-of-americas-war-machine/256431/US has been running drug wars in South and Central America for years to keep these countries de-stabilized.. and now moving to South and Southeast Asia. Drugs and Money laundering is certainly part of the US SOP SOFA operation, which is why US puppet Bondscam and the joint opposition that is also controlled by US citizen Gota have done nothing about this. Also add the Avant Guard case and you see the US brokered bi-partisan corruption racket between MR’s SLFP and PP and Bondscam Ranils UNP. BOndscam Ranil must be IMPEACHED soon!

      https://www.mintpressnews.com/u-s-special-operations-the-new-face-of-americas-war-machine/256431/

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        “Is Terrorism Facilitated By Slumbering CBSL & New Foreign Exchange Act?”

        That is one of the dumbest questions ever asked in the annals of Lankan “journalism!”

        If you have grudge against Indrajit Coomaraswamy who is one of the classiest governors the CB has ever had and is from the best Lankan stock irrespective of race/cast/ethnicity/religion …….. go and sort it out with him like a man.

        Don’t try to infer utter crap to throw mud at him.

        The Foreign Exchange Act is one of the oldest pieces of legislation fomented in the heyday of Sirima/NM imbecilic “Socialism” experiment. If anything needed changing it was the archaic F/E Act!

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    There were proof of zahrain attack , instead of screening its net work, the priority was the Muslim Minister who helping to discover terrorist and the Burka ( Gonibilla) and hate speech muslim women who publicly display their religion by wearing a scarf of any kind have found they can be targeted for doing so. Why is the monks church fathers and church sister get the respect.

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    It looks It is prereqauisite to bash, Sinhala buddhsits, BBS or Ven. Ghanasara and Maithripala Sirsena if anyone wants to pay and to publish an article in CT.
    I have hard, and I believe that International community wants certain members in the parliament or in certain ministerial positions. So, our Lingerie and Underwear designer is suitable only as foreign minister or as Finance minister. Even Ranil could not, even though Ranil took Banks away from Penthouse Ravi, protect the Sri lankan banks. I heard Ajith Kumaraswamy is saying that he is just doing what the minister and not anything more. I heard American Walmart wants SATHOSA under them. SO, at present Mangala installed some software which would enable to collect data via Internet and analyze where it is can not be or need to control. Even Muthukumaran is not capable of Collecting data on how much really is the total debt that this govt took in various ways. I read, certain things that WB is dojng in Sri lanka is WB’s previous experience in other countries and they simply wrecked those countries.

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    He is at it again attacking Indrajit and making inferences to the present Chairman of JKH Does he not realise that the Chairman was employed overseas before joining JKH and it may be funds he earned at that time
    Having been dumped by CT group AM is now using the other CT to vent his venom on those he envies.

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