27 November, 2020

Blog

“No Questions Asked” – Covid-19 Money Laundering Risks Emerge: Transparency International Sri Lanka

Transparency International Sri Lanka (TISL) is concerned by steps taken by the government to enact a “no questions asked” policy on deposits of foreign currency. Whilst TISL recognizes the need for policies to bolster foreign currency reserves, we strongly believe that any new policies should be consistent with Sri Lanka’s anti-money laundering framework.

Gotabaya

TISL Executive Director Asoka Obeyesekere said, “At a time when there is an unprecedented lack of parliamentary and judicial oversight on government actions, coupled with limited proactive disclosure of information – corruption risks and vulnerabilities are exacerbated. It would therefore be unwise for a caretaker government to implement policies which could encourage money laundering, with potentially far reaching detrimental effect to the Sri Lankan economy”.

Sri Lanka was only recently removed from the “Grey List” of the Financial Action Task Force (FATF) and steps including “no questions asked” policies on foreign deposits could have a negative impact on the country’s ability to attract bona fide investment. Furthermore, this contravenes FATF recommendations which set the international standards on combating money laundering, requiring reasonable measures to be taken to ascertain both sources of wealth and sources of funds.

In its report “COVID-19 Related Money Laundering and Terrorist Financing: Risks and Policy Responses” published this week, the FATF continues to recommend risk-based supervision of transactions, which would be contrary to any “no questions asked” policy. Countries with escalating money laundering exposure, risk FATF black listing, which has far reaching consequences on domestic banking and economic activity.

The “no questions asked” policy is reminiscent of a similar invitation extended by then Finance Minister Ravi Karunanayake in late 2015 to local and foreign investors to deposit foreign exchange in Sri Lanka, in special accounts with premium interest rates. Similar concerns were also raised by TISL regarding the potential money laundering risk surrounding the purported foreign direct investment by an Indian politically exposed person with multiple corruption allegations in 2019 for the USD 3.85 Billion Mirijjawila Oil Refinery project in Hambantota. In both these instances, democratic dissent allowed for a broad public debate, which has been rendered near impossible in this case due to the COVID-19 pandemic.

Obeyesekere concluded, “It is important for the government and the Central Bank of Sri Lanka to consider the mid to long term implications of policies which may inadvertently encourage money laundering. This could have serious repercussions on the economic recovery as Sri Lanka emerges from the COVID-19 pandemic” (TISL)

Print Friendly, PDF & Email

Latest comments

  • 10
    7

    The entire world population is now resorting to covering their mouth, nose etc
    corona the racism against the Muslims who were branded as looking like a letter box was universal
    oh what a world?
    now its acceptable

    • 6
      0

      You are not making the right comparisons here I am afraid. The pandemic driven wearing of masks and gloves is not only a ‘preventive’ measure to stop the spread of the virus, but also is ‘temporary’ in nature, until this pandemic ends or a vaccine found. Also, the use of such protective covering is based on science, aimed at everybody regardless of gender or age, in that sense it is non discriminatory and not driven by dogma!

  • 11
    1

    The financial desperation is getting more and more acute. The aid given for COVID-19 seems to have disappeared. Now old P.B.J. is asking government servants to donate their May salaries to the W&Op fund that pays pensions to the spouses of deceased government servants. So lets recount what these extremely stupid government servants have lost. The addtional allowance promised and circularized to each and every pensioner by the UNP government under their budget was cancelled. The increased allowance promised to serving government employees was also cancelled. Now they are being asked to sacrifice their existing salary. So what have these morons who voted overwhelmingly for Gotler gained by doing so. While all of this is going on we hear they want to build more highways. Time for the Rajapuks to re-fill the coffers eh? Aid money pilfering not enough to make it into the FORBES list of the richest?

    • 9
      0

      “The aid given for COVID-19 seems to have disappeared.”
      Was COVID 19 aid handled by the same people that handled the Tsunami aid?
      If it is! if it is you surly cannot expect anything different.

  • 12
    1

    With these crooked brainless clowns who make themselves as ideal jokers, it will be like throwing water on a duck.?
    =
    The coronavirus plague is a blessing to these big-time crooked horuma boruma gannankarayakos.? A translation to my fellow Tamil friends who are justified in not being able to speak in this one country pigeon lingo.
    It means the biggest crooked liar gangsters or thugs.
    =
    They can their illegally obtained funds to be legally brought back to the country, they will be paid a very high interest monthly not a cent will be allowed to rid the nation of its man-made ill’s and all will go into the amude loincloths of the horu rajapuks clan and their fellow uncouth unsavoury gangs of fellow thieves.
    =
    Transparency International is a well respected cleanest of them all NGO with whom I have had a close connection and me without any doubts vouch wholeheartedly for their 2 cents worth of comments.
    =
    In conclusion, the more the black monies that they the obnoxious rulers receive the more illicit transactions will take place and the already beleaguered sad sorry shitty nation will become the biggest shittiest not worth a cent Kota Uda crooks paradise.
    =
    I will be staying far away from this rajapuk developed crook hole. Will be running as quick as I could.
    =
    In an abated breath. R. J.

    • 10
      0

      “With these crooked brainless clowns who make themselves as ideal jokers, it will be like throwing water on a duck.?”
      They sure are crooked but not brainless. Sinhala Buddhists majority voted for the crooks they are the ones that are brainless because they are been royally screwed and they don’t even know it.

  • 4
    0

    SL is now an an authoritarian regime,or, a confirmed pariah state to the world. Many African, South American countries & some middle Eastern countries, North Korea, & the latest, Hungary, are members of this club, so SL is not alone.

    We ‘stood up’ to the world when we showed 2 fingers to human rights abuse allegations because that was the way to eradicate terrorism & the grateful nation ignored allegations of massive corruption & mismanagement of public funds, even murder, as baseless. Of course, the law enforcement & the judiciary were happy to comply that no contradictory evidence existed. Now, we have faith on the same lot to save the country for the second time (as stated by the President’s advisory board of Buddhist monks) by eradicating the pandemic with ‘justifiable’ draconian laws, & in the process, who gives a monkey’s about money laundering? Anyway, money laundering is nothing new. We had the best Finance Minister of South Asia inviting those with excess money lying around to invest in SL. There would be no questions asked, a waste of time, probably from his own experience with his wife having a few million in the safe not knowing where it came from. It’s all about saving the nation. As the wonder of Asia with many countries jealous of SL’s achievements, (not necessarily as a pariah state), FDI & joint industrial ventures, easy access to markets for exports & international aid maybe hard to come by, apart from Chinese bail outs at commercial rates.

    Just like the ‘dear leader’ of North Korea who knows best for the country, we (at least for over 6 million people) are happy for a saviour of the nation to have total control, albeit, with the assistance of the military if necessary, to build the country. Maybe some ethnic cleansing will also help.

  • 4
    0

    One doesn’t need foreign exchange frauds in this. In Mullaitivu, media says people complaining they have received only Rs 2,000 instead 5,000. Now these thieves are going to buy some locally sitting illegal foreign currency for that money and deposit it in their foreign currency accounts. The the illegal foreign currency (Foreign citizens who do not want the deposit in their names for the fear their income tax) and the Covid-19 theft money, both become as white. But, no real transaction, so no improvement in exchange rate.

    At the start of the week, Exchange rate improved for two reason, 1. Covid-19 Grants & donation, 2. down in real trade(imports). But for two days CB did not publish the rate. Probably it is falling again; that is why. .

  • 3
    0

    Seriously no questions asked whether it was stolen/looted from the country or not in the first place.

    What amount of funds are the Rajapaksa immediate and extended family reinvesting or laundering through Sri Lanka.

  • 2
    0

    Essentially, this government has embraced those who commit international financial crimes as a means to enhancing Sri Lanka’s FOREX reserves. This is yet another moral setback for the country.

Leave A Comment

Comments should not exceed 200 words. Embedding external links and writing in capital letters are discouraged. Commenting is automatically disabled after 7 days and approval may take up to 24 hours. Please read our Comments Policy for further details. Your email address will not be published.