{"id":210468,"date":"2020-05-12T22:07:00","date_gmt":"2020-05-12T16:37:00","guid":{"rendered":"https:\/\/www.colombotelegraph.com\/?p=210468"},"modified":"2020-05-17T12:28:53","modified_gmt":"2020-05-17T06:58:53","slug":"is-the-eu-encouraging-money-laundering-in-sri-lanka","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/is-the-eu-encouraging-money-laundering-in-sri-lanka\/","title":{"rendered":"Is The EU Encouraging Money Laundering In Sri Lanka?"},"content":{"rendered":"

By\u00a0<\/b>Amrit Muttukumaru<\/a> –<\/b><\/span><\/p>\n

\"\"<\/a>

Amrit Muttukumaru<\/p><\/div>\n

I had to pinch myself\u00a0to believe the \u2018Daily Mirror\u2019 online news item just out (12 May 2020) announcing \u201cEuropean Commission de-lists SL from High Risk Third countries with Anti-Money Laundering\u201d (EU de-lists Sri Lanka<\/a>) This is the last thing<\/b> one expected from the EU in the present post-Covid-19 context\u00a0 <\/span>where Sri Lanka has thrown caution to the wind in the pursuit of foreign remittances at any cost. The EU did not deem it appropriate <\/b>to even remove Sri Lanka from the \u2018BLACKLIST\u2019 <\/b>it <\/b>issued\u00a0 <\/span>in February 2018 for money laundering despite the FATF (Financial Action Task Force) removing the country from its \u2018GREY LIST\u2019 in October 2019. FATF recommendations are\u00a0\u201crecognised as the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard.\u201d\u00a0<\/span><\/i><\/p>\n

It is salutary to recall that the EU issued its \u2018BLACKLIST\u2019 in February 2018 subsequent to the FATF issuing its \u2018GREY LIST\u2019 in November 2017. Let us now see the stance of the FATF? The precursor to the FATF \u2018GREY LIST\u2019 and subsequent EU \u2018BLACKLIST\u2019 was the \u2018invitation\u2019 issued by then Finance Minister Ravi Karunanayake through India\u2019s prestigious publication\u00a0\u2018The Hindu\u2019<\/a>\u00a0of 5 October 2015 to\u00a0\u201cSri Lankans and Indians who had to take back their deposits from banks in Switzerland to place their funds in Sri Lanka\u201d<\/i>. He had further assured that\u00a0\u201cNo questions would be asked\u201d<\/i><\/b>!<\/p>\n

Money Laundering Hub?<\/b><\/span><\/p>\n

If the FATF and the EU are consistent in what they preach, one would have expected them to have issued a stern warning<\/b> to Sri Lanka particularly when in the post-Covid-19 scenario the Central Bank of Sri Lanka (CBSL) has given a <\/b>\u201c<\/i>guarantee\u201d<\/b> that \u201cforex remittances will be exempted from Exchange Control Regulations and taxes and protected under banking secrecy provisions.\u201d Is this not d\u00e9j\u00e0 vu in the context of former Finance Minister Karunanayake\u2019s \u201cNo questions would be asked\u201d <\/i>assurance?<\/p>\n

Although this is applicable for only \u201cthree months commencing from April 2, 2020\u201d will it not open the floodgates for money laundering <\/b>to effectively convert\u00a0black money into white money and destroy the integrity of the country? This is on top of the previous Yahapalana government enacting the contentious \u2018Foreign Exchange Act, No. 12 of 2017\u2019 which while purporting to liberalize foreign exchange transactions also effectively facilitates money laundering and fiscal evasion.<\/p>\n

One can only hope that the Rs. 150 Billion <\/i>Strategy to Revive Economy<\/a> proposal by former CBSL Governor <\/i>Nivard Cabraal<\/b> \u2013 now Senior Adviser, Economic Affairs to PM Mahinda Rajapaksa which envisages \u201cGovernment and Banks to collectively access foreign investors\u201d<\/i> <\/b>will not result in Sri Lanka becoming a regional hub <\/b>for money laundering as a result of the CBSL <\/b>\u201c<\/i>guarantee\u201d<\/b>?<\/p>\n

Illicit Drugs Hub?<\/b><\/span><\/p>\n

The link between money laundering, illicit drugs and funding of terrorism does not require elaboration. \u00a0<\/span><\/p>\n

If frequent detections of large quantities of illegally-trafficked drugs such as heroin is the \u00a0tip of the iceberg, Sri Lanka may well be on the way to becoming a regional hub for illicit drugs. A Reuters Report<\/a> has quoted a \u2018top police official\u2019 as stating \u201cSri Lanka is becoming a hub for cocaine as it is a risk-free\u00a0location with less legal restrictions,\u201d\u00a0<\/span><\/p>\n

There is wide perception of a nexus between drug dealers and politicians. Stories doing the rounds of widespread corruption in the customs establishment in the context of the alleged extravagant lifestyles of many customs officers does nothing to allay the fears one may have in the integrity of the proposed \u2018Colombo International Financial City\u2019.<\/p>\n

It was just the other day on 1 April 2020 that the \u2018Daily Mirror\u2019 had a report captioned \u201cCountry\u2019s largest ever drug haul\u201d <\/b>informing us that \u201cThe Sri Lanka Navy seized a total of 1184.9kilos of drugs, the country\u2019s largest ever drug haul worth of Rs. 12,500 million\u201d<\/p>\n

The state of play in Sri Lanka is such that we have it on the authority of Mangala Samaraweera\u00a0 <\/span>when he was Finance Minister in the Yahapalana government claiming \u201cpersonal knowledge\u201d<\/i><\/b><\/p>\n

that Sri Lanka\u2019s top dealers<\/b> in illicit drugs are some of those holding high posts in some leading NGOs.<\/b> The Sri Lanka Customs <\/b>came under his purview.<\/p>\n

His back peddling a few days later claiming \u201cinadvertence\u201d<\/i> is pathetic<\/b>:<\/p>\n

Readers can listen<\/b> to his words in the link given below and decide for themselves whether there is any likelihood of any \u201cinadvertence\u201d<\/i>?<\/p>\n

Samaraweera\u2019s Damning Allegation<\/a>\u00a0 <\/span>(3:27 onwards)<\/p>\n

Conclusion<\/b><\/span><\/p>\n

In the public interest<\/b> should not the European Union explain its RATIONALE<\/b> for de-listing Sri Lanka from its money laundering label?\u00a0 <\/span>(EU de-lists Sri Lanka<\/a>).<\/p>\n

It will also be interesting to have the stance of the FATF<\/b> in this connection.<\/p>\n

Things are such in Sri Lanka that such concerns are of little or no interest to our mainstream media<\/b> \u2013 particularly business media<\/b> which by and large merely act as the mouthpiece <\/b>of the corporate sector without critical analysis.<\/p>\n","protected":false},"excerpt":{"rendered":"

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