CBSL to crackdown on dubious fund arrangement requests

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Top officials of the Central Bank of Sri Lanka (CBSL) have decided to crack down on dubious dollar fund arrangement requests which are heightened over the prevailing exchange rate crisis of the Island nation, officials said.

“Every day we have receiving a considerable number of requests from various informal parties showing their interest in funding the Sri Lankan development process. Some of requests are even received through well-known businessmen, politicians and other highly respected people in the society’’, officials revealed.

According to them, the Financial Intelligence Unit (FIU) of the CBSL is conducting investigations to verify the legitimacy of those funding requests.

According to FIU observations, there were serious doubts about the main funding sources of most of these requests. Some parties even have serious money laundering links and some were fake requests

Officials also said that the amount of money promised to be brought to the country by some parties was more than the value of the entire Gross Domestic Product of Sri Lanka.

“We have told certain parties that if they really wants to help the country via legitimate fund transfer process, first invest a several millions of dollars in government securities market and show their patriotism. But those people are not willing to accept our request. Instead, they said that the relevant funds can be used for the infrastructure development,” officials asserted.

It is also stated that there have been requests to bring these funds to Sri Lanka through various methods apart from the Common Electronic Fund Transfer Switch (CEFTS) currently in operation in Sri Lanka. However, considering the dubiousness of all those requests, all requests were rejected, officials said.

CBSL is empowered by the Payment and Settlement Systems (PSS) Act to regulate and supervise payment, clearing and settlement systems, prescribing policies and setting standards to regulate and supervise all payment and settlement systems in the country.

Therefore, they have to be compliant with the Financial Action Task Force (FATF) rules and regulations. FATF is the global money laundering and terrorist financing watchdog.

The European Commission has de-listed Sri Lanka from its list of High Risk Third Countries with Anti- Money Laundering and Countering the Financing of Terrorism Strategic Deficiencies published on May 07, 2020. Sri Lanka was listed as a high risk third country by the EU in February 2018, subsequent to Sri Lanka being identified by the FATF as a jurisdiction with strategic AML/CFT deficiencies in its Compliance Document which is more commonly identified as ‘the Grey List’ in October 2017. Upon listing, a time bound Action Plan to address the strategic deficiencies identified was assigned to Sri Lanka.

By Ishara Gamage