A time bound action plan, laws and supervision of non-bank firms like casinos and the gem industries will be introduced under the present set up, Deputy Governor C P J Siriwardene disclosed at a media conference in Colombo recently.
In order to limit money laundering through bearer certificates, the Central Bank required banks to maintain a record of purchasers of these certificates.
A key vulnerability in the Sri Lankan financial system is the existence of SIERA accounts which allow foreign investors to participate directly in the Sri Lankan Stock Exchange.
These accounts have historically allowed for undisclosed principals and beneficial owners.
The Central Bank and Securities Commission have introduced rules which would require better disclosure and CDD procedures prior to establishment of these accounts.
Sri Lanka’s casinos, real estate and the gem and jewellery business have been identified as ‘high risk” areas requiring proper supervision of financial institutions by the European Commission.
Sri Lanka failed to clear its name on grounds that it had not implemented the EU’s Financial Action Task Force (FATF) recommendations made at its meeting in Buenos Aires in October last year and agreed through the International Cooperation Review Group (ICRG).