Sri Lanka to tighten forex laws over fraud outflows

New legal measures will be taken by the government in the future to control the outflow of a massive amount of foreign exchange from the country through fraudulent tactics.

Public Security Minister Ananda Wijepala made this statement.

This move aims to crack down on smugglers engaged in illegal money laundering.

The Minister also noted that an amount of USD 85 million left the country during the recent period under the guise of paying for imports.

The Minister revealed that a certain business entity credited an amount of Rs. 12.89 billion to 256 companies located in 26 different countries on 953 occasions.

He also mentioned that another institution illegally transferred an amount of nearly Rs. 13 billion out of the country, utilising four bank accounts.

They utilised those funds by falsely showing that they purchased items such as gold jewellery and hardware.

To prevent such financial crimes from occurring in the future, the weaknesses in the Foreign Exchange Act No. 12, enacted in the year 2017, must be rectified, the Minister pointed out.

The Minister also stated that a reason for this situation was the removal of several important regulations included in the Prevention of Money Laundering Act No. 5 of 2006 in the year 2017.

A special discussion already took place between the President and Central Bank of Sri Lanka officials to plan future actions regarding this matter, Minister Wijepala added.