Cabinet approves criminalising unauthorised forex transfers

Cabinet approval was granted in principle to amend the Foreign Exchange Act, No. 12 of 2017, to introduce unauthorised fund transfers sent out of Sri Lanka as a criminal offence.

If a person in Sri Lanka remits funds abroad as an advance payment to import goods and subsequently fails to import the corresponding goods into the country within a reasonable period, this can be considered an unauthorised foreign exchange transfer abroad.

Under the provisions of the current Foreign Exchange Act, the only step that can be taken regarding such an unauthorised money transfer is the imposition of a financial penalty equal to the value of the relevant remittance by the Central Bank of Sri Lanka.

As this is not defined as a criminal offence, legal provisions for filing criminal lawsuits are also not included in the Act.

Through this amendment of the Act, establishing the relevant incidents as a criminal offence will enable investigative agencies and law enforcement agencies to take action more effectively under the legal framework.

Accordingly, cabinet approval has been granted for the proposal submitted by the President as the Minister of Finance, Planning and Economic Development to amend the Foreign Exchange Act, No. 12 of 2017.