The Prevention of Money Laundering (Amendment) Bill was presented to Parliament by the Leader of the House and Minister of Irrigation, Hon. Nimal Sripala de Silva, MP, on 8 September 2011. The second reading of the bill was debated and passed with amendments on 21 September 2011 and was certified by the Speaker. Commencing the Second
reading debate, the Minister of Education, Hon. Bandula Gunawardana, MP, stated that money laundering was legalizing black money, and under the directions of the President, a Finance Intelligence Unit was established in the Central Bank. These amendments would enable the law to take action against terrorist organizations that were collecting funds overseas. These measures would also secure the security of the nation, the national economy and the public. Dr Harsha de Silva, MP,
(UNP) said “a number of fraudulent activities have been reported with regard to the financial businesses in the recent past. It is no use passing these laws in Parliament, if they are not properly implemented by the government. We have experienced that several financial institutions have collapsed in the recent past. Therefore it is necessary to regulate these institutions by supervising them properly. There is no point in passing laws if they are not implemented. The government has to expose errant companies to the public. They
should be brought before the law”.
Hon. Dayasiri Jayasekera,
MP, (UNP) commented “I appreciate the government for moving timely and important legislation. I am sure that it would be applicable if measures could be taken against the persons involved in the Pramuka Bank racket. The victims of the Pramuka Bank racket and Golden Key racket have not so far been provided with any relief. The share market too has faced a crisis in recent past”.
“Money laundering operates
across the borders of sovereign countries. The task of combating it is extremely difficult and requires in-depth research, monitoring and investigation and exchange of financial intelligence information,” stated the Senior Minister for Human Resources DEW Gunasekara in his speech. He further stated that: “the prevention of money laundering brings in amendments to the Act of 2005. These amendments cover persons who commit money laundering while in Sri Lanka and recovery of corresponding value of the properties relating to money laundering and other unlawful activities relating to money laundering. I must recall here, with deep
respect to late Lakshman Kadiragamar the fact that the convention of the Suppression of Terrorist Financing Bill was introduced by him to this House on 7 July 2005. It became an Act, thereafter.
Strangely or ironically, it was the last piece of legislation moved by him. What is this money
laundering? It may be new to us but not so to the developed world. It does take place in our country as well, perhaps most of our people are not aware of it yet. It is a process that disguises illegal income and profits without compromising the criminals who benefit from the proceeds. This process has taken a critical and dangerous dimension under neo- liberalism. This represents the ‘Speculative Capital’ which President Fidel Castro has repeatedly warned of as a cause of global financial instability. The illegally earned funds
are moved away from their associations with the crime, i.e. the origin of the funds by channeling them into the financial system. Through the entry into the financial system, the process disguises the trail in order to foil tracing of the origin of the funds. At the final stage of this process, the illegal funds return to the criminals fully assimilated into the legal economy invested in real estates, luxury assets, or business ventures. In brief, this is how the black money or dirty money in the economy operates in an advanced way. It has its own methodology and technology. Who are these criminals engaged in money laundering? They are those who are engaged in illegal arm sales, smuggling, organized crimes, drug trafficking, prostitution
rings, embezzlement, insider trading, bribery, corruptions and fraud schemes etc. These monies can be transferred electronically very fast from country to country through legal structures in varying forms. The possible social and political costs of money laundering are serious and alarming. They will weaken the social fabric, ethical standards, and democratic institutions. It may be why terrorists cannot easily be brought into the democratic process.” Salient features of the amendments include:
• Applicability of the law has been expanded to cover any person who has committed a money laundering offence while in Sri Lanka;
• At present offences punishable exceeding seven years imprisonment under any other law has been considered as an offence for money laundering. The threshold of seven years has now been reduced to five years covering more offences punishable under money laundering offence; and
• Foreign predicate offences are also included as unlawful activities.
The Bill was passed subject to few Committee stage amendments, on 21 September 2011, unanimously since there was an agreement in both the Government and the Opposition with the regard to the amendments therein.