Financial Intelligence Unit under spotlight

Central Bank Governor Prof. W.D. Lakshman

• Good governance activist Chandra Jayaratne writes to Central Bank on FIU’s accountability for priority strategic actions and reform initiative

Good governance activist Chandra Jayaratne in a letter to Central Bank Governor Prof. W.D. Lakshman has highlighted the Financial Intelligence Unit’s accountability for priority strategic actions and reform initiatives. The letter has been copied to Secretary, Ministry of Finance, Secretary, Ministry of Justice, Attorney General, Inspector General of Police, Director, Financial Intelligence Unit, President, Bar Association of Sri Lanka, President, Organisation of Professional Associations, President, Institute of Chartered Accountants of Sri Lanka, and CEOs of Chambers of Commerce and Institute of Directors. Following are excerpts:

It is evident from a significant number of case studies and reported media reports that a serious vacuum exists amongst the executive, legislators, judiciary, prosecutors, investigators, state officials, professionals, media personnel and civil society at large, of the scope, application and statutory commitments arising from the acts and regulations and enforcements falling within the purview of the Financial Intelligence Unit of Sri Lanka (FIU). Regrettably, the persons referred to earlier have further failed in recognising the associated risks and the potentially serious negative economic consequences that will negate the objectives of the national policy framework of Vistas of Prosperity and Splendour.

The FIU-Sri Lanka was established in March 2006 in terms of the provisions of the Financial Transactions Reporting Act No. 06 of 2006 (FTRA) under the Ministry of Finance and Planning. It functions as an independent institution within the administrative structure of the Central Bank of Sri Lanka since February 2007. In terms of an order made by the President under the aforesaid Act, the institution designated to operate the FIU, in order to enhance its operations and to act efficiently in the discharge its statutory functions should leverage the policy-making and regulatory capabilities of the Central Bank. It is in that context that this submission is made to you.

These submissions seek the leadership action by you, the Monetary Board and the leadership teams of the Central Bank and Financial Intelligence Unit, to evaluate and take steps to implement the undernoted strategic actions and reform initiatives, in association and with the facilitation support of the persons/institutions copied in this letter:

Arrange a series of professional presentations, panel discussions and webinars targeting the categories of persons, institutions and enterprises identified as key to effective implementation and enforcement of the provisions of the aforementioned Act, Regulations and International Best Practice Guidelines, supported by handouts, case studies, commonly asked questions and answers along with presentation material for post event reference, embedding therein the expected follow up action steps and check lists for compliance assurance;

Arrange a series of simplified presentations and media communications targeting the wider civil society, with specific targeting of grassroots level leaders, activists and role models of society, supported by simple langue developed handouts, case studies, commonly asked questions and answers and presentation material for post event reference, embedding therein the expected follow up action steps and check lists for compliance assurance;

Arrange for the FIU and the Attorney General’s Office to operate help desks for confidential advice, guidance and mentoring, along with options for confidential mentoring facility in select situations for any persons with conflicts of interests, doubts on how to act in certain official situations or unsure of the appropriate best international practices to follow in specific case situations;

Arrange with the Chambers of Commerce, Organisation of Professional Associations, Bar Association, Institute of Directors and the Institute of Chartered Accountants to issue Practice Briefs and offer specially designed Training Modules to their members in order to develop greater awareness of the scope, application and statutory commitments arising from the Acts and Regulations and enforcements falling within the scope purview of FTRA and the FIU, as well as on the best practices in acting at all times as “Fit and Proper Persons” in the practice of their professions or employment;

Arrange for the General Treasury to specifically incorporate within in its Corporate Governance Codes and Compliance based Financial and Administrative Regulations, the FTRA and FIU associated regulations and best practice guidelines as well as enforcing a compulsory mechanism based requirement in any dealing with situations where “Non Compliance with Acts and Regulations” (NOCLAR) comes up within the knowledge and belief of officers concerned; and further setting out alongside a specific Compliance Certification methodology binding all higher grade officers and executives of the State being required to make an annual declaration of being “Fit and Proper Persons” and having duly complied with all applicable acts and regulations to the best of their knowledge and belief;

Arrange with the Chambers of Commerce, Organisation of Professional Associations, Bar Association, Institute of Directors and the Institute of Chartered Accountants to bind their Memberships by specifically incorporating within in their respective Corporate Governance Codes, Business Standards and Ethical Conduct Codes, the due compliance with the FTRA and FIU associated regulations and best practice guidelines; as well as enforcing a compulsory mechanisms based requirement in dealing with situations where “Non Compliance with Acts and Regulations” (NOCLAR) comes up within the knowledge and belief of the members and their employees concerned; and further setting out alongside a specific Compliance Certification methodology to be followed by all higher grade management and executives of the members, who are in addition are to be required to make an annual declaration of being “Fit and Proper Persons” and having duly complied with all applicable acts and regulations to the best of their knowledge and belief;

Arrange with the Chambers of Commerce, Organisation of Professional Associations, Bar Association, Directors Institute and the Institute of Chartered Accountants in addition operate help desks for confidential advise, guidance and mentoring along with options for confidential guidance facility in select situations for any persons with conflicts of interests, doubts on how to act in certain official situations, conflicts with Standards of Conduct and Ethics or unsure of best international practices and also where needing guidance and mentoring in specific case situations; 

Collectively review the current lacunae in the “Assistance to and Protection of Victims of Crime and Witnesses Act No; 4 of 2015” and enhance the protection offered to Victims, Witnesses and especially Whistle Blowers.

It is verily believed that you, the Monetary Board and the leadership teams of the Central Bank and Financial Intelligence Unit, along with those copied in this letter, will endorse and actively lead the essential strategic action and reform initiatives set out herein before as a measure of priority.