Urgently required additional law reforms: Letter to Justice Minister

• Following is a letter to Justice Minister Wijeyadasa Rajapakshe

Dear Mr. Minister,

Urgently required additional law reforms:

Consider enacting an ‘Economic Crime and Corporate Transparency Act’ along with proposed ‘Proceeds of Crime Act’

You are urged to kindly consider enacting an ‘Economic Crime and Corporate Transparency Act’, along with the enactment of the ‘Proposed Proceeds of Crime Act’, in line with the firm commitments expressed by the Government in response to the expectations of the International Monetary Fund (IMF); and specifically, as targeted by the (IMF) in the Governance Diagnostics Assessment which was duly adopted by the Government.

The proposed Sri Lankan Act can benchmark some of the key features and specific statutory provisions in the recently enacted ‘Economic Crime and Corporate Transparency Act’ of the United Kingdom. Such legal reforms must be enacted within the context of the legal framework outlined in the preceding UK laws governing Corporate Criminal Liability for Serious Economic Crimes; and should be supported by the setting up of a Serious Frauds Office in Sri Lanka. It is essential that Sri Lanka too has an Act which strengthens the powers of law enforcement agencies engaged in investigating Serious Economic Crimes and thus develops the capacity and capability to prosecute Serious Economic Crimes, whilst compelling the corporate sector to improve its transparency and adherence to best practices of corporate governance, with stricter compliance to established accounting and auditing standards.

The key features and provisions of the abovementioned Act, worthy of due attention and appropriate adoption in Sri Lanka include:

1.The expansion of the identification principle in respect of selective offenses to be covered targeting Serious Economic Crimes (e.g. Bribery, Corruption, Fraud, Tax Fraud, Cheating State Revenue, Appropriation of State Assets, Money Laundering, Terrorism Financing, Engaging in Illegal Businesses, Securities Trading Offenses, Oppression/Mismanagement and False Accounting/Failure to Disclose and Gross Misrepresentation by Directors); 

a. Strict Liability Laws to be the basis of identification and prosecution of offenses selectively covered by the Act – i.e. when a defendant is liable for committing an action, regardless of what his/her intent or mental state was when committing the action.

b. Corporate Liability – an organisation will be guilty of a “relevant offence” if that offence is committed by a “Senior Manager” of the organisation acting within the actual or apparent scope of authority

2. Failure to prevent fraud

a. Provide that “Specified Business Enterprises” as defined by the Sri Lanka Accounting and Auditing Standards Monitoring Board, commits the failure to prevent fraud, if it fails to prevent an associated person (defined as an employee, agent, or subsidiary as well as any others who perform services on their behalf), from committing a fraud, where associated person intends to benefit directly or indirectly either the organisation or the person to whom the associated person provide services 

3. Extension of the Geographic Scope related jurisdictional expansion; thus, bringing within the liability arena relevant offenses committed by persons and business entities in other countries where such actions are relevant offenses

The given web links will provide useful information for review, evaluation, and justification of the aforesaid submissions.

I stand ready to support your initiatives towards democratic good governance, assurance of equity, equality and effective rule of law in the delivery of justice, sans laws delays.

Yours Sincerely, 

Chandra Jayaratne

Fact Sheet – Economic Crime and Corporate Transparency Act 2023 Overarching 

https://assets.publishing. service.gov.uk/media/ 65df57cfcf7eb1e5f4f57fdf/01.+ ECCT+Bill+Overarching+Fact+ Sheet.pdf

Economic Crime and Corporate Transparency Act 2023

https://www.legislation.gov. uk/ukpga/2023/56/enacted

Economic Crime and Corporate Transparency Act 2023

These documents relate to the bill stage of the Economic Crime and Corporate Transparency Act 2023.

https://www.gov.uk/government/ collections/economic-crime- and-corporate-transparency- bill-2022