CB Governor on need to curb money laundering, terrorist financing

Central Bank Governor Ajith Nivard Cabraal stressed the need to curb money laundering and terrorist financing and the need to widen the scope of jurisdiction against such crime to include dubious charities and NGOs.

Addressing an international conference on Financial Investigation in Colombo recently he outlined how the issue affected the Sri Lankan economy, how terrorist financing strengthens the LTTE and resultant issues the country has faced.

Following are excerpts of his speech:

Sri Lanka has been crying foul for many years about fund-raising for terrorism, taking place in many countries, where the funds were used to procure and supply weapons to wage terrorist activity in our country. Sadly our pleas were not taken seriously. But the world took greater note of this scourge after 9/11/2001, said Cabraal.

Fortunately for us, the post 9/11 anti-money laundering and terrorism financing measures were pursued with vigour at an international level and these processes have been evolving rapidly in recent years.

The international community has witnessed the use of increasingly sophisticated methods to curtail the movement of illicit funds through the financial system across the globe.

Sri Lanka, naturally, was keen to support this global effort and soon established a comprehensive legal and institutional framework for anti-money laundering and combatting the financing of terrorism, Cabraal said. Cabraal explained the steps that Sri Lanka has taken to combat money laundering and terrorist financing.

The initial phase of establishing a comprehensive framework for anti-money laundering and financing terrorism was focused on drafting legislation. With the passage of legislation we set up the infrastructure for the Financial Intelligence Unit (FIU).

At present Sri Lanka has a fully operational FIU established in the CB, to meet its local and international obligations.

Sri Lanka has made a valiant effort to control terrorist activities waged by the LTTE, a group acknowledged worldwide as a terrorist movement.

USA, Canada, the EU and many other countries have banned the LTTE due to its flagrant human right violations and inhuman acts of terror. It has been designated as a terrorist group by most countries in the western hemisphere.

As recognised worldwide, the most effective manner to undermine and overcome terrorist activities is to stop or curb its funding sources. Not withstanding the ban, the LTTE has extended its tentacles in North America, the EU and Australia.