Whistle-blowing to prevent financial 'crime'

Employees of financial institutions and banks are bound to inform the authorities about suspicious transactions taking place and it is a duty of whistle-blowing and it is legally binding, said Deputy Solicitor General Sarath Jayamanne.

He was addressing a seminar on "whistle-blowing who, when, why and how" organised by the Institute of Chartred Corporate Secretaries of Sri Lanka.

Traditional criminals keep the looted money with them. However, the white collar criminals do not keep the looted money in their possession but place them somewhere in a bank or other financial institution. By this way they clean the money, break them into portions and send them to various destinations or buy properties.

This process is called money laundering and the amount of money looted by white collar criminals is huge and it does serious damage to the economy.

Money laundering is defined as the process whereby `dirty money' produced through criminal activity, is transformed into `clean money', whose criminal origin is difficult to trace.

Jayamanne said that a person who fails to report a financial transaction prescribed in the prevention of money laundering Act is guilty of an offence.

Money laundering is often committed through the abuse of the banking system of a country. Therefore a proper regulatory framework is necessary to minimise abuse. Bank employees should know about their customers and should inquire from them how they got the money if a customer deposits a suspicious amount of money.All suspicious transactions should be reported to the Financial Intelligence Unit (FIU) of the Central Bank. According to the Act, suspicious or not, all the transactions worth over Rs. one million should be reported to the FIU,Jayamanne explained whistle-blowing under the provisions of the Prevention of Money Laundering Act No.5 of 2006 and Financial Reporting Act No.6 of 2006. A whistle-blower is a person who alleges misconduct and the term derives from the practice of English bobbies who would blow their whistles when they noticed the commission of a crime. The whistle would alert both law enforcement officers and the public of danger.Any person who knows or has reason to believe about unlawful transaction, described under the law shall disclose his knowledge or belief as soon as possible to the FIU.The whistle-blowers are legally protected by the Act and no civil, criminal or disciplinary proceedings shall lie against persons reporting suspicious transactions, he said. (GW)