Three AML, counter-terror financing laws enacted

Speaker Dr. Jagath Wickramaratne on Tuesday (4) certified three major financial reform Bills passed by Parliament, bringing into force amendments aimed at strengthening Sri Lanka’s legal framework against money laundering, terrorist financing and other illicit financial activities.

The newly enacted laws are the Prevention of Money Laundering (Amendment) Act, No. 16 of 2026, the Financial Transactions Reporting (Amendment) Act, No. 17 of 2026, and the Convention on the Suppression of Terrorist Financing (Amendment) Act, No. 18 of 2026.

The Prevention of Money Laundering (Amendment) Bill, which was passed on July 9 with a special majority following a Supreme Court determination on Clause 14, introduces a series of changes to enhance the effectiveness of Sri Lanka’s anti-money laundering framework.

The amendments expand the scope of money laundering offences, enable legal proceedings to be initiated without a prior conviction for a predicate offence, and strengthen powers relating to the freezing and confiscation of assets. The Act also introduces new mechanisms for the management and disposal of confiscated assets, increases penalties, and expands investigative powers and avenues for international cooperation.

The Financial Transactions Reporting (Amendment) Act, passed with amendments, brings Sri Lanka’s financial reporting regime further in line with international standards on combating money laundering, terrorist financing and proliferation financing.

The amended law introduces risk-based and customer due diligence requirements, expands obligations imposed on reporting institutions, and brings Virtual Asset Service Providers (VASPs) within the definition of financial businesses subject to regulatory oversight.

It also strengthens the powers and functions of the Financial Intelligence Unit (FIU), extends the period for transaction suspension orders from seven to fourteen working days, and establishes a National Committee on Anti-Money Laundering and Counter-Terrorism Financing.

The amendments further improve the implementation of targeted financial sanctions imposed under United Nations Security Council resolutions while clarifying legal definitions and rectifying inconsistencies between Sinhala and English versions of the legislation.

Meanwhile, the Convention on the Suppression of Terrorist Financing (Amendment) Act, passed without amendments, further aligns Sri Lanka’s legal measures against terrorist financing with international conventions and standards.

According to a statement issued by Parliament, the reforms will help safeguard the integrity of Sri Lanka’s financial system, strengthen national security and demonstrate the country’s commitment to fulfilling international obligations, particularly ahead of its forthcoming Mutual Evaluation under the Financial Action Task Force (FATF) framework.

The legislative changes are also expected to support Sri Lanka’s efforts to maintain compliance with global standards on anti-money laundering and countering the financing of terrorism.