Sri Lanka advances in third AML/CFT Mutual Evaluation; on-site review set for October

• Final Mutual Evaluation report expected to be adopted at APG Annual Meeting in July 2027
• CBSL Governor Dr. Nandala Weerasinghe notes amendments to three key laws now gazetted, awaiting Parliamentary approval

Dr. Subhani Keerthiratne

By Charumini de Silva

Financial Intelligence Unit (FIU) Director Dr. Subhani Keerthiratne yesterday said Sri Lanka has crossed three key milestones in its third Mutual Evaluation process on anti-money laundering and countering the financing of terrorism (AML/CFT), outlining a tight reform and assessment timeline that will run through mid-2027.

Sri Lanka is being evaluated under the framework of the Asia/Pacific Group on Money Laundering (APG), the regional body affiliated with the Financial Action Task Force (FATF), which assesses countries’ compliance with global AML/CFT standards.

Dr. Keerthiratne said the first deadline, submission of Sri Lanka’s technical and contextual information to the APG Secretariat, was met on 20 February. This was followed by a virtual meeting with the APG Secretariat and assessors on 12 March, chaired by Central Bank of Sri Lanka (CBSL) Governor Dr. Nandalal Weerasinghe, with participation from all relevant public sector stakeholders.

She described the meeting as successful, noting that it allowed Sri Lanka to clarify its legal, regulatory, and institutional framework ahead of the next stages of the evaluation.

“The country also met its 20 March deadline to submit its Technical Compliance Report, detailing how Sri Lanka complies with the 40 recommendations of the FATF,” Dr. Keerthiratne said, adding these recommendations form the backbone of the global AML/CFT regime and assess whether countries have enacted the necessary laws and regulatory structures.

“The next major milestone is 19 June, when Sri Lanka must submit its report on effectiveness, demonstrating how well its AML/CFT framework works in practice. This component measures performance across 11 immediate outcomes,” she added.

The FIU Director also said that an on-site visit by APG assessors is scheduled from 26 October to 6 November, during which both public sector institutions and private sector reporting entities, including banks and other financial institutions, will undergo interviews and scrutiny.

“The final Mutual Evaluation Report is expected to be adopted at the APG Annual Meeting in July 2027,” she said.

Responding to questions on pending legal reforms, Dr. Weerasinghe confirmed that amendments to three key laws have now been gazetted and are awaiting Parliamentary approval. These include amendments to the Financial Transactions Reporting Act, the Prevention of Money Laundering Act, and the Convention on the Suppression of Terrorist Financing Act.

He expressed hope that the Parliament will enact these amendments soon, strengthening Sri Lanka’s compliance with international standards ahead of the on-site assessment.

The Governor added that engagement with both public and private sector stakeholders is ongoing as part of the broader reform agenda, emphasising that the effectiveness component of the evaluation will require demonstrating not only legislative adequacy, but also measurable enforcement outcomes.

Sri Lanka’s performance in the third Mutual Evaluation is seen as critical to maintaining correspondent banking relationships, safeguarding investor confidence, and avoiding potential grey-listing risks, as the country continues its broader economic stabilisation and reform program.