Sri Lanka which is undergoing an acute financial crisis with debt default may face further challenges in case it is grey listed by the Financial Action Task Force. Asia Pacific Group (APG) on Money Laundering (APG) Recommmendations to Sri Lanka to Escape the Grey List are as follows:-
1. Focus on Effectiveness: Emphasize the ability of the AML/CFT system to produce operational results that address Sri Lanka’s specific risks effectively.
2. Enhanced Monitoring: Stakeholders should intensify monitoring of progress and operational outcomes to support the advancement of priority implementation plans and surmount any obstacles to effectiveness.
3. Timely Legislation: Expedite the passage of critical AML/CFT-related legislation to ensure the availability of the necessary tools for achieving operational outputs.
4. Resource Allocation: Allocate adequate resources on a priority basis to agencies responsible for implementing the AML/CFT framework to facilitate the achievement of operational outcomes timely.
5. Inter-Agency Coordination: Sustain inter-agency coordination through effective leadership and well-supported mechanisms for targeted planning and progress monitoring in line with implementation plans.
6. Prosecution: Enhancing the capacity and active involvement of prosecutors in money laundering and terrorism financing cases.
7. Law Enforcement: Bolster implementation by law enforcement agencies, particularly through the clearance of backlogs in money laundering cases and increase in the scope of asset recovery and money laundering-related activities.
8. Judiciary: Improve the capacity of the Judiciary for timely and effective adjudication of money laundering cases and terrorism financing cases
9. Private Sector Engagement: Encourage active involvement of the private sector, fostering shared goals with the government for priority implementation of AML/CFT systems.
10. International Cooperation: Strengthen and focus on international cooperation, recognizing its pivotal role in demonstrating effectiveness. Foster deeper collaboration with countries that share key money laundering and terrorist financing risks.
By diligently adhering to these prioritized actions, Sri Lanka can secure a favorable outcome in its Mutual Evaluation and avoid the adverse economic and financial consequences associated with FATF Grey-Listing. Therefore, each of the 24 stakeholders are expected to ensure they have made every possible effort within their capacity to address the gaps in the AML/CFT Framework in a timely manner to face the country’s 3rd Mutual Evaluation.