The Cabinet has approved gazetting amendments to Sri Lanka’s Trust Ordinance No. 9 of 1917 and submitting them to Parliament, a step aimed at making the ownership of trusts traceable and at removing a long-standing gap in the country’s anti-money-laundering framework.
Cabinet Spokesman Dr. Nalinda Jayatissa announced the decision at Tuesday’s weekly post-Cabinet briefing, EconomyNext reported.
“The Attorney General has granted clearance for the Trust (Amendment) Draft Bill formulated by the Legal Draftsman,” said Jayatissa, who is also Minister of Health and Media. “Therefore, the Cabinet of Ministers approved the resolution furnished by the Minister of Justice and National Integration to publish the said draft bill in the government gazette notification and submit it to Parliament for its concurrence.”
Why a 1917 law is the problem
The Financial Action Task Force (FATF), the global anti-money-laundering watchdog, places heavy emphasis on the transparency of legal arrangements such as trusts. Trusts are treated internationally as vulnerable to abuse — they can be used to hide illicit gains, conceal ultimate beneficial ownership (UBO), and facilitate tax evasion or money laundering.
Sri Lanka has committed to the FATF to align its trust law with international standards so that competent authorities have timely access to accurate and up-to-date information on the creators, trustees and beneficiaries of trusts. The proposed changes include a statutory requirement to identify and register the ultimate beneficial owners, settlors, trustees and beneficiaries of express trusts.
The Ordinance being amended is more than a century old and predates any of that architecture.
The deadline behind the decision
The timing is not incidental. Sri Lanka is undergoing a periodic assessment by the Asia/Pacific Group on Money Laundering (APG). Passing that mutual evaluation is what keeps a country off the FATF “grey list” — a designation that damages international banking access, credit ratings and foreign trade. Closing statutory loopholes in laws as old as the 1917 Ordinance is a prerequisite.
Tuesday’s decision rests on observations from the Task Force on Prevention of Money Laundering and Financing of Terrorism, on a 2024 Cabinet approval to amend the Ordinance, and on amendments proposed by the Financial Intelligence Unit of the Central Bank.
The Bill is not yet law. It must be gazetted, presented to Parliament and passed before it takes effect. No date for presentation was announced.
A note on sourcing: this decision was announced at Tuesday evening’s briefing and no other verified Sri Lankan newsroom had filed its own report at the time of writing, although several carried other decisions from the same briefing.