Sri Lanka is under evaluation by the Financial Action Task Force over gaps in its legal framework on terrorist financing, and the assessment team has been asking non-governmental organisations what they think of the law the government is writing to regulate them.
The FATF — the global intergovernmental watchdog on money laundering and terrorist financing — has dispatched a team to the country, the Daily Mirror reported at 11.19 a.m. Its representatives sought the views of Sri Lankan civil society representatives, particularly on the proposed legislation to monitor and regulate NGO activities.
The Asia/Pacific Group on Money Laundering (APG), the FATF’s regional body, is conducting the visit. The government’s participation is led by the Financial Intelligence Unit of the Central Bank. Representatives of civil society organisations running NGOs presented their views on the proposed bill.
The visit comes as the government implements initiatives including legislative reform that it believes are required to achieve a ‘compliant’ rating under FATF standards.
Why the NGO bill is the pressure point
The FATF recognises non-profit organisations for what it calls their vital role in national economies and social systems. In the two decades since the abuse of NPOs by terrorist organisations was formally recognised as a risk, the sector has adopted governance, transparency and accountability measures to mitigate it.
In rare cases, the FATF says, NPOs continue to be misused — to raise and move funds, provide logistical support, encourage recruitment, or lend a veil of legitimacy to terrorist organisations. NPOs are expected to take mitigating measures supported by appropriate government oversight, and governments are required to ensure NPOs are not abused for terrorist financing.
That requirement is what a government can point to when legislating on NGOs. It also means an assessment team’s finding on how Sri Lanka regulates the sector carries weight on both sides of a domestic political argument — which is why the team asking NGOs directly, rather than only the agencies being assessed, matters.
New guidance for NGOs, already issued
Separately, the National Secretariat for Non-Governmental Organizations has issued an amendment to its Anti-Money Laundering and Countering the Financing of Terrorism guidelines for NGOs in Sri Lanka.
The new annex is intended to help NGOs identify circumstances warranting closer examination for money laundering or terrorist financing risk, and to strengthen internal risk management and reporting. According to an article on the Secretariat’s website, the indicators cover:
- Donations and donor conditions — unusual or substantial donations from unverifiable sources, unexplained repayment arrangements, suspicious donor conditions
- Movement of funds — unusual refunds, unexplained use of multiple foreign accounts, substantial cash transactions without credible operational explanation
- Identity and financial records — false or unverifiable identification, concealed control of partner organisations, suspicious invoices, unexplained cash withdrawals, discrepancies in records
- Partners and delivery — obstruction of reasonable monitoring, unverified project activities, unexplained intermediaries, credible complaints that assistance is not reaching beneficiaries
- Terrorist abuse — credible information of diversion of charitable resources, misuse of facilities or programmes, fundraising for terrorist purposes
- Sanctions and digital payments — potential sanctions matches, attempts to circumvent restrictions, digital-asset transactions obscuring source or destination, purchases inconsistent with stated objectives
Not reported
The filing does not say when the team arrived or how long it will stay, how many civil society representatives were consulted, or which organisations took part. It does not report what views the NGOs put, and one sentence attributing an account to a participant is left incomplete in the published text.
It does not name the proposed NGO bill, say what stage it has reached, or describe what powers it would create. It does not state Sri Lanka’s current FATF rating or what a ‘compliant’ rating would change, give the evaluation’s reporting date, or say what follows if gaps are found. No government or Central Bank official is quoted, and the National Secretariat guidance is not dated.
Single source. This desk checked the Hiru News homepage rail, the NewsFirst homepage listing and the EconomyNext homepage; no other verified newsroom had filed on the consultation at the time of writing. Ada Derana has returned an HTTP 403 to this desk for some 48 consecutive days and could not be consulted.