FIU in Sri Lanka Penalises Financial Firms over AML/CFT Non-Compliance
Sri Lanka’s Financial Intelligence Unit (FIU) has recently penalised two financial institutions in the private sector with a total sum of 4 million (Sri Lankan Rupees) for non-compliance with the regulatory measures in the first quarter of the year.
Financial Intelligence Unit is the regulatory authority in the country for Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT). The FIU says that it has fined the firms Rs. 4 million to set the precedent for the financial institutions to strictly comply with the regulatory measures.
These fines were imposed mainly due to the violation of Rule No. 1 for financial institutions. The rule consists of customer due diligence regulations in relation to the sanctions placed by the United Nations on the identification, screening, and verification of the customer, suspicious transaction reporting and applying proper monitoring and risk control measures.
FIU says that Kanrich Finance was penalised with Rs. 1 million and Commercial Bank was fined 3 million rupees. After an extensive review from January to December last year, the regulatory authority also penalised Richard Pieris Finance Ltd. with Rs. 300,000, and Softlogic Finance Plc and Siyapatha Finance Plc with 1 million rupees each.
These measures were taken with the approval of the Financial Transactions Reporting under Section 19 (1) along with Section 19 (2) Act, No. 06 of 2006. Under these laws, FTRA allows the Financial Intelligence Unit to impose penalties on the non-compliant institutes.
Penalties imposed by FIU on financial institutions and designated non-finance businesses must be dependent on the nature of the non-compliance, and the gravity and the relevance of the situation.
Many countries are taking strict measures to combat the growing crime of money laundering and terrorism financing through heavy fines, strict risk control and KYC/AML measures.