Sri Lanka AML & Sanctions Compliance
Navigate the complex AML and sanctions compliance landscape in Sri Lanka with Anqa's comprehensive knowledge and solutions tailored for the Sri Lankan regulatory environment.
Regulatory Framework
Sri Lanka's AML/CFT framework consists of:
- Financial Transactions Reporting Act No. 6 of 2006
- Prevention of Money Laundering Act No. 5 of 2006
- Convention on the Suppression of Terrorist Financing Act No. 25 of 2005
Key regulatory authorities include:
- Financial Intelligence Unit (FIU) of Central Bank of Sri Lanka - Financial intelligence unit
- Central Bank of Sri Lanka (CBSL) - Central bank
- Securities and Exchange Commission (SEC) - Securities regulator
FATF Status
Sri Lanka was on the FATF grey list from 2017 to 2019 but was removed after making significant improvements. The country is now compliant or largely compliant with 29 of 40 FATF Recommendations, partially compliant with 10 Recommendations, and non-compliant with 1 Recommendation. Legal framework and financial sector supervision are areas of strength, while risk-based supervision and beneficial ownership remain areas for improvement.
Compliance Requirements
Core Obligations
- CDD/KYC: Implement standard and enhanced customer due diligence measures based on risk assessment.
- Transaction Monitoring: Conduct risk-based ongoing monitoring with focus on unusual patterns.
- Reporting: Submit STRs to FIU within 2 days of forming suspicion. Report cash transactions over LKR 1 million.
- Record Keeping: Maintain comprehensive records for at least 6 years.
- Sanctions Implementation: Screen against UN and local sanctions lists.
Key Challenges
- Economic Crisis: Recent economic challenges affecting compliance resources and priorities.
- Currency Controls: Foreign exchange restrictions creating complex monitoring requirements.
- Tourism Sector: Tourism industry presenting specific money laundering risks.
- Property Market: Real estate sector requiring enhanced due diligence.
- Post-Conflict Issues: Recovery from past internal conflicts affecting risk assessments.
Sanctions Considerations
Sri Lanka is navigating complex international relationships that impact sanctions compliance. Infrastructure and port development projects, particularly those involving foreign investment, require specialized due diligence.
The tourism sector presents unique challenges for effective screening, particularly given the country's efforts to rebuild this industry following recent challenges.
Key Compliance Challenges
Understanding the unique obstacles facing financial institutions in Sri Lanka
Economic Crisis Impact
Recent economic challenges have affected compliance resources and priorities, requiring adaptive approaches to maintain effective AML/CFT programs.
Currency Controls
Foreign exchange restrictions create complex monitoring requirements and necessitate enhanced due diligence for cross-border transactions.
Tourism Sector Risks
The tourism industry presents specific money laundering risks that require specialized monitoring and reporting mechanisms.
Property Market Complexity
The real estate sector requires enhanced due diligence and specialized monitoring for high-value transactions and foreign investments.
Post-Conflict Considerations
Recovery from past internal conflicts affects risk assessments and requires specialized approaches to customer due diligence.
Regulatory Evolution
Ongoing regulatory changes and improvements following FATF grey list removal require continuous adaptation of compliance programs.
Anqa's Approach for Sri Lanka
Our comprehensive AML solution tailored for Sri Lanka's unique regulatory landscape and market requirements.
Digital KYC & Onboarding Platform
Electronic KYC integration with Sri Lanka's identity verification systems, centralized repository, and assisted onboarding tools for agents and field staff.
Customer Risk Assessment Engine
Five-dimensional risk classification with Sri Lanka-specific parameters and behavior-driven risk adjustments aligned with local regulatory requirements.
Sanctions & Watchlist Screening
Comprehensive screening with Levenshtein and phonetic matching algorithms optimized for Sri Lanka's naming conventions and local watchlists.
Loan Application & Approval
Automated loan origination with offline support for rural areas and integration with KYC modules designed for Sri Lanka's financial ecosystem.
Compliance Workflow Platform
Centralized case management with customizable workflows aligned with Sri Lanka's regulations and reporting requirements.
Deployment & Pricing
No setup fees, modular pricing, cloud-based with scalable licensing (user or transaction-based).
Sri Lanka — AML & Compliance FAQs
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Sri Lanka’s Financial Intelligence Unit (FIU Sri Lanka) under the Central Bank of Sri Lanka (CBSL) oversees AML compliance under the Financial Transactions Reporting Act, 2006.
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Businesses must conduct KYC checks, maintain transaction records, file Suspicious Transactions Reports (STRs) with FIU Sri Lanka, and monitor high-risk transactions.
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An STR must be filed with FIU Sri Lanka whenever a transaction appears suspicious, lacks a legitimate purpose, or may involve criminal proceeds.
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Yes. Fintech platforms and payment service providers must comply with Sri Lanka’s AML/CFT framework, conducting customer due diligence and ongoing transaction surveillance.
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Anqa Compliance empowers Sri Lankan businesses with easy-to-use compliance tools for customer onboarding, monitoring suspicious activities, and filing regulatory reports.
Dig Deeper – Country Compliance in Focus
Gain country-specific expertise with Anqa’s tailored AML and sanctions intelligence. Leverage our technology, risk-based strategies, and deep regional knowledge to stay ahead of regulatory expectations.
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