Sri Lanka CSO FATF Network

Civil Society for Financial Integrity and Democratic Governance - Sri Lanka

[Sri Lanka CSO FATF Network @sl_cso_fatf]

⭕️The proposed amendment to the Convention on the Suppression of Terrorist Financing Act (#CSTFA) is one example of how is FATF being misused in Sri Lanka.

The proposed amendments would allow freezing orders issued by police to remain in force for 7 days to 14 working days before judicial review.

@ambikasat

#srilankacivilsociety #CivicSpace #accountability #FATF #srilanka

[Sri Lanka CSO FATF Network @sl_cso_fatf]

3/3 Teachers’ salaries cannot be paid. Vulnerable children are not able to enjoy stable education and facilities. The people affected are not money launderers — they are students, teachers, and low-income communities.

❌But they pay the price for blanket reporting requirements that are not risk-based.

[Sri Lanka CSO FATF Network @sl_cso_fatf]

🧵1/3 What happens if the proposed FTRA amendment bill is passed?

✴️Imagine a NGO is rebuilding a school in an underserved area.

An international donor agrees to fund the project.

@ambikasat

[Sri Lanka CSO FATF Network @sl_cso_fatf]

2/3 The funds are ready to be sent.

BUT THE TRANSFER IS STUCK❗

Under the proposed FTRA Bill, the donation may trigger mandatory reporting requirements by the banks to the FIU.

[Sri Lanka CSO FATF Network @sl_cso_fatf]

3/3 🚨Legal uncertainty is dangerous!

The Bill creates a legal obligation without clearly stating when it applies. If a business gets it wrong, it could face significant penalties.

Until the threshold is formally prescribed, businesses are left to guess legal obligations.

[Sri Lanka CSO FATF Network @sl_cso_fatf]

🧵1/3 What can happen if the Financial Transactions Reporting Act amendment is passed?

Imagine you run a money exchange counter in Colombo.

A customer walks in to exchange money.

@ambikasat

[Sri Lanka CSO FATF Network @sl_cso_fatf]

2/3 Under the proposed FTRA Bill, you may be required to carry out customer due diligence (CDD) before processing the transaction.

But there's one problem…

The Bill says CDD is required when a transaction exceeds a certain threshold.

But the threshold is NOT mentioned in the law. It will be decided later by rules issued by the Financial Intelligence Unit (FIU).

[Sri Lanka CSO FATF Network @sl_cso_fatf]

3/3 But unclear rules on simplified customer checks create uncertainty.

#FATF #SriLanka #FinancialInclusion

[Sri Lanka CSO FATF Network @sl_cso_fatf]

🧵1/3 What can happen if the Financial Transactions Reporting Act is passed?

A farmer loses his documents in a flood. He needs a small loan to buy seeds for the next planting season. A microfinance company wants to help.

@ambikasat

[Sri Lanka CSO FATF Network @sl_cso_fatf]

2/3 The company must choose:

❌ Refuse the loan
OR
❌ Risk penalties by approving it

[Sri Lanka CSO FATF Network @sl_cso_fatf]

How is FATF being misused in Sri Lanka?

The proposed amendment to the Financial Transactions Reporting Act (FTRA) is one example.
Read how below👇

@ambikasat @fatfplatform

[Sri Lanka CSO FATF Network @sl_cso_fatf]

@ambikasat @fatfplatform

[Sri Lanka CSO FATF Network @sl_cso_fatf]

Over 100 NGOs responded to our questionnaire on NGO access to banking services.

The results are staggering.

Govts AML/CFT policy is hurting #civilsociety orgs in #SriLanka and the communities they serve, in contravention of #FATF Rec 8!

DM to receive our note on this issue!

[Sri Lanka CSO FATF Network @sl_cso_fatf]

How is #FATF being misapplied in #SriLanka?

Ahead of the upcoming Mutual Evaluation Review, we are raising awareness on how FATF standards are being weaponised to impose overbroad compliance demands on #CivilSociety.

Read our Explainer to learn more!
https://t.co/nbooAAohlY

[Sri Lanka CSO FATF Network @sl_cso_fatf]

5/5 CSOs across Sri Lanka also face challenges opening bank accounts and receiving foreign funds. These challenges differ from bank to bank and even between branches of the same bank.

#FATF #SriLanka #CivilSociety #CivicSpace #Accountability

[Sri Lanka CSO FATF Network @sl_cso_fatf]

4/5 CSOs and networks, including families of the disappeared, report receiving phone calls from security agencies requesting information about events and planned protests.

[Sri Lanka CSO FATF Network @sl_cso_fatf]

3/5 Civil society organisations (CSOs), particularly in the North and East, face heightened scrutiny, surveillance, harassment and state action that undermine their activities and prevent access to financial services.

[Sri Lanka CSO FATF Network @sl_cso_fatf]

🧵1/5 What is the state of civic space in Sri Lanka?

SL’s anti-money laundering and counter-terrorism financing (AML/CFT) framework is being used to restrict civic space, undermine freedom of association and subject civil society organisations (CSOs) to surveillance, intimidation and harassment.

@ambikasat @fatfplatform @profbensaul @Ginitastar

[Sri Lanka CSO FATF Network @sl_cso_fatf]

2/5 While  Govt of SL asserts measures are needed  to comply with standards of  Financial Action Task Force (FATF), evidence demonstrates that many practices are inconsistent with FATF’s fundamental requirement that measures must be:
“Targeted, proportionate and risk-based.”