US GOVERNMENT ASSISTANCE TO SRI LANKA?S DEVELOPMENT

UNCLAS COLOMBO 002139

SIPDIS

STATE FOR SA/INS MGOWER- PLEASE PASS TO TREASURY FOR OIA, OTA,
AND TFFC

E.O. 12958: N/A
TAGS: EFIN ECON KTFN KCRM SNAR PTER CE
SUBJECT: US GOVERNMENT ASSISTANCE TO SRI LANKA?S DEVELOPMENT
OF AN ANTI-MONEY LAUNDERING (AML) AND COMBATING TERRORIST
FINANCING (CFT)REGIME


1. United States Treasury?s Office of Technical Assistance
(OTA),Financial Enforcement team visited Colombo December 12-
16, 2005, to provide training to government officials on
establishment of an effective AML/CFT regime. The timing of
the visit was appropriate since the government of Sri Lanka
introduced in Parliament on 10 December new legislation on
Financial Transaction Reporting and Prevention of Money
Laundering. Sri Lanka passed a law on the Convention of the
Suppression of Terrorist Financing on 8 August 2005, however
procedures for implementing the CFT legislation are within the
pending legislation. Government officials expect that the new
legislation on Financial Transaction Reporting and Prevention
of Money Laundering will pass in the first quarter of 2006.


2. Meetings were held with the Central Bank, Ministry of
Justice, Ministry of Finance, the Attorney General?s Office,
private sector groups, and police regarding AML implementation
issues. All Sri Lankan groups welcomed continued US
government technical assistance in this area.


3. The team conducted a series of special seminars on topics
including a strategic planning session on implementation of
the AML/CFT regime; Suspicious Transaction Reporting; Know
Your Customer; and Financial Intelligence Units. Over 80
people from the government and private sector attended the
sessions.


4. The OTA team indicated future technical assistance
activities will include setting up a functional Financial
Intelligence Unit (FIU) and training FIU staff. Capacity
building assistance will be provided to existing Supervisory
Authorities and law enforcement officials from the
organization(s) given jurisdiction to investigate money
laundering and terrorist financing.


5. OTA Enforcement will place a resident financial
enforcement advisor in Sri Lanka by July 2006 after
appropriate clearances through the NSDD38 process.
Intermittent OTA advisors will continue to provide technical
assistance until placement of the resident.


6. Post will continue working directly with OTA and the
Government of Sri Lanka to provide further technical
assistance in this crucial area.

LUNSTEAD