In exercise of the powers conferred under Section 19 (1) read with Section 19 (2) of the Financial Transactions Reporting Act, No. 6 of 2006 (FTRA), financial penalties are imposed on entities for non-compliance with the provisions of the FTRA. The penalty may be imposed taking into account the nature and seriousness of the relevant non-compliance of the entities.
Accordingly, the Financial Intelligence Unit, as the regulator for the Prevention of Money Laundering and Combating the Financing of Terrorism (AML/CFT) in Sri Lanka, collected penalties as set out below, which amounted to Rs. 3 million for enforcing compliance on entities during the period from November to December 2024. The amount collected as penalties was credited to the Consolidated Fund.
- Indian Bank
Date of imposition: 18th December 2024
Amount: Rs. 2,000,000.00 (Two Million Rupees)
Date of payment: 31st December 2024
Reasons for imposition of penalty: The bank was imposed the administrative penalty for failure to comply with the FTRA and the rules, regulations and orders issued thereunder;
i. The bank had failed to report to the FIU the amount of such transfers, as required by the Financial Transactions Reporting Regulations No. 1 of 2008 issued in terms of section 6(b) of the FTRA, up to the date of examination, in the amount of one million rupees (Rs. 1,000,000) or its equivalent in any foreign currency.
ii. The Bank had failed to maintain up-to-date lists of designated individuals, groups and entities issued under United Nations Regulations No. 1 of 2012 (United Nations Security Council Resolution (UNSCR) 1373), United Nations Regulations No. 2 of 2012 (UNSCR 1267) and United Nations (Sanctions Relating to the Democratic People’s Republic of Korea) Regulations of 2017 (UNSCR 1718) and to include them in the Bank’s Anti-Money Laundering (AML) system.
iii. Despite the above deficiencies in systems and procedures observed, no instances of business relationships with designated individuals or entities maintained by the Bank were revealed during the on-site inspection.
- Amana Takaful Life PLC
Date of imposition : 18 December 2024
Amount : Rs. 1,000,000.00 (One Million Rupees)
Date of Payment: 30 December 2024
Reason for Imposition of Fine: The Company was imposed the administrative penalty for failure to comply with the FTRA and the laws, regulations and orders issued thereunder;
i. The Company had failed to maintain an up-to-date and complete list of designated individuals, groups and entities issued under United Nations Regulation No. 1 of 2012 (UNSCR 1373) by Extraordinary Gazette No. 2387/02 dated 03 June 2024.
ii. The Company has failed to comply with Rule 58 of the Insurance (Customer Due Diligence) Rules to ascertain whether any customer, prospective customer or beneficiary appears on a list of designated persons or entities issued under any regulation made pursuant to the United Nations Act No. 45 of 1968, due to the following non-compliances:
- The Company has failed to maintain the designated lists of persons, groups and entities issued under United Nations Regulations No. 2 of 2012 (UNSCR 1267) and United Nations (Sanctions Relating to the Democratic People’s Republic of Korea) Regulations No. 2 of 2017 (UNSCR 1718).
- The Company has failed to provide and maintain any reasonable record or evidence that the Company has conducted a verification of its existing customer database against the updated designated list issued under UNSCR 1373 by Extraordinary Gazette No. 2387/02 dated 03 June 2024.
iii. Despite the above deficiencies in systems and procedures observed, the on-site inspection did not reveal any instances of the Company having business relationships with designated individuals or entities.
