The government has gazetted the Convention on the Suppression of Terrorist Financing (Amendment) Bill of 2026, which expands the scope of offences, introduces new investigative powers, and updates the management of seized assets.
Similar to the proposed Prevention of Money Laundering (Amendment) and Financial Transactions Reporting (Amendment) Bills, this draft also includes new definitions explicitly covering “virtual assets”—digital representations of value that can be traded digitally or used for payment or investment purposes.
Under the new law, offences committed wholly or partly outside Sri Lanka are also punishable if they are aimed at carrying out a terrorist act in Sri Lanka, target a Sri Lankan citizen, involve a Sri Lankan government facility, or attempt to compel the Sri Lankan government to act or refrain from acting.
The bill clarifies that to constitute a terrorist financing offence, it is not necessary to prove that the provided funds or assets were actually used in an offence or linked to a specific terrorist act.
It criminalises organising, directing others, or participating as an accomplice in terrorist financing. It also makes it an offence to finance individuals for the purposes of: receiving terrorist training, travelling to another state to become a “foreign terrorist fighter”, or engaging in the trafficking of persons for terrorist training.
The amendment updates penal sanctions, stipulating that a convicted person may face imprisonment, a fine of up to one hundred million rupees, or both.
The timeframe for a police officer to make an ex parte application to the High Court to confirm a freezing order has been extended from 7 days to 14 working days. Additionally, the maximum period the High Court can grant for an extension of a freezing order has been increased from 3 months to 6 months.
A new provision allows individuals whose legitimate business interests are affected by a freezing order to petition the High Court, which can approve essential and legitimate transactions under its supervision.
The High Court is empowered to appoint a Receiver or Special Manager, or to direct the Proceeds of Crime Management Authority to take possession of, manage, and dispose of frozen or forfeited assets.
Police officers conducting investigations are now explicitly authorised to use techniques including surveillance, observation, undercover operations, video recording, listening devices, controlled deliveries, and accessing computer data and systems. Covert monitoring and recording require a magistrate-issued warrant.
The bill permits the Sri Lanka Police to form joint investigation teams with other authorities, locally or internationally, for specific periods, with evidence collected by these teams being admissible in court.
The High Court can order named institutions to provide the police with all documents and information relating to business transactions involving frozen funds or assets.
Finally, the amendment updates the provisions for international assistance, stating that the Mutual Assistance in Criminal Matters Act, No. 25 of 2002, shall apply for cooperation between Sri Lanka and other countries or organisations regarding investigations, prosecutions, and forfeitures under the Act.
