Sri Lanka has never before demonstrated such strong political will, commitment, and interagency coordination in its efforts to combat money laundering, experts say.
Following the launch of the country’s second National Risk Assessment (NRA) in 2021, Sri Lanka adopted a five-year National Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Policy in 2023. Alongside this, formal preparations began for the Mutual Evaluation (ME) coordinated by the Asia/Pacific Group on Money Laundering (APG). These preparations included the development of institution-specific action plans and the establishment of a high-level AML/CFT Task Force to oversee implementation.
The Task Force, which was reconstituted in December 2024, includes senior representatives from across key sectors, including Cabinet Ministers, to ensure effective oversight and enhanced interagency cooperation. During 2024, Sri Lanka focused on operationalising its Action Plans through extensive stakeholder engagement and by formalising data collection mechanisms. Greater emphasis was also placed on Public-Private Partnerships to improve the private sector’s understanding of money laundering and terrorist financing (ML/TF) risks.
Speaking to The Sunday Times Business, Deputy Minister of Digital Economy Eranga Weeraratne said his ministry is currently preparing a concept paper aimed at developing a regulatory framework for Virtual Asset and Service Providers (VASPs), including cryptocurrencies.
“We had a meeting with all members of the subcommittee established under the National Coordinating Committee (NCC) to produce a proposal incorporating best practices from regional countries. The concept paper is currently being formulated and will be shared with committee members at the next meeting,” he said. The Deputy Minister added that the paper is expected to be submitted to the Cabinet, with the goal of finalising the regulatory framework by the second quarter of this year.
These developments come as Sri Lanka prepares for its third Mutual Evaluation by the APG, with a focus on further strengthening the AML/CFT framework. Preparatory work began well in advance under the guidance of the NCC, which is chaired by the Central Bank Governor.
According to Subhani Keerthiratne, Director of the Financial Intelligence Unit (FIU) of the Central Bank, legislative reform is a key component of the ME preparation process, with several critical laws currently progressing through the legislative system.
“To ensure readiness, a mock evaluation was conducted in 2025, which resulted in the refinement of Action Plans based on high-priority recommendations,” she told The Sunday Times Business.
She said the third NRA was conducted with the participation of more than 200 experts representing 86 public and private sector institutions. The National AML/CFT Policy is currently being updated, while the second phase of the mock evaluation is now underway. In addition, a centralised Project Office and Project Management Office have been established to coordinate ME-related activities and documentation.
Key submission documents — including the Risk and Context Report, Technical Compliance Report, and Effectiveness Report — are being drafted for submission in early 2026, ahead of the on-site assessment scheduled for late 2026.
Ms. Keerthiratne added that, to support the final phase of preparation, a request has been made to recognise the upcoming Mutual Evaluation as a national state priority.
She also noted that the progress achieved so far was communicated to the President on Tuesday. The President called for expedited technical amendments to existing legislation, measures to address human resource shortages, and swift action to ensure staff retention throughout the evaluation process.
Addressing the discussion, the President stressed that before demonstrating integrity to external stakeholders, the government must first take responsibility for its own actions and remain firmly committed to ensuring good governance.
