As you may be aware, Sri Lanka is presently engaged in a valiant effort to control many terrorist activities waged by the LTTE, a Group acknowledged worldwide as a Terrorist movement. USA, Canada, the EU and many other countries have banned this movement due to flagrant human rights violations and inhuman acts of terror. They have been designated as a terrorist group by most countries in the western hemisphere. As has been recognized worldwide, the most effective manner to undermine and defeat terrorist activities is to stop or curb its funding sources. Notwithstanding the bans, the LTTE has extended its tentacles in North America, the European Union and Australia. In response, those countries and nations are today taking meaningful steps to stop these fund raising activities and taking the perpetrators of such crimes to justice and we deeply appreciate such moves. The Government of Sri Lanka is dedicated to winning the support of all countries in this regard through the exchange of information on a bi-lateral basis which would enhance bi-lateral co-operation through a structured exchange of information. Only last week, one such initiative with Switzerland was commenced where fruitful discussions were held to establish a framework and modalities for structured co-operation. It has also been recognized that efforts to combat the financing of terrorism require jurisdictions to expand the scope of the anti money laundering framework to include non profit organizations and, in particular, some dubious charities. This is to ensure that such organizations are not used, directly or indirectly, to finance and support terrorism.

Hence, the enactment of the legislation by our country’s legislature is welcomed by all of us who value stable economies and peaceful societies. Due to the scale and magnitude of the heightened global interest in Money Laundering and Terrorist Financing, international obligations too, required many countries to introduce  BIS Review 9/2007  1  legislation. In fact, in terms of their international obligations the legislative approach pursued by many countries, including Sri Lanka, has been in the context of Security Council Resolution 1373 dealing, inter alia, with financing of terrorism and the International Convention on the suppression of financing of terrorism. These agreements have, to a great extent, unified the world in its fight to meet this challenge and, I dare say, the closing of ranks among the countries of the world, would have certainly helped to curtail terrorism which may otherwise have reached unimaginable levels, thereby threatening world peace in general and the world economy in particular. Let me now say a few words about our own efforts in this sphere of activity. The initial phase of establishing a comprehensive framework for anti money laundering and combating financial terrorism in Sri Lanka was focused on the preparation of the draft legislation. With the passage of legislation, our efforts were then directed towards setting up of the infrastructure for the Financial Intelligence Unit (FIU). We now have a fully operational FIU established in the Central Bank, the apex institution in the financial system in Sri Lanka, to meet both its local and international obligations.