Combating The Financing of Terrorism and The Financial Action Task Force Recommendations (FATF): A Sri Lankan Perspective

This study focuses on the implementation of the Financial Action Task Force (FATF) recommendations on countering the financing of terrorism from Sri Lanka’s perspective, and further on the opportunities for enhancement of Sri Lanka’s international relations. The research objectives were formulated to identify the nature of awareness of Anti- Money Laundering and Countering the Financing of Terrorism (AML/CFT) regime, and associated risks that arise as a consequence of ineffective implementation, to examine the weaknesses in the implementation process and the benefits of effective implementation of recommendations. The total study population consists of 500 employees of different institutions. A Google questionnaire was used for data collection. Accordingly, 198 participants responded and all of them were considered as the study sample by using a convenience sampling technique. The study found that Sri Lanka still must make significant progress toward meeting the technical/effectiveness aspects of recommendations. Further, it was revealed that the status of awareness of AML/CFT matters is at an average level, and issues associated with investigations and prosecutions have been identified as the fundamental weakness in the system. Poor international relations have been identified as the main consequence of ineffective implementation. Moreover, the study identifies that effective implementation of recommendations increases international acceptance, and encourages foreign direct investments in Sri Lanka. The study recommends, Sri Lanka, as a country with painful experiences of terrorism, needs to work with a proper action plan followed by high-level political commitment in effectively implementing the FATF recommendations on countering the financing of terrorism as an embedded practice.