Sri Lanka

Last Updated: 19/02/2007

CENTRAL AUTHORITY FOR REPORTING

Financial Intelligence Unit.

ARE LAWYERS COVERED BY ANTI- MONEY LAUNDERING LEGISLATION?

Section 35, Prevention of Money Laundering Act

35. In this Act “designated non-finance business” includes -

lawyers, notaries, other independent legal professionals and accountants when they prepare for or carry out transactions for their clients in relation to any of the following activities: -
1. buying and selling of real estate;
2. managing of client money, securities or other assets;
3. management of bank, savings or securities accounts;
4. organization of contributions for the creation, operation or management of companies; and
5. creation, operation or management of legal persons or arrangement and the buying and selling of business entities.

NAME LAWS REGARDING ANTI-MONEY LAUNDERING PROCEDURES

Prevention of Money Laundering Act 2005 (PMLA).
Financial Transactions Reporting Act 2005 (FTRA).
Convention on the Suppression of Terrorist Financing Act No.25 of 2005.
Mutual Assistance in Criminal Matters Act, No.25 of 2002.
Extradition Law, No.8 of 1977.

IN ADDITION TO THESE LAWS, IS THERE ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS CURRENTLY IN PLACE?

No information available

UNDER WHAT CIRCUMSTANCES IS A LAWYER UNDER THE OBLIGATION TO REPORT?

Under Section 5 of the PMLA, the duty to report of a lawyer is absolute. However, the effect of this absolute duty is whittled down by the effect of Section 13 of the FTRA.

Section 5, Prevention of Money Laundering Act

5 (1) any person who knows or has reason to believe from information or other matter obtained by him in the course of any trade, profession, business or employment carried on by such person, that any property has been derived or realised from any illegal activity, shall disclose his knowledge or belief as soon as is practicable, to the Financial Intelligence Unit. 1.

Section 13, Financial Transactions Reporting Act

13 (1) Nothing contained in sections 4,5,6,7 or 8 of this Act shall be construed as requiring a lawyer to disclose any privileged communication only if -

it is a confidential communication, whether oral or in writing, passing between –
1. a lawyer or legal advisor in his or her professional capacity and another barrister, solicitor, lawyer attorney or legal advisor in such capacity; or
2. a lawyer, or legal advisor in his or her professional capacity and his or her client, whether made directly or indirectly through an agent of either; and
it is made or brought into existence for the purpose of obtaining or giving legal advice or assistance; and
it is not made or brought into existence for the purpose of committing or furthering the commission of some illegal or unlawful act.

LAWYER RESPONSIBILITY/LIABILITY

Section 5, Prevention of Money Laundering Act

Section 5. (2) Any person who fails to comply with the provisions of subsection (1) shall be guilty of an offence under this Act, and shall on conviction after trial before the High Court be liable to a fine not exceeding fifty thousand rupees or to imprisonment of either description for a period not exceeding six months or to both such fine and imprisonment.

CLIENTS IDENTIFICATION AND VERIFICATION

No information available

Information provided by:

Ayomi Aluwihare-Gunawardene, FJ&G de Saram
E-mail: ayomi.aluwihare@fjgdesaram.com or fjgdesaram@fjgdesaram.com.

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Sources

Colombo Page News Desk, “Sri Lanka to appoint Financial Unit to deal with financial crimes”, 11 May, 2006