Sri Lanka has completed its third National Risk Assessment (NRA) for 2024/25 on money laundering, terrorist financing and proliferation financing, providing a comprehensive evaluation of the country’s exposure to financial crimes and emerging threats.
A total of 86 government institutions, regulatory bodies and private sector organisations participated in the process, with nearly 200 experts contributing to the national exercise.
The NRA examined risks associated with Money Laundering (ML), Terrorist Financing (TF) and Proliferation Financing (PF) across 15 core areas. These included ML threats and vulnerabilities, sector risks within banking, securities and insurance industries, vulnerabilities among other financial institutions and designated non-financial businesses, as well as risks linked to non-profit organisations, tax crimes, environmental crimes and virtual assets.
A key milestone in the latest assessment is the inclusion of Sri Lanka’s first national risk evaluation of proliferation financing, conducted alongside ML and TF assessments. The study also expanded its scope to incorporate new risk areas such as tax crimes and proliferation financing while considering global and regional risk trends.
According to the report, Sri Lanka’s overall national money laundering risk remains at a medium level, consistent with the previous assessment. This rating is based on a combination of the country’s ML threat level and vulnerability level, both assessed as medium.
Drug trafficking was identified as the most serious predicate offence generating illicit proceeds, with its ML threat level increasing to high from the previous medium-high rating. Fraud and customs-related offences, including trade-based money laundering, were rated as medium-high threats. Meanwhile, the threat level of bribery and corruption declined to medium from medium-high, partly reflecting an improvement in Sri Lanka’s score in the Corruption Perceptions Index, which rose from 32 in 2024 to 35 in 2025.
Other offences such as robbery, environmental and natural resource crimes, illegal fishing activities, human trafficking and tax crimes were categorised as medium-level threats. Counterfeiting of currency continued to reflect a low threat level.
However, Sri Lanka’s terrorist financing risk has increased to medium-high, up from the previous medium rating. Authorities attributed this rise to evolving threats from extremist and separatist networks, potential diaspora funding, digital radicalisation, regional spillover risks and the use of informal or emerging financial channels.
The assessment also evaluated risks linked to legal persons, virtual asset service providers, financial inclusion products and certain categories of non-profit organisations. Based on the findings, 15 key recommendations have been proposed, which will guide the update of Sri Lanka’s National Policy on Anti-Money Laundering, Countering the Financing of Terrorism and Countering Proliferation Financing for the 2026–2030 period. Authorities say the findings will help both public and private sector institutions strengthen risk mitigation strategies and safeguard the stability and integrity of Sri Lanka’s financial system.
Source : Daily News
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