Sri Lanka Country Summary
Medium Risk
View full Ratings TableSanctions
Lower Concern
FATF AML Deficient List
Lower Concern
Terrorism
Medium Concern
Corruption
Medium Concern
US State ML Assessment
Lower Concern
Criminal Markets (GI Index)
Medium Concern
EU Tax Blacklist
Lower Concern
Offshore Finance Center
Lower Concern
Please note that although the below Summary will give a general outline of the AML risks associated with the jurisdiction, if you are a Regulated entity then you may need to demonstrate that your Jurisdictional AML risk assessment has included a full assessment of the risk elements that have been identified as underpinning overall Country AML risk. To satisfy these requirements, we would recommend that you use our Subscription area.
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Anti Money Laundering
FATF Status
Sri Lanka is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Sri Lanka was a follow-up to the APG evaluation that took place in 2021. According to the Evaluation, Sri Lanka was deemed Compliant for 7 and Largely Compliant for 25 of the FATF 40 Recommendations. It remains Highly effective for 0 and Substantially Effective for 1 of the Effectiveness & Technical Compliance ratings.
Sanctions
International sanctions against Sri Lanka have been enacted under the Canadian Special Economic Measures Act due to gross and systematic violations of human rights in the country. These sanctions include a dealings prohibition and an effective asset freeze on listed persons, restricting Canadians from engaging in transactions or providing services related to those individuals.
Criminality
Rating |
0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 32 |
| World Bank: Control of Corruption Percentile Rank | 40 |
Sri Lanka is grappling with significant challenges related to crime and corruption, characterized by weak enforcement of existing laws and a pervasive culture of impunity. Corruption remains a major barrier to foreign investment and infrastructure development, while various criminal activities, including human trafficking, extortion, and drug trafficking, have surged, exacerbated by the ongoing economic crisis and political instability.
Economy
Sri Lanka is currently emerging from a significant economic crisis that led to political instability in 2022, with a population of approximately 22 million and categorized as a lower middle-income country. Since President Ranil Wickremesinghe took office in July 2022, the government has implemented extensive financial reforms, including tax increases and the privatization of state-owned enterprises, supported by a $3 billion Extended Fund Facility from the IMF aimed at stabilizing the economy and restructuring debt. Despite signs of recovery, such as a 1.6% GDP growth in the third quarter of 2023, challenges persist, including high poverty levels, food insecurity, and a difficult investment climate characterized by policy inconsistency, bureaucratic inefficiencies, and corruption, which hinder foreign direct investment and economic growth.
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