The Cabinet of Ministers has granted policy approval to amend Sri Lanka’s Foreign Exchange Act, No. 12 of 2017, to make unauthorized transfers of funds out of the country a criminal offence.
Under the proposed amendment, an individual who remits money overseas as an advance payment for importing goods but fails to import the corresponding goods within a reasonable period could have the transaction treated as an unauthorized foreign exchange transfer.
At present, the law allows the Central Bank of Sri Lanka to impose a financial penalty equivalent to the value of the unauthorized remittance in Sri Lankan rupees. However, such transactions are not currently classified as criminal offences under the Foreign Exchange Act, limiting the legal basis for criminal prosecution.
The government has identified the need to strengthen the legal framework to enable investigative and law-enforcement authorities to take more effective action against unauthorized transfers of funds overseas.
The Cabinet of Ministers therefore approved, in principle, a proposal submitted by the President in his capacity as Minister of Finance, Planning and Economic Development, to amend the 2017 Foreign Exchange Act and introduce specific provisions making unauthorized outward fund transfers criminal offences.
