The dangers of lax foreign exchange laws

COLOMBO (News 1st) - Sri Lanka’s new Foreign Exchange Act No 12 of 2017 came into effect on the 20th of November last year replacing the previous Exchange Control Act. In December of the same year, the Financial Action Task Force (FATF) classified Sri Lanka as a high-risk jurisdiction for laundering proceeds of crime and terrorist finances. The foreign exchange bill was presented by the Prime Minister as the Minister of National Policies and Economic Affairs on the 7th of April 2017 and was passed in Parliament on the 25th of July. However, experts say that the act does not appear to have any formal regulatory or investigative process established for effective tracking, profiling potential suspects and investigation based on a developed evidence matrix of potential risks of organized money laundering. Speaking to News 1st on an earlier occasion, the former chairman of the Ceylon Chamber of commerce Chandra Jayaratne said, most of the penalties stipulated in the act are subjected to the minister's concurrence. As per the new act, a person who brings into the country undeclared money worth 1 million USD will only have to pay 1 percent as a fee. If the value of the undeclared amount is over 1 million USD that 1 percent too will be waived. It is essential that the government looks into the longer-term risks to the national economy as a result of this act. Legal experts point out that there are politicians as well as other businessmen who have openly admitted in court to having foreign exchange outside the country.It would appear that members of the opposition are fast asleep in the style of Rip Van Winkle. International monitoring of financial affairs have picked up on the activities going on in Sri Lanka and the spotlight is now on monitoring these countries financial transactions to find out attempts of money laundering, and terrorism financing. This is exactly what would happen when people who are dishonest are placed in power. Just as the idiom goes, power corrupts, absolute power corrupts absolutely.