Legal Expertise Must Not Hide Illicit Wealth | Former Judge Calls for Greater Vigilance

COLOMBO (News 1st); Retired Supreme Court Judge Justice Buwaneka Aluwihare, PC, has emphasized that the fight against money laundering, terrorist financing and related financial crimes can no longer be left solely to banks, financial institutions and law enforcement agencies, warning that legal professionals have a crucial role to play in protecting the integrity of the financial and legal systems.

Addressing the inaugural National Anti-Money Laundering Symposium organized by the Bar Association of Sri Lanka, Justice Aluwihare said the anti-money laundering and counter-terrorism financing framework now extends well beyond the traditional financial sector, placing responsibilities on accountants, auditors, securities market participants, dealers in high-value assets, trust and company service providers and members of the legal profession.

Addressing concerns over why lawyers are increasingly being brought into the anti-money laundering framework, Justice Aluwihare noted that legal professionals occupy a unique position in modern commercial and financial transactions.

He explained that lawyers are often involved in property transactions, the establishment and management of companies and trusts, and other arrangements through which ownership and control of assets may be created, transferred or concealed.

While these are entirely legitimate professional activities, he warned that the same mechanisms can also be exploited by criminals to disguise the ownership, origin, movement or destination of illicit funds.

"The very mechanisms that facilitate legitimate commerce can also be misused to disguise the ownership, origin, movement or destination of criminal proceeds," he said.

According to Justice Aluwihare, professionals involved in facilitating such transactions must understand who their clients are, identify beneficial owners where necessary, understand the purpose of transactions, remain alert to warning signs and comply fully with legal obligations.

He stressed that the legal profession's responsibility extends beyond regulatory compliance and is fundamentally linked to maintaining public confidence in the administration of justice.

"A lawyer cannot knowingly permit his or her professional service to become an instrument through which the proceeds of crime are concealed, moved, converted or legitimised," he said.

Justice Aluwihare also addressed concerns regarding legal professional privilege, a subject that has generated considerable debate within legal circles.

He reaffirmed that legal professional privilege remains a fundamental safeguard and an essential component of the justice system.

However, he cautioned that those protections must not be misused.

"The privilege belongs to the administration of justice. It cannot properly be converted into a mechanism for facilitating crime or concealing criminal property," he said.

The former Supreme Court Judge emphasized that legal professional privilege and anti-money laundering obligations should not be viewed as competing principles, but rather as complementary safeguards designed to uphold the integrity of the legal system.