The Gulf between the Rule of Law and Money Laundering in Sri Lanka

Abstract

Recent media reports regarding the alleged involvement of some officers of Police Narcotic Bureau (PNB) in drug deals suggest that drug trafficking can be a major source of money laundering activities in Sri Lanka. It is an ill-fated situation when the Police Department, being the main law enforcement authority, is required to undertake investigations to detect assets reported to be illegally acquired by some of their own officers attached to PNB. Stories revealed by the media regarding the financial transactions and luxury properties owned by the alleged criminals, who were taken into the legal custody, suggest that there are serious gaps in the legal framework applicable to money laundering activities and the compliance therewith by relevant stakeholders. Undetected money laundering creates more room for bribery and corruption at the level of critical gatekeepers in the legal system and thereby weakens action against unlawful activities. It can also undermine the socio-political fabric of society. This article focuses on lacunas observed in the implementation phase of anti-money laundering laws in Sri Lanka.