The Cabinet has granted policy approval to amend Sri Lanka’s Foreign Exchange Act to make unauthorized transfers of funds out of the country a criminal offence.
The proposal to amend the Foreign Exchange Act No. 12 of 2017 was presented by the President in his capacity as Minister of Finance, Planning and Economic Development.
Under the proposed changes, specific provisions will be introduced to enable unauthorized overseas transfers to be treated as criminal offences under the Foreign Exchange Act.
The government cited instances in which a person in Sri Lanka transfers funds overseas as an advance payment for importing goods but subsequently fails to import the corresponding goods within a reasonable period.
Such transactions could be considered unauthorized transfers of foreign exchange out of the country.
Under the existing provisions of the Foreign Exchange Act, the Central Bank of Sri Lanka can only impose a financial penalty in Sri Lankan rupees equivalent to the value of the unauthorized transfer.
However, such unauthorized transfers are currently not defined as criminal offences under the act, which does not provide for criminal prosecution in such cases.
The government said criminalizing unauthorized overseas fund transfers would enable investigative and law enforcement agencies to take more effective action against such transactions within the relevant legal framework.
Accordingly, Cabinet granted policy approval for amendments to the Foreign Exchange Act to introduce the necessary provisions. (Newswire)