11 May 2026
The Centre for Policy Alternatives (CPA) notes that the Prevention of Money Laundering (Amendment) Bill was tabled in Parliament on 5th May 2026. This statement highlights key concerns arising from the proposed Bill, building on issues previously raised by CPA in relation to similar legislation (see CPA statement of 9 April 2026).
The stated objective of the Bill is to align Sri Lanka’s legal framework with the requirements of the Financial Action Task Force (FATF) and to strengthen the country’s asset recovery and financial investigation regime, particularly in light of the Proceeds of Crime Act (2025). While compliance with international obligations is necessary, CPA reiterates its concern that such laws should not undermine existing constitutional safeguards including fundamental rights. CPA notes that the FATF framework also requires such laws to comply with local and international human rights standards.
In terms of substance, CPA highlights several provisions of the Bill that raise serious constitutional concerns. Notably, provisions enabling the compulsion of sworn affidavits or statements from suspects engage the right against self-incrimination and the presumption of innocence. While such mechanisms are used in other jurisdictions to address serious financial crime and illicit enrichment, their adoption requires caution. If not carefully framed, they risk reversing the burden of proof and undermining core safeguards of the criminal justice system. Any such framework must therefore balance effective law enforcement with the protection of fundamental rights, which can only be achieved through a broad-based and inclusive consultative process.
CPA is further concerned by the expansion of executive powers relating to the freezing of assets. The proposed provisions permit law enforcement authorities to freeze not only suspected proceeds of crime but also corresponding or untainted assets, without prior judicial authorisation in the first instance for 14 working days. Such measures risk arbitrary interference with property rights and may have severe consequences for lawful businesses and livelihoods, particularly given the extended duration of such freezing orders without adequate judicial oversight.
The Bill also introduces broad surveillance powers, including access to digital systems, covert monitoring and the use of intrusive investigative techniques based on a relatively low threshold of suspicion. CPA notes that these provisions lack sufficient statutory safeguards, including clear limitations, oversight mechanisms and protections for privileged, sensitive or confidential information. In the absence of such safeguards, these powers pose a significant threat to the right to privacy.
CPA also notes with concern the expansion of the scope of “unlawful activity” and the removal of the requirement for a prior conviction for the predicate offence in money laundering prosecutions. While recognising that money laundering is treated as an autonomous offence in international practice, CPA warns that, in the Sri Lankan context, such provisions may facilitate the misuse of anti-money laundering laws to target individuals and entities, including those engaged in legitimate commercial or expressive activities.
These proposed amendments must be viewed against the backdrop of an existing legal framework that provides extensive powers of investigation, asset freezing and forfeiture. Sri Lanka’s experience demonstrates that broad and vaguely defined powers are susceptible to misuse, particularly against dissenting voices and those critical of the government.
In light of the above, CPA calls on the government to withdraw the Bill in its present form and to initiate a transparent and consultative process involving all relevant stakeholders in order to draft a new Bill. It is imperative that any legislative reform aimed at addressing money laundering and related offences incorporates robust safeguards to ensure compliance with constitutional guarantees and to prevent abuse by the executive.