ACT, No. 40 OF 2011

40of2011.pdf
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PARLIAMENT OF THE DEMOCRATIC
SOCIALIST REPUBLIC OF
SRI LANKA
PREVENTION OF MONEY LAUNDERING
(AMENDMENT) ACT, NO. 40 OF 2011
[Certified on 06th October, 2011]
Printed on the Order of Government
Published as a Supplement to Part II of the Gazette of the Democratic
Socialist Republic of Sri Lanka of October 07, 2011
PRINTEDAT THEDEPARTMENT OFGOVERNMENTPRINTING,SRILANKA
TO BEPURCHASED AT THEGOVERNMENT PUBLICATIONSBUREAU, COLOMBO 5
Price : Rs. 10.00 Postage : Rs. 10.00

Prevention of Money Laundering (Amendment) 1
Act, No. 40 of 2011
[Certified on 06th October, 2011]
L.D.—O. 9/2010.
ANACT TO AMEND THE PREVENTION OF MONEY LAUNDERING
ACT, NO. 5 OF 2006
Be it enacted by the Parliament of the Democratic Socialist
Republic of Sri Lanka as follows:-
1. This Act may be cited as the Prevention of Money Short tile.
Laundering (Amendment) Act, No. 40 of 2011.
2. Section 2 of the Prevention of Money Laundering Amendment of
Act, No.5 of 2006 (hereinafter referred to as the “principal section 2 of the
Prevention of
enactment”) is hereby amended in paragraph (a) of that
Money
section by the substitution for the words “being resident in Laundering Act,
Sri Lanka;” of the words “in Sri Lanka;”. No. 5 of 2006.
3. Section 3 of the principal enactment is hereby Amendment of
amended as follows:— section 3 of the
principal
enactment.
(1) in subsection (1) thereof by the repeal of all the
words from “knowing or having reason” to the end
of that subsection and the substitution therefor of
the following:—
“knowing or having reason to believe that such
property is derived or realized, directly or
indirectly from any unlawful activity, or from
the proceeds of any unlawful activity shall be
guilty of the offence of money laundering and
shall on conviction after trial before the High
Court be liable to a fine which shall be not less
than the value of the property in respect of which
the offence is committed and not more than
three times the value of such property, or to
rigorous imprisonment for a period of not less
than five years and not exceeding twenty years,
or to both such fine and imprisonment.”;
2 Prevention of Money Laundering (Amendment)
Act, No. 40 of 2011
(2) by the insertion immediately after subsection (1)
thereof of the following new subsection:—
“(1A) The assets of any person found guilty
of the offence of money laundering under this
section shall be liable to forfeiture in terms of
Part II of this Act.”;
(3) in subsection (3) thereof by the substitution for the
words “for the commission by the accused of the
unlawful activity” of the words “for the commission
of the unlawful activity”.
Amendment of 4. Section 6 of the principal enactment is hereby
section 6 of the amended by the substitution for the words “be liable to a
principal
enactment. fine not exceeding fifty thousand rupees or to imprisonment
of either description for a period not exceeding six months,”
of the words “be liable to a fine not exceeding one hundred
thousand rupees or to imprisonment of either description for
a period not exceeding twelve months,”.
Amendment of 5. Section 7 of the principal enactment is hereby
section 7 of the amended in subsection (1) thereof by the substitution for
principal
enactment. the words “not below the rank of Superintendent of Police
or in the absence of such an officer an Assistant
Superintendent of Police may,” of the words “not below the
rank of an Assistant Superintendent of Police may,”.
Amendment of 6. Section 8 of the principal enactment is hereby
section 8 of the amended as follows:—
principal
enactment.
(1) in subsection (1) of that section, by the substitution
for the words “provisions of section 6 shall, within
the seven days during which such order shall be in
force, make an application” of the words “provisions
of section 7 shall within the seven days during
which such order shall be in force, make an exparte
application”;
Prevention of Money Laundering (Amendment) 3
Act, No. 40 of 2011
(2) in subsection (2) of that section—
(i) by the repeal of paragraph (b) thereof and the
substitution therefor of the following:—
“(b) to the requirement that the maximum
period of any extension so granted
shall not exceed three months at any
given time and in any event shall not
in the aggregate exceed a period of two
years from the date of the issuing of
the Freezing Order by such police
officer:”;
(ii) by the substitution in the proviso thereof for
the words “ indictment is filed for the offence
of money laundering in respect of” and for
the words “Freezing Order” wherever such
words appear in such proviso, of the words
“indictment is filed for an offence under
section 3 of this Act in respect of” and
“Freezing Order” respectively;
(3) in subsection (3) thereof by the substitution for the
words “Freezing Order” and “Order of Freezing” of
the words “Freezing Order”.
7. Section 9 of the principal enactment is hereby Amendment of
amended by the substitution for the words “No transaction section 9 of the
principal
shall be effected” of the words and figures “No transaction
enactment.
shall, except with the sanction of Court as provided for in
section 10, be effected”.
8. Section 10 of the principal enactment is hereby Amendment of
amended as follows:- section 10 of
the principal
enactment.
(1) by the substitution for the words “make order
permitting” of the words “make order sanctioning” ;
and
4 Prevention of Money Laundering (Amendment)
Act, No. 40 of 2011
(2) by the repeal of the marginal note to that section
and the substitution therefor of the following:—
“High Court to sanction
essential and legitimate
transactions”.
Amendment of 9. Section 11 of the principal enactment is hereby
section 11 of amended by the substitution for the words “not below the
the principal
rank of a Superintendent of Police or in the absence of such
enactment.
an officer an Assistant Superintendent of Police,” of the
words “not below the rank of an Assistant Superintendent
of Police,”.
Amendment of 10. Section 12 of the principal enactment is hereby
section 12 of
amended as follows:—
the principal
enactment.
(1) by the repeal of all the words from “Any Police
Officer” to the end of paragraph (a) of subsection
(1) of that section and the substitution therefor of
the following:—
“Any police officer not below the rank of
an Assistant Superintendent of Police shall
take possession of, and otherwise deal with,
any account, property or investment, which is
subject to a Freezing Order, and the Court may
on application made by the said police officer
and for the purpose of determining who owns,
possesses or is in control of such account,
property or investment to which the Freezing
Order relates, order—
(a) that any document relevant to—
(i) identifying, locating or
quantifying such account,
property or investment;
(ii) establishing the ownership,
possession or control of such
account, property or investment;
Prevention of Money Laundering (Amendment) 5
Act, No. 40 of 2011
(iii) obtaining any other information
pertaining to such account,
property or investment,
be delivered forthwith to such police officer; and ”;
(2) in subsection (3) of that section, by the substitution
for the words “Upon determining in whom the
ownership, possession or control of any property to
which the Freezing Order relates,” of the words
“Upon determining who owns, possesses or is in
control of any account, property or investment to
which the Freezing Order relates,”.
11. Section 13 of the principal enactment is hereby Amendment of
amended as follows:— section 13 of the
principal
enactment.
(1) by the repeal of subsection (1) therof and the
substitution therefor of the following:—
“(1) Subject to the provisions of subsection
(2), where a person is convicted of an offence
under section 3 of this Act, the Court convicting
such person shall, make order that any account,
property or investment, owned, possessed or
under the control of such person which has been
derived or realized directly or indirectly from
any unlawful activity, any income or profit
earned on such account, property or investment
and any instrumentalities used in the commission
of such unlawful activity, be forfeited to the State
free from all encumbrances.”;
(2) by the insertion immediately after subsection (1)
thereof of the following new subsections:—
“(1A) Where such account, property,
investment, income, profit or instrumentalities
cannot be found or traced the Court convicting
such person shall order him to pay to the State
the equivalent value of such account, property,
investment, income, profit or instrumentalities.
6 Prevention of Money Laundering (Amendment)
Act, No. 40 of 2011
(1B) Where such person fails to pay such
equivalent value, the Court shall, in accordance
with the provisions of the Code of Criminal
Procedure Act, No. 15 of 1979, order him to pay
such value as a fine within such period as may
be specified by Court.”;
(3) in subsection (2) thereof by the substitutions for
the words “a bona fide interest in such property.”
of the words “a bona fide interest in such property,
or investment or any income or profit earned on
such property or investment.”;and
(4) in subsection (4) thereof by the substitution for the
words “any movable or immovable property
belonging to the person” of the words “any property
belonging to the person”.
Replacement of 12. Section 14 of the principal enactment is hereby
section 14 of the repealed and the following section is substituted therefor:—
principal
enactment.
“Restoring 14. (1) Any person, being a person to whom
the rights of the provisions of paragraph (a) of section 2 do
bona fide
not apply, who owns, possesses or is in control
claimants.
of, any account, property or investment to
which the Freezing Order made under section
7 relates, may within thirty days of the making
of such Order apply to the Court making the
same, seeking the intervention of Court to
exclude from such Order any account, property
or investment he owns, possesses or is in
control of.
(2) Where an application is made under
subsection (1), the Court shall upon being
satisfied on the information before Court
that—
(a) the account, property or investment
which the applicant owns, possesses
or is in control of, is not derived or
Prevention of Money Laundering (Amendment) 7
Act, No. 40 of 2011
realized directly or indirectly, from any
unlawful activity or from the proceeds
of any unlawful activity or the account,
property or investment is not an
instrumentality used in the commission
of such unlawful activity;
(b) the applicant was not in any way
involved in the commission of the
offence of money laundering in relation
to which the Freezing Order was made;
(c) the applicant had acquired an
interest in the account, property or
investment at any time prior to the
commission of the offence of money
laundering and the applicant was
unaware of the fact that the defendant
had used or had intended to use such
account, property or investment in or
in connection with the commission of
such offence; or
(d) the applicant had acquired an interest
in the account, property or investment
at the time of or after the commission
or alleged commission of the offence,
that such interest was acquired in
circumstances which would not give
rise to a reasonable suspicion that such
account, property or investment was
proceeds or instrumentalities of such
offence,
make Order for the release of the account,
property or investment which is the subject of
the application before it, from the Freezing
Order made under section 7, and restore the
right of the applicant in respect of the same.”.
8 Prevention of Money Laundering (Amendment)
Act, No. 40 of 2011
Replacement of 13. Section 15 of the principal enactment is hereby
section 15 of the
repealed and the following section is substituted therefor:—
principal
enactment.
“Appointment 15. Where any account, property or
of a Receiver investment or any income or profit earned on
upon such account, property or investment has been
Forfeiture. forfeited to the State under section 13 of this
Act, the Court making the Order of Forfeiture
may, appoint a Receiver in accordance with
the provisions of the Civil Procedure Code
(Chapter 101) to be in charge of such account,
property, investment, income or profit so
forfeited.”.
Amendment of 14. Section 20 of the principal enactment is hereby
section 20 of amended as follows:—
the principal
enactment.
(1) by the addition, immediately after subsection (2)
of that section, of the following new subsections:—
“(3) No person shall—
(a) falsify, conceal, destroy or otherwise
dispose of, or cause or permit the
falsification, concealment, destruction
or disposal of, any document or
material or thing which is or is likely to
be relevant to the execution of any
Order made in accordance with the
provisions of this Act; or
(b) divulge, the fact that an investigation
into an offence of money laundering or
an offence under the law of any foreign
State corresponding to the offence of
money laundering, is being, or is about
to be made, or divulge to another
person any other information which is
likely to prejudice such investigation.
Prevention of Money Laundering (Amendment) 9
Act, No. 40 of 2011
(4) Any person who contravenes the provisions
of subsection (3) shall be guilty of an offence under
this Act and shall on conviction after trial before
the High Court be liable to a fine not exceeding
one hundred thousand rupees or to imprisonment
of either description for a period not exceeding
twelve months or to both such fine and
imprisonment.”;
(2) by the repeal of the marginal note to that section
and the substitution therefor of the following new
marginal note:—
“Offences”.
15. Section 21 of the principal enactment is hereby Repeal of
repealed. section 21 of the
principal
enactment.
16. Section 23 of the principal enactment is hereby Amendment of
amended by the substitution for the words “by means of any section 23 of the
principal
illegal activity,” of the words “by means of any unlawful
enactment.
activity,”.
17. Section 27 of the principal enactment is hereby Amendment of
amended as follows:— section 27 of the
principal
enactment.
(1) in subsection (1) thereof by the substitution for the
words and figure “under section 2 of this Act,” of
the words and figure “under section 3 of this Act,”;
(2) in subsection (2) of that section, by the
substitution for the words “No –Commonwealth
country” of the words “Non-Commonwealth
country”;
(3) by the repeal of subsection (3) of that section and
the substitution therefor of the following:—
“(3) The grant of assistance to any country
referred to in subsection (2) may be made subject to
10 Prevention of Money Laundering (Amendment)
Act, No. 40 of 2011
such terms and conditions as the Minister may deem
appropriate in the circumstances.”.
Amendment of 18. Section 33 of the principal enactment is hereby
section 33 of the amended as follows:—
principal
enactment.
(1) by the insertion immediately after subsection (1)
thereof of the following new subsection: —
“(2) In particular and without prejudice to the
generality of the powers conferred by subsection
(1), the Minister may make regulations in respect
of the following matters:—
(a) prescribing any business as a “designated non
finance business” taking into consideration
the interests of the national economy;
(b) prescribing any business as a “finance
business” taking into consideration the
interest of the national economy.”.
(2) by the renumbering of subsections (2) and (3) of
that section, as subsections (3) and (4) thereof,
respectively.
Amendment of 19. Section 35 of the principal enactment is hereby
section 35 of the amended as follows:—
principal
enactment.
(1) by the insertion immediately before the definition
of the expression “designated non-finance
business” of the following new definition—
“account” means any facility or arrangement by
which an Institution does any of the
following:—
(a) accepts deposits of currency;
Prevention of Money Laundering (Amendment) 11
Act, No. 40 of 2011
(b) allows withdrawals of currency; or
(c) pays cheques or payment orders drawn on the
Institution or collects cheques or payment
orders on behalf of a person other than the
Financial Institution,
and includes any facility or arrangement for a safety
deposit box or any other form of safe deposit;”;
(2) in the definition of the expression “designated non-
finance business”—
(a) by the repeal of paragraph (e) thereof;
(b) by the relettering of all paragraphs from (f) to
(l) as paragraphs (e) to (k) thereof, respectively;
(c) by the repeal of paragraph (m) thereof and the
substitution therefor of the following new
paragraphs:—
“(l) pawn brokering under Pawn Brokers
Ordinance (Chapter 90);
(m) non profit organizations or non
governmental organizations registered
under any written law;”;
(3) in the definition of the expression “finance
business”—
(a) by the repeal of paragraph (b) thereof and the
substitution therefor of the following
paragraph:—
“(b) finance business as defined in Finance
Companies Act, No. 78 of 1988 or any
Act enacted in place thereof ;”;
12 Prevention of Money Laundering (Amendment)
Act, No. 40 of 2011
(b) by the repeal of paragraph (k) thereof and the
substitution therefor of the following
paragraphs:—
“(k) any company, to whom a licence to
carry on banking business under the
Banking Act, No. 30 of 1988, is issued;
(l) any finance business carried on by any
society registered under the Co-
operative Societies Law, No. 5 of 1972
or any Act enacted in place thereof;
(m) any finance business carried on by the
Samurdhi Authority of Sri Lanka,
established by the Samurdhi Authority
of Sri Lanka Act, No. 30 of 1995; and
(n) underwriting and placement of
insurance as well as insurance
intermediation by agents and brokers.”;
and
(4) in the definition of the expression “unlawful
activity”—
(a) by the repeal of paragraph (e) thereof and the
substitution therefor of the following:—
“(e) the Exchange Control Act (Chapter
423) and any Rule, Order or Regulation
made thereunder;”;
(b) by the repeal of paragraphs (j) and (k) thereof
and the substitution therefor of the following
paragraphs:—
“(j) any written law for the time being in
force relating to offences connected
with the trafficking or smuggling of
persons;
Prevention of Money Laundering (Amendment) 13
Act, No. 40 of 2011
(k) the Customs Ordinance (Chapter 235)
and any Regulation, Rule or Order made
thereunder;
(l) the Excise Ordinance (Chapter 52) and
any Regulation, Rule or Order made
thereunder;
(m) the Payment Devices Frauds Act, No.
30 of 2006 and any Regulation, Rule
or Order made thereunder;
(n) the National Environmental Act, No.
47 of 1980 and any Regulation, Rule
or Order made thereunder;
(o) an offence under any other written law
for the time being in force which is
punishable by death or with
imprisonment for a term five years or
more:
Provided however that,
notwithstanding anything to the
contrary in the preceding provision,
any offence under sections 386, 388,
399 and 401 of the Penal Code (Chapter
19) shall be deemed to be an unlawful
activity for the purposes of this Act;
and
(p) an act committed within any
jurisdiction outside Sri Lanka, which
would either constitute an offence in
that jurisdiction or which would if
committed in Sri Lanka amount to an
unlawful activity within the meaning
of this Act.”.
20. In the event of any inconsistency between the Sinhala text to
Sinhala and Tamil texts of this Act, the Sinhala text shall prevail in case
of inconsistency.
prevail.

14 Prevention of Money Laundering (Amendment)
Act, No. 40 of 2011
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