ACT, No. 5 OF 2006

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PARLIAMENT OF THE DEMOCRATIC
SOCIALIST REPUBLIC OF
SRI LANKA
—————————
PREVENTION OF MONEY LAUNDERING
ACT, NO. 5 OF 2006
—————————
[Certified on 06th March, 2006]
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 March 10, 2006
PRINTEDATTHE DEPARTMENTOFGOVERNMENTPRINTING,SRI LANKA
TOBEPURCHASED ATTHEGOVERNMENTPUBLICATIONSBUREAU,COLOMBO1
Price : Rs. 19.00 Postage : Rs. 7.50

Prevention of Money Laundering 1
Act, No. 5 of 2006
[Certified on 6th March, 2006]
L.D. — O. 15/2005.
ANACT TO PROHIBIT MONEY LAUNDERING IN SRI LANKA ; TO PROVIDE
THE NECESSARY MEASURES TO COMBAT AND PREVENT MONEY
LAUNDERING ; AND TO PROVIDE FORMATTERSCONNECTED THEREWITH
OR INCIDENTAL THERETO.
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 title and
Laundering Act, No. 5 of 2006. date of
operation.
2. The provisions of the Act shall apply in relation to— Applicability of
the provisions of
the Act.
(a) a person who commits an offence under the
provisions of this Act whilst being resident in
Sri Lanka;
(b) an Institution which is used for the commission of
an offence under the provisions of this Act, which
Institution is carrying on business in Sri Lanka and
is either incorporated or registered in Sri Lanka or is
either incorporated or registered as a branch of a
bank incorporated or registered outside Sri Lanka;
(c) an Act which constitutes an offence under this Act,
which is committed in Sri Lanka.
PART I
MONEY LAUNDERING
3. (1) Any person, who— Offence of
money
laundering.
(a) engages directly or indirectly in any transaction in
relation to any property which is derived or realised,
2 Prevention of Money Laundering
Act, No. 5 of 2006
directly or indirectly, from any unlawful activity or
from the proceeds of any unlawful activity;
(b) receives, possesses, conceals, disposes of, or brings
into Sri Lanka, transfers out of Sri Lanka, or invests
in Sri Lanka, any property which is derived or
realised, directly or indirectly, from any unlawful
activity or from the proceeds of any unlawful
activity,
knowing or having reason to believe that such property is
derived or realised, 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
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 the property in respect of which the offence is committed
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. 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.
(2) Any person who attempts or conspires to commit the
offence of money laundering, or aids or abets, the commission
of the offence of money laundering shall be guilty of an
offence under this Act and shall be liable after trial before the
High Court to be punished with the same punishment as is
specified for the offence of money laundering.
In this subsection “abet” shall have the same meaning as
in sections 100 and 101 of the Penal Code.
(3) For the avoidance of doubts, it is hereby declared that
a conviction for the commission by the accused of the
unlawful activity shall not be necessary for the proof of the
offence under the provisions of this Act.
Prevention of Money Laundering 3
Act, No. 5 of 2006
4. For the purposes of any proceedings under this Act, it Presumption.
shall be deemed until the contrary is proved, that any movable
or immovable property acquired by a person has been derived
or realized directly or indirectly from any unlawful activity,
or are the proceeds of any unlawful activity, if such property—
(a) being money, cannot be or could not have been—
(i) part of the known income or receipts of such
person; or
(ii) money to which his known income or receipts
has or had been converted; or
(b) being property other than money, cannot be or could
not have been—
(i) property acquired with any part of his known
income or receipts; and
(ii) property which is or was part of his known
income or receipts; and
(iii) property to which is any part of his known
income or receipts has or had been converted.
5. (1) Any person who knows or has reason to believe Duty of certain
from information or other matter obtained by him in the course persons to
of any trade, profession, business or employment carried on disclose
knowledge or
by such person, that any property has been derived or realised belief of acts
from any unlawful activity, shall disclose his knowledge or constituting the
belief as soon as is practicable, to the Financial Intelligence offence of
Unit. money
laundering.
(2) Any person who fails to comply with the provisions
of subsection (1) 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 fifty thousand rupees or to
imprisonment of either description for a period not exceeding
six months or to both such fine and imprisonment.
4 Prevention of Money Laundering
Act, No. 5 of 2006
(3) The disclosure by a director or officer or servant of an
Institution in terms of the provisions of the Financial
Transactions Reporting Act, No. 6 of 2006 of his knowledge
and belief that any property has been derived or realized
from any unlawful activity, shall be sufficient compliance
by such director, officer or servant, of the duty imposed on
him by subsection (1).
(4) The provisions of subsection (1) shall have effect
notwithstanding any obligation as to secrecy or other
restriction upon the disclosure of information, imposed by
any written law or otherwise, and accordingly any disclosure
by any person in compliance with the provisions of
subsection (1) shall be deemed not to be a contravention of
such obligation or restriction.
(5) In a prosecution for an offence under subsection (2) it
shall be a defence for the accused to prove to Court, on a
balance of probabilities that he had reasonable grounds for
not disclosing his knowledge or belief.
Divulging &c. of 6. Any person who knows or has reason to believe that
information an an investigation into the commission of the offence of money
offence.
laundering has been, is being, or is about to be made, and
who—
(a) divulges, other than in the performance of his duties
under this Act, that fact or other information relating
to such investigation to any Court or to any other
person, knowing that the investigation is likely to
be prejudiced thereby; or
(b) discloses, other than in the performance of his duties
under this Act, the identity of the person against
whom such investigation has been, is being, or is
about to, be made;
(c) knowingly falsifies, conceals, destroys or otherwise
disposes of, or causes or permits the falsification,
Prevention of Money Laundering 5
Act, No. 5 of 2006
concealment, destruction or disposal of, any
document or material which is, or is likely to be,
relevant to that investigation,
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 fifty thousand rupees or to imprisonment of
either description for a period not exceeding six months, or
to both such fine and imprisonment,
PART II
FREEZING AND FORFEITURE OFASSETS INRELATION TO THE OFFENCE
OFMONEY LAUNDERING
7. (1) A Police Officer not below the rank of Freezing of
Superintendent of Police or in the absence of such an officer property.
an Assistant Superintendent of Police may, where there are
reasonable grounds to believe that any person is involved in
any activity relating to the offence of money laundering and
it is necessary for preventing further acts being committed in
relation to such offence, issue an order (hereinafter referred
to as a “Freezing Order”) prohibiting any transaction in
relation to any account, property or investment which may
have been used or which may be intended to be used in
connection with such offence.
(2) The Freezing Order obtained under subsection (1) shall
be issued on—
(a) the person who is believed to be involved in the
activity referred to subsection (1); and
(b) on any other person or institution who or which
may be required to give effect to such Order.
(3) Subject to the provisions of section 8, a Freezing
Order made under subsection (1) shall be in force for a period
of seven days of the making thereof.
6 Prevention of Money Laundering
Act, No. 5 of 2006
(4) Any person who acts in contravention of a Freezing
Order issued on him, shall be guilty of an offence and shall
on conviction after trial before the High Court be liable to a
fine not exceeding one hundred thousand rupees or one and
a half times the value of the money in such account, property
or investment which has been dealt with in contravention of
the Freezing Order, whichever is higher or to imprisonment
of either description for a period not exceeding one year or to
both such fine and imprisonment.
Confirming of 8. (1) The Police Officer issuing the Freezing Order under
Freezing Order
the provisions of section 6 shall, with in the seven days during
by Court.
which such Order shall be in force, make an application to
the High Court seeking confirmation of such Freezing Order
and also if the circumstances so necessitate, request an
extension of the original period of seven days.
(2) Where the High Court is satisfied that there are
sufficient reasons for the making of such Freezing Order, the
Court may confirm the Freezing Order and also grant the
application made for the extension thereof for such periods
as it considers necessary, subject however—
(a) to any Orders which may be made under section 12;
and
(b) to the requirement that the maximum period of any
extension so granted shall not exceed one year from
the date of the making of the Freezing Order by the
Police Officer:
Provided that where indictment is filed for the offence of
money laundering in respect of the account, property or
investment which is subject to the Freezing Order, such
Freezing Order shall unless vacated by Court for reasons to
be recorded, remain in force until the conclusion of the trial
in respect of such offence, or where an appeal is preferred
against a conviction for such offence, until the determination
of the appeal.
Prevention of Money Laundering 7
Act, No. 5 of 2006
(3) Where the High Court confirms a Freezing Order under
subsection (2) it shall cause to be published in at least one
newspaper circulating in the Sinhala, Tamil and English
languages, Notice of such Order, in order to facilitate bona
fide third parties to make application to Court in support of
their claims to the account, property or investment which is
subject to the Order of freezing.
9. No transaction shall be effected in relation to such Transactions in
account, property or investment while the Freezing Order is contravention of
the Freezing
in force and any transaction so effected shall be null and Order to be null
void. and void.
10. In confirming a Freezing Order made under section High Court to
7, the High Court may on an application made in that behalf, permit essential
and legitimate
if it is of opinion that such an Order could damage legitimate
transactions.
business or other interests of any person affected thereby,
and that essential transactions relating to such account,
property or investment as may have been prohibited by such
Freezing Order may be legitimately carried out, make order
permitting the carrying on of such transactions subject to
supervision by and under the direction of a person appointed
in that behalf by Court or of a receiver appointed in that
behalf under section 11.
11. Upon an application made in that behalf by a police Appointment of
officer not below the rank of a Superintendent of Police or in a Receiver.
the absence of such an officer an Assistant Superintendent of
Police, the High Court may appoint a Receiver to take
possession of and otherwise deal with the account, property
or investment which has been subjected to the Freezing Order,
in accordance with such directions as may be given by Court
in that behalf.
12. (1) Any Police Officer not below the rank of a Property
Superintendent of Police shall take possession of, and tracking and
otherwise deal with, any account, property or investment, monitoring.
which is subject to a Freezing Order, and the Court may on
8 Prevention of Money Laundering
Act, No. 5 of 2006
application of the said Police Officer and for the purpose of
determining in whom the ownership, possession or control of
any property to which the Freezing Order relates, lies, Order:—
(a) that any document relevant to—
(i) identifying, locating or quantifying that
property;
(ii) establishing the ownership, possession or
control of that property,
be delivered forthwith to the Police Officer; and
(b) that a named institution furnish to the Receiver all
information obtained by the institution about any
business transaction conducted by or for that person
with the institution during such period before or
after the date of the Order as the Court may direct.
(2) The Court making an Order under subsection (1) shall
upon being satisfied that any person is failing to comply
with, is delaying or is otherwise obstructing the execution
of, an order made under subsection (1) make Order
authorising the Police Officer to enter and search any premises
of that person, and remove any document, material or other
thing therein for the purpose of executing such Order.
(3) Upon determining in whom the ownership, possession
or control of any property to which the Freezing Order relates,
lies, the Police Officer shall report the same to the Court
making the Freezing Order, along with all documents
establishing and supporting such ownership, possession or
control, as the case may be.
Forfeiture of 13. (1) Where a person is convicted of the offence of
property in money laundering, the Court convicting such person shall,
relation to which
offence of subject to the provision of subsections (2) make Order that
money any movable or immovable property of such person derived
laundering has or realised, directly or indirectly from any unlawful activity,
been committed.
be forfeited to the State free from all encumbrances.
Prevention of Money Laundering 9
Act, No. 5 of 2006
(2) In determining whether an Order of forfeiture should
be made under subsection (1), the Court shall be entitled to
take into consideration the fact whether such an Order is
likely to prejudice the rights of a bona fide purchaser for
value or any other person who has acquired, for value, a bona
fide interest in such property.
(3) An Order made under subsection (1) shall take effect—
(a) where an appeal has been preferred to the Court of
Appeal or the Supreme Court against the Order of
forfeiture, upon the determination of such appeal
confirming or upholding the Order of Forfeiture;
(b) where no appeal has been preferred to the Court of
Appeal against the Order of Forfeiture within the
period allowed therefor, after the expiration of the
period within which an appeal may be preferred to
the Court of Appeal, against such Order of Forfeiture.
(4) For the purposes of subsection (1), the Court making
the Order of Forfeiture may presume that any movable or
immovable property belonging to the person convicted of
the offence of money laundering, is derived or realised,
directly or indirectly from any unlawful activity if such
property is not commensurate with the known sources of
income of such person, and the holding of which cannot be
explained on a balance of probabilities, to the satisfaction of
the Court.
14. (1) Any person affected by an Order of Forfeiture Rights of bona
made under section 13 of this Act, may make an application fide claimants.
to Court making the Order of Forfeiture within a period of
thirty days of the making of such Order stating that he has
suffered loss as a result of the making of such Order.
(2) Where an application is made under subsection (1) to
the Court making the Order of Forfeiture, the Court may,
upon being satisfied that the applicant has suffered loss as a
result of its Order, order compensation to be paid to such
person from the property forfeited.
10 Prevention of Money Laundering
Act, No. 5 of 2006
Appointment of 15. Where any property has been forfeited to the State
a Receiver upon under section 13 of this Act, the Court making the order of
confiscation.
Forfeiture may, appoint a Receiver to be in charge of the
property so forfeited.
Secrecy 16. The provisions of this Part of this Act shall have
obligation effect notwithstanding any obligation as to secrecy or other
overridden. restriction upon the disclosure of information imposed by
any written law or otherwise and accordingly any disclosure
of information by any person in compliance with the
provisions of this Part of this Act shall be deemed not to be a
contravention of such obligation or restriction.
PART III
GENERAL
Offences under 17. An offence under this Act shall be a cognisable and
this Act to be non-bailable offence, within the meaning, and for the purpose,
cognisable and of the Code of Criminal Procedure Act, No. 15 of 1979.
non-bailable.
Offences by 18. Where an offence under this Act is committed by a
body of persons. body of persons, then, if that body of persons is—
(a) a body corporate, every director, or other officer of
that body corporate; and
(b) a firm, every partner of that firm; and
(c) an unincorporated body other than a firm, every
individual who is a member of such body and every
officer of that body responsible for its management
and control,
shall be guilty of an offence:
Provided however, that no such person shall be deemed to
be guilty of an offence if he proves that the offence was
committed without his knowledge or that he exercised all
due diligence to prevent the commission of the offence.
Prevention of Money Laundering 11
Act, No. 5 of 2006
19. (1) No suit or prosecution shall lie— Protection for
action taken
under this Act or
(a) against the Financial Intelligence Unit or any person on direction of
authorised to act on behalf of the Financial Authority.
Intelligence Unit for any lawful act which in good
faith is done or purported to be done by the Financial
Intelligence Unit or such person under this Act;
(b) against an Institution or any director, officer, servant
or agent of any such Institution, acting in the course
of his employment or agency or any person referred
to in subsection (1) of section 3, for any lawful act
which in good faith is done or purported to be done
by such Institution, director, officer, servant, agent
or person in the performance of any duty imposed
by this Act, or on the directions of the Authority.
(2) No proceedings, civil or criminal, shall be instituted
in any Court or tribunal against the Financial Intelligence
Unit or any person authorised to act on behalf of the Authority
in respect of any report, made in good faith, by the said
Financial Intelligence Unit or such person under this Act.
(3) Any expenses incurred by the Financial Intelligence
Unit in any suit or prosecution brought by, or against, the
said Financial Intelligence Unit or any person authorized to
act on behalf of the said Financial Intelligence Unit, before
any Court or tribunal in respect of any lawful act done or
purported to be done by the said Financial Intelligence Unit
or a person authorised to act on behalf of the said Financial
Intelligence Unit, under this Act, and any costs paid to, or
recovered by, the said Financial Intelligance Unit or such
person in any such suit or prosecution shall be paid out of, or
credited to, as the case may be, the account of the said
Financial Intelligence Unit.
(4) Any expenses incurred by an Institution or officer,
servant, agent or person referred to in paragraph (b) of
subsection (1) in any suit, prosecution, brought by or against
such Institution or such officer, servant, agent or person before
12 Prevention of Money Laundering
Act, No. 5 of 2006
any court or tribunal in respect of any act which is done or
purported to be done by such Institution or such officer,
servant, agent or person under this Act, or on the direction of
the Financial Intelligence Unit, shall, if the Court or tribunal
holds that the act was done in good faith, be paid by the said
Financial Intelligence Unit, unless such expense is recovered
by such Institution or officer, servant, agent or person, in
such suit or prosecution.
Falsification of 20. (1) No person shall falsify, conceal, unlawfully
documents. destroy or otherwise dispose of, or cause or permit the
falsification, concealment, unlawful destruction or disposal
of any document, material or thing which is, or is likely to be
relevant to the exercise, performance or discharge of any
power, duty or function under this Act.
(2) Any person who contravenes the provisions of
subsection (1) 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 fifty thousand rupees or to
imprisonment of either description for a period not exceeding
one year or to both such fine and imprisonment.
Offences. 21. (1) 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.
(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 any other information to another person
whereby such investigation is likely to be
prejudiced.
Prevention of Money Laundering 13
Act, No. 5 of 2006
(2) Any person who contravenes the provisions of
subsection (1) 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
one year or to both such fine and imprisonment.
22. Where the Minister in consultation with the Minister Asset sharing.
of Finance considers it appropriate, either because an
international arrangement so requires or permits, or in the
interests of comity, he may order that the whole or any part of
any property forfeited under the provisions of this Part of this
Act, or the value thereof, be given or remitted to the requesting
State.
23. Where any officer or servant of an Institution Dealing with
discloses as hereinbefore provided his knowledge or belief property by
Institution &c.
that any property is derived or realized by means of any
not to constitute
illegal activity, any subsequent dealing by such Institution, an offence.
officer or servant with the owner of such property, shall be
deemed not to constitute the aiding or abetment by such
Institution, officer or servant, of an offence under this Act.
PART IV
PROVISIONS RELATING TO EXTRADITION AND MUTUALASSISTANCE IN
RELATION TO THE OFFENCE OF MONEY LAUNDERING
24. The Schedule to the Extradition Law, No. 8 of 1977 Amendment of
the Extradition
is hereby amended by the insertion immediately before Part
Law, No. 8 of
B thereof, of the following:— 1977.
“(47) An offence of Money Laundering within the
meaning of the Prevention of Money Laundering
Act, No. 5 of 2006.”.
25. Notwithstanding anything contained in the Interpretation in
Extradition Law, No. 8 of 1977 an offence in terms of this Act relation to the
Extradition Law.
shall for the purpose only of extradition under that Law, be
14 Prevention of Money Laundering
Act, No. 5 of 2006
deemed not to be a fiscal offence, or an offence of a political
character, or an offence connected with a political offence or
an offence inspired by political motives.
Duty of Minister 26. Where a request is made to the Government of Sri
to notify Lanka by or on behalf of the Government of another country
requesting State
of measures for the extradition of any person accused or convicted of an
taken against offence, under this Act, the Minister shall, on behalf of the
persons for Government of Sri Lanka forthwith notify the Government
whose
of the requesting State of the measures that Government of
extradition a
request is made. Sri Lanka has taken, or proposes to take, for the prosecution
or extradition of that person for that offence.
Assistance to 27. (1) The provisions of the Mutual Assistance in
Commonwealth Criminal Matters Act, No. 25 of 2002 shall, wherever it is
countries &c,.
necessary for the investigation and prosecution of an offence
under section 2 of this Act, be applicable in respect of the
providing of assistance as between the Government of Sri
Lanka and other States who are either Commonwealth
countries specified by the Minister by Order under section 2
of the aforesaid Act or Non-Commonwealth countries with
which the Government of Sri Lanka entered into an
agreement in terms of the aforesaid Act.
(2) In the case of a country which is neither a
Commonwealth country specified by the Minister by Order
under section 2 of the aforesaid Act nor a No-Commonwealth
country with which the Government of Sri Lanka has entered
into an agreement in terms of the aforesaid Act, then it shall
be the duty of the Government to afford all such assistance
to, and may through the Minister request all such assistance
from such country, as may be necessary for the investigation
and prosecution of an offence under section 3 to the extent
required for the discharge of its obligations under the United
Nations Convention (including assistance relating to the
taking of evidence and statements, the serving of process
and the conduct of searches).
Prevention of Money Laundering 15
Act, No. 5 of 2006
(3) The grant of assistance to such country may be made
subject to such terms and conditions as the Minister thinks
fit.
28. (1) Where a person who is not a citizen of Sri Lanka Rights of persons
is arrested for an offence under this Act, such person shall be arrested under
entitled to communicate without delay with the nearest this Act.
appropriate representative of the State of which he is a
national or if he is a stateless person, the nearest appropriate
representative of the State where he usually resides.
(2) A request under section 26 shall be deemed not to be
invalidated for the purposes of any legal proceedings by
reason of any failure to comply with the provisions of section
27, provided the Financial Intelligence Unit is satisfied that
there is sufficient compliance with those provisions to enable
it to properly execute the request.
29. (1) Where a person is arrested for an offence of Duty of Minister
money laundering, the Minister to whom the administration to inform other
States having
of this Act is assigned shall request the Minister in charge of
jurisdiction over
the subject of Foreign Affairs to inform the relevant authorities an offence.
in any other State which has made a request under section 26
in respect of such person, of the measures which the
Government of Sri Lanka has taken or proposes to take for
the prosecution or extradition of that person.
(2) Where a request is made to the Government of Sri
Lanka, by or on behalf of the Government of any State for the
extradition of any person accused or convicted of an offence
corresponding to the offence of money laundering, the
Minister in charge of the subject of Foreign Affairs shall, on
behalf of the Government of Sri Lanka, forthwith inform the
Government of the requesting State, of the measures which
the Government of Sri Lanka has taken, or proposes to take,
for the prosecution or extradition of that person.
(3) Where it is decided that no order should be made under
the Extradition Law, No. 8 of 1977, for the extradition of any
person accused or convicted of an offence corresponding to
16 Prevention of Money Laundering
Act, No. 5 of 2006
the offence of money laundering pursuant to a request for his
extradition made under that Law, by the Government of any
State, the case shall be submitted to the law enforcement
authorities, so that prosecution for the offence under the law
of Sri Lanka, or any other appropriate action may be
considered.
Requirements for 30. (1) A request for assistance under section 27 shall:—
assistance.
(a) confirm either that an investigation or prosecution
is being conducted into an offence under the law of
the requesting State corresponding to an offence of
money laundering or that a person has been
convicted of such an offence;
(b) state the grounds on which any person is being
investigated or prosecuted for such offence or give
details of the conviction of such person;
(c) give particulars sufficient to identify any person
referred to in the request;
(d) give particulars sufficient to identify an Institution
or other person believed to have information,
documents or material or thing relevant to the
investigation or prosecution referred to paragraph
(a) ;
(e) request the Authority to whom the request is
addressed to obtain from the Institution or other
person referred to in paragraph (d) all or any of the
information, documents or material or thing referred
to in paragraph (d);
(f) specify the manner in which and the person to whom,
any information, document, material or thing
obtained pursuant to the request, is to be transmitted;
(g) state whether or not an order of freezing or order of
Forfeiture required;
Prevention of Money Laundering 17
Act, No. 5 of 2006
(h) contain such other information as may assist the
execution of the request.
(2) The Financial Intelligence Unit shall cause to be
transmitted to the person referred to in paragraph (f) of
subsection (1) of this section, any information, document,
material or thing seized by, or delivered or produced to the
Financial Intelligence Unit, pursuant to an Order made in
accordance with the provisions of this Act.
31. Where there is an extradition arrangement in force Provision
between the Government of Sri Lanka and the Government regarding
extradition
of any other State, such arrangement shall be deemed, for the arrangement.
purposes of the Extradition Law, No. 8 of 1977, to include
provision for extradition in respect of the offence of money
laundering as defined in this Act, and of attempting or
conspiring to commit, aiding and abetting the commission
of, or conspiring to commit, such offence.
32. The Government shall afford such assistance Duty of
(including the supply of any relevant evidence at its disposal) Government to
afford assistance
to the relevant authorities of any foreign State as may be to other States.
necessary in connection with criminal proceedings instituted
in the State against any person, in respect of an offence under
the law of that State corresponding to the offence of money
laundering.
33. (1) The Minister may make regulations under this Regulations.
Act for any matter authorized or required to be made under
this Act, or for the purpose of carrying out or giving effect to
the principles and provisions of this Act.
(2) Every regulation made by the Minister shall be
published in the Gazette and shall come into operation on
the date of such publication or on such later date as may be
specified in the regulation.
18 Prevention of Money Laundering
Act, No. 5 of 2006
(3) Every regulation made by the Minister shall as soon
as convenient after its publication in the Gazette be brought
before Parliament for its approval. Any regulation which is
not so approved shall be deemed to be rescinded as from the
date of disapproval but without prejudice to anything
previously done thereunder.
(4) Notification of the date on which a regulation is
deemed to be rescinded shall be published in the Gazette.
Sinhala text 34. In the event of any inconsistency between the Sinhala
to prevail in and Tamil texts of this Act, the Sinhala text shall prevail.
case of
inconsistancy.
Interpretation. 35. In this Act unless the context otherwise requires—
“designated non-finance business” includes—
(a) individual and collective portfolio
management;
(b) investing administering or managing funds
or money on behalf of other person;
(c) safekeeping and administration of cash or
liquid securities on behalf of other persons;
(d) safe custody services;
(e) under – writing and placement of insurance,
as well as insurance intermediation by agents
and brokers;
(f) trustee administration or investment
management or a superannuation scheme;
(g) casinos, gambling houses or conducting of
a lottery, including a person who carries on
such a business through the internet when
their customers engage in financial
transactions equal to or above the prescribed
threshold;
Prevention of Money Laundering 19
Act, No. 5 of 2006
(h) real estate agents, when they are involved in
transactions for their clients in relation to
the buying and selling of real estate;
(i) dealers in precious metals and dealers in
precious and semi-precious stones, including
but not limited to metals and stones covered
by the Gem and Jewellery Act, No. 50 of
1993, when they engage in cash transactions
with a customer equal to or above the
prescribed threshold;
(j) lawyers, notaries, other independent legal
professionals and accountants when they
prepare for, or carry out, transactions for their
clients in relation to any of the following
activities:—
(i) buying and selling of real estate;
(ii) managing of client money, securities
or other assets;
(iii) management of bank, savings or
securities accounts;
(iv) organization of contributions for the
creation, operation or management
of companies; and
(v) creation, operation or management
of legal persons or arrangements and
the buying and selling of business
entities;
(k) a trust or company service provider not
otherwise covered by this definition, which
as a business provides one or more of the
following services to third parties:—
(i) formation or management of legal
persons;
20 Prevention of Money Laundering
Act, No. 5 of 2006
(ii) acting as or arranging for another
person to act as, a director or secretary
of a company, a partner of a
partnership or a similar position in
relation to other legal persons;
(iii) providing a registered office,
business address or accommodation,
correspondence or administrative
address for a company, a partnership
or for any other legal person or
arrangement;
(iv) acting as or arranging for another
person to act as, a trustee of an express
trust;
(v) acting as or arranging for another
person to act as, a nominee
shareholder for another person;
(l) offshore business in accordance with the
definitions provided for the same in other
written laws; and
(m) such other business as may be prescribed
from time to time by the Minister taking into
consideration the interests of the national
economy;
“Financial Intelligence Unit (FIU)” means the Financial
Intelligence Unit established under section of the
Financial Transactions Reporting Act, No. 6 of
2006;
“finance business” includes any one of the following
businesses or activities:—
(a) banking, as defined in the Banking Act, No.
30 of 1988, including the acceptance of
deposits or other repayable funds from
members of the public;
Prevention of Money Laundering 21
Act, No. 5 of 2006
(b) finance business as defined in the Finance
Companies Act, No. 78 of 1988 (irrespective
of whether the person is licensed or registered
under the Act);
(c) lending, including consumer credit,
mortgage credit, factoring (with or without
recourse) and financing of commercial
transactions;
(d) financial leasing other than transactions
relating to consumer products;
(e) the transfer of money or value;
(f) money and currency changing services;
(g) issuing and managing means of payment (i.e
credit cards, travellers’ cheques, money
orders and bankers’ drafts and electronic
money);
(h) issuing financial guarantees and
commitments, including but not limited to,
consumer credit, factoring with or without
recourse and financing of commercial
transactions including forfeiting;
(i) trading for its own account or for the account
of customers in money market instruments
(i.e. cheques, bills of exchange, certificates
of deposit and derivatives), foreign
exchange, exchange, interest rate and index
instruments, commodity futures trading and
transferable securities;
(j) participating in securities issues and the
provision of financial services related to
such issues; and
22 Prevention of Money Laundering
Act, No. 5 of 2006
(k) such other business as may be prescribed
from time to time by the Minister taking into
consideration the interests of the national
economy.
“Institution” means any person or body of persons
engaged in or carrying out any finance business or
designated non-finance business within the
meaning of this Act;
“Offshore Unit” means a unit or department of a
licensed commercial bank carrying on banking
business, subject to the provisions of Part IV of the
Banking Act, No. 30 of 1988, dealing with Offshore
Banking;
“person” includes a body of persons;
“property” means any currency, and includes any asset
of any kind, whether corporeal or incorporeal,
movable or immovable, tangible or intangible
whether situated in Sri Lanka or elsewhere, and
legal documents or instruments in any form
whatsoever including electronic or digital form,
evidencing title to, or interest in, such assets,
including but not limited to bank credits, travellers
cheques, bank cheques, money orders, shares,
securities, bonds, drafts, letters of credit and includes
any legal or equitable interest in any such property;
“transaction” means any activity connected with
finance business or designated non-finance
business;
“transaction” in relation to property includes—
(a) a purchase, sale, loan, charge, mortgage, lien,
pledge, transfer, delivery, assignment,
subrogation, transmission, gift, donation,
Prevention of Money Laundering 23
Act, No. 5 of 2006
creation of a trust, settlement, deposit
including any deposit of any article,
withdrawal, transfer between assets,
extension of credit;
(b) any agency or grant of power of attorney;
(c) any other disposition or dealing of property
in whatever form, or whatsoever description
or nature, howsoever described, which results
in any right, title, interest or privilege,
whether present or future, or whether vested
or contingent, in the whole or any part of
such property being conferred on any
person; and
“unlawful activity” means any act which constitutes
and offence under —
(a) the Poisons, Opium and Dangerous Drugs
Ordinance (Chapter 218);
(b) any law or regulation for the time being in
force relating to the prevention and
suppression of terrorism;
(c) the Bribery Act (Chapter 26);
(d) the Firearms Ordinance (Chapter 182), the
Explosives Ordinance (Chapter 183) or the
Offensive Weapons Act, No. 18 of 1966.
(e) the Exchange Control Act (Chapter 423);
(f) an offence under section 83C of the Banking
Act, No. 30 of 1988;
(g) any law for the time being in force relating
to transnational organised crime;
(h) any law for the time being in force relating
24 Prevention of Money Laundering
Act, No. 5 of 2006
to cyber crime;
(i) any law for the time being in force relating
to offences against children;
(j) any law for the time being in force relating
to offences connected with the trafficking
of persons; and
(k) an offence under any other law for the time
being in force which is punishable by death
or with imprisonment for a term of seven
years or more.

Prevention of Money Laundering 25
Act, No. 5 of 2006
Annual subscription of English Bills and Acts of the Parliament Rs. 885 (Local), Rs. 1,180
(Foreign), payable to the SUPERINTENDENT, GOVERNMENT PUBLICATIONS BUREAU, NO. 32, TRANSWORKS
HOUSE, LOTUS ROAD, COLOMBO 01 before 15th December each year in respect of the year following.
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