PREVENTION OF MONEY LAUNDERING ACT

Arrangement of Sections

1. Short title

2. Applicability of the provisions of the Act.

PART I

MONEY LAUNDERING

3. Offence of money laundering.

4. Presumption.

5. Duty of certain persons to disclose knowledge or belief of acts constituting the offence of money laundering.

6. Divulging of information an offence.

PART II

FREEZING AND FORFEITURE OF ASSETS IN RELATION TO THE OFFENCE OF MONEY LAUNDERING

7. Freezing of property.

8. Confirming of Freezing Order by Court.

9. Transactions in contravention of the Freezing Order to be null and void.

10. High Court to sanction essential and legitimate transactions.

11. Appointment of a Receiver.

12. Property tracking and monitoring.

13. Forfeiture of property in relation to which offence of money laundering has been committed.

14. Restoring the rights of bona fide claimants.

15. Appointment of a Receiver upon forfeiture.

16. Secrecy obligation overridden.

PART III

GENERAL

17. Offences under this Act to be cognizable and non-bailable.

18. Offences by body of persons.

19. Protection for action taken under this Act or on direction of Authority.

20. Offences.

21. Repealed

22. Asset sharing.

23. Dealing with property by Institution not to constitute an offence.

PART IV

PROVISIONS RELATING TO EXTRADITION AND MUTUAL ASSISTANCE IN RELATION TO THE OFFENCE OF MONEY LAUNDERING.

24. Amendment of the Extradition Law, No. 8 of 1977.

25. Interpretation in relation to the Extradition Law.

26. Duty of Minister to notify requesting State of measures taken against persons for whose extradition a request is made.

27. Assistance to Commonwealth countries.

28. Rights of persons arrested under this Act.

29. Duty of Minister to inform other States having jurisdiction over an offence.

30. Requirements for assistance.

31. Provision regarding extradition arrangement.

32. Duty of Government to afford assistance to other States.

33. Regulations.

34. Sinhala text to prevail in case of inconsistency.

35. Interpretation.

5 of 2006,

40 of 2011.

AN ACT to prohibit money laundering in Sri Lanka; to provide the necessary measures to combat and prevent money laundering; and to provide for matters connected therewith or incidental thereto.

[Date of Commencement 6th March, 2006 ]

1. Short title

This Act may be cited as the Prevention of Money Laundering Act.

2. Applicability of the provisions of the Act.

The provisions of the Act shall apply in relation to—

(a) a person who commits an offence under the provisions of this Act whilst in Sri Lanka;

[S 2(a) am by s 2 of Act 40 of 2011.]

(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. Offence of money laundering.

(1) Any person, who—

(a) engages directly or indirectly in any transaction in relation to any property which is derived or realised, 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 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.

[S 3(1) am by s 3(1) of Act 40 of 2011.]

(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.

[S 3(1A) ins by s 3(2) of Act 40 of 2011.]

(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 of the unlawful activity shall not be necessary for the proof of the offence under the provisions of this Act.

[S 3(3) am by s 3(3) of Act 40 of 2011.]

4. Presumption.

For the purposes of any proceedings under this Act, it 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. Duty of certain persons to disclose knowledge or belief of acts constituting the offence of money laundering.

(1) Any person who knows or has reason to believe from information or other matter obtained by him in the course of any trade, profession, business or employment carried on by such person, that any property has been derived or realised from any unlawful activity, shall disclose his knowledge or belief as soon as is practicable, to the Financial Intelligence Unit.

(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.

(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 realised 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.

6. Divulging of information an offences.

Any person who knows or has reason to believe that an investigation into the commission of the offence of money 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, 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 one hundred thousand rupees or to imprisonment of either description for a period not exceeding twelve months, or to both such fine and imprisonment,

[S 6 am by s 4 of Act 40 of 2011.]

PART II

FREEZING AND FORFEITURE OF ASSETS IN RELATION TO THE OFFENCE OF MONEY LAUNDERING

7. Freezing of property.

(1) A Police Officer not below the rank of 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.

(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.

[S 7 am by s 5 of Act 40 of 2011.]

8. Confirming of Freezing Order by Court.

(1) The Police Officer issuing the Freezing Order under the provisions of section 7 shall, with in the seven days during which such Order shall be in force, make an ex parte 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.

[S 8(1) am by s 6(1) of Act 40 of 2011.]

(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 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:

[S 8(2)(b) subs by s 6(2)(i) of Act 40 of 2011.]

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