President Anura Kumara Dissanayake has delivered a decisive ultimatum to state institutions, emphasizing that “good governance” must be established domestically before being showcased internationally. Speaking at a meeting held at the Presidential Secretariat on Tuesday, President Dissanayake addressed the nation’s key financial and security officials, urging preparation for a critical international audit pivotal to Sri Lanka’s economic recovery.
Sri Lanka is preparing for its third mutual evaluation in March by the Asia Pacific Group on Money Laundering (APG), an affiliate of the global watchdog, the Financial Action Task Force (FATF). Initially scheduled for last year, the evaluation was postponed due to the 2024 elections and will now scrutinize Sri Lanka’s anti-money laundering and counter-terrorism financing (AML/CFT) frameworks thoroughly starting next month.
President Dissanayake, as reported by the President Media Division (PMD), stated, “Before demonstrating our integrity to external entities, we, as a government, must first take responsibility for our actions and dedicate ourselves to good governance. We invite all stakeholders to properly and responsibly fulfill their institutional duties toward this objective.”
Unlike previous evaluations, the 2026 assessment will employ a revised “Effectiveness” methodology, requiring Sri Lanka not only to have laws in place but also to demonstrate their effectiveness in combating criminal activities.
The urgency of the President’s meeting is underscored by Sri Lanka’s history of being grey-listed twice before, first in 2011 and then again in 2017. These listings led to a collapse in correspondent banking relationships, increased borrowing costs, and a significant downgrade in the country’s sovereign credit ratings, challenges that continue to impact the nation following its 2022 economic crisis.
Addressing a “problematic situation” where single officers were handling multiple roles, President Dissanayake ordered an immediate recruitment drive to strengthen the Financial Intelligence Unit (FIU) and other relevant agencies. To avoid setbacks, he also mandated a special circular to freeze the rotation of trained officers until the audit concludes in November.
Analysts warn that Sri Lanka cannot afford to be grey-listed again, as a third failure would undermine investor confidence and hinder the inflow of foreign direct investment crucial for the country’s recovery. A Special Task Force has been given a two-week deadline to submit a progress report on institutional readiness.
(Colombo/February 03/2026)
