The Hon. Ananda Wijepala - Minister of Public Security and Parliamentary Affairs

¶ 01 Hon. Speaker, I present the following Ministerial Statement on behalf of the Minister of Defence.

¶ 02 Over recent months, through investigations by the Sri Lanka Police (Criminal Investigation Department and Financial Crimes Investigation Division) and Sri Lanka Customs, it has been revealed that large amounts of dollars have been taken out of the country under the pretense of importing goods. I wish to make a special statement to the House.

¶ 03 For a long time, we have told the public that behind various rackets and frauds there exists a criminal network involving certain politicians, officials, and fraudsters. Since assuming office a year and a half ago, we have moved to change this situation and stabilize the bankrupt economy through strict financial discipline and management. President Hon. Anura Kumara Dissanayake has played a significant role in financial stabilization. Investigating financial frauds and irregularities is crucial. Based on information uncovered, investigations are underway. Police and Customs have found that large amounts of US dollars have been illegally remitted abroad by racketeers.

¶ 04 Modus operandi: multiple companies were registered, purporting to import goods. Funds were sent abroad via telegraphic transfers (TT) ostensibly for imports, but no goods were ever brought in.

¶ 05 Three cases:

¶ 06 1) On 22 October last year, Kelaniya Division officers checked a suspicious three-wheeler in Peliyagoda and found Rs. 30 million. Two suspects were arrested; four more were later arrested. The funds were suspected to be proceeds of crime. The IGP referred the case to the newly established Central Crimes Investigation Unit. It was confirmed that Next Gen (Pvt.) Ltd. had provided these funds for banking. This company made 953 TT transactions totaling Rs. 12.89 billion to 256 companies in 26 countries—USD 42.7 million—without importing any goods. The company, registered on 02.07.2025 with a single director/shareholder, conducted no lawful business. It is also linked to the recent Rs. 13 billion NDB financial fraud. Accounts at People’s Bank (Kolonnawa) and Sampath Bank (Wellampitiya) have been frozen; investigations continue.

¶ 07 2) On 15 February 2026, Negombo Police arrested four persons with heroin. Payments for heroin were deposited into a Commercial Bank account in Divulapitiya, operated online from Dubai. Funds were transferred to a Commercial Bank account in Pettah belonging to AY Investment, which held Rs. 2.2 billion; the account was opened on 09.09.2024. Within two to three days, funds were withdrawn via cheques and then transferred to four mobile accounts at Union Bank, Pettah. From these four accounts, Rs. 130 billion (noting OCR ambiguity: context indicates very large sums) was remitted abroad via TT between 30.10.2025 and 04.03.2026. Payments were ostensibly for hardware, bathroom fittings, or jewellery to 108 countries, but no goods were imported and none of the named companies were registered with Sri Lanka Customs. In this short period, USD 42.7 million (first case) and tens of millions more in this second case were sent out. Remaining balances (about Rs. 5.5 million) were seized. Investigations on proceeds of crime are ongoing.

¶ 08 3) For the period 01.01.2023 to 30.09.2025, Sri Lanka Customs complained to Police that large sums were remitted abroad under the guise of imports, with no goods arriving. There were 26,108 TT transactions via 227 accounts at 13 banks. This severely impacts economic stability. 105 domestic companies are implicated. Only about 55 individuals served as secretaries and directors across these companies; the same group repeatedly changed company names, placed TTs for purported imports, then closed entities and opened new ones. Similar patterns were found at Union Bank; on one day, 14 TT transactions were made—raising concerns about certain officers’ responsibilities, which are under investigation. We are currently probing 2023–present, but earlier periods also show similar patterns and will be examined.

¶ 09 Process gaps: After a TT for imports, banks must notify Customs and the Central Bank. If no goods are imported within 180 days, Customs must notify BOI (for BOI firms), the Controller of Imports & Exports, or the Central Bank (for others). Though gazetted, this process was not followed over time. Many companies were not genuine businesses and were shut within months. Fake or proxy businesspersons registered companies to conduct these rackets.

¶ 10 President convened meetings on 03 and 05 June with the Ministers and heads of Finance, Customs, Foreign Exchange, Registrar of Companies, Immigration, and Police to take immediate steps. Decisions: - Any entity importing goods must also be registered with Sri Lanka Customs (in addition to the Registrar of Companies) with immediate effect. - Use of TIN is mandatory for importers.

¶ 11 Further, amendments are being pursued to restore the applicability of money laundering laws to foreign exchange control violations. In 2017, with amendments to the Foreign Exchange Act, exchange control offences were removed from the schedule of predicate offences under the Prevention of Money Laundering Act, No. 5 of 2006. This contributed to the current situation. The President has instructed the Secretary to the Treasury to urgently amend the relevant regulations so that forex control violations can again be investigated under money laundering provisions.

¶ 12 Illicit outflows and laundering of drug proceeds through such channels seriously harm the economy. Although investigations have now commenced for 2023 onwards, there was no such effort earlier; we will examine pre-2023 cases too.

¶ 13 While Government strives to attract investment, such activities threaten economic stability. A small group has benefited from these unlawful acts. We will enforce the law strictly and take all necessary legal measures. Thank you, Hon. Speaker.