The Hon. R.M. Jayawardhana - Deputy Minister of Trade, Commerce and Food Security

¶ 01 Hon. Deputy Chairperson of Committees, we debate amendments to the Companies Act. Company registration falls under our Ministry. Before registration, we must verify information and ensure proper procedures.

¶ 02 Worldwide, new trends have increased fraud, corruption and illicit wealth. Those who gain from such means struggle to hide funds and resort to money laundering. A second pathway seen recently is financing terrorism, and using such funds again for terror activities. Both are grave challenges for national development.

¶ 03 Many countries have agreed, through international bodies, on standards—40 main FATF Recommendations. Sri Lanka implements 39; Recommendation 24 had been long neglected since discussions in 1989. We must ask why. With the 1977 open economy, by 1989 many illicit avenues had opened. Illicit earners sought to re-inject funds through ostensibly lawful companies, gaining legitimacy through registration and engaging in transactions that may include unlawful dealings, often without traceability.

¶ 04 Through this amendment, when a company registers in Sri Lanka, we aim to establish—from top to bottom—who owns, who benefits, who controls, and the connected external parties. Some fear investors will stay away. But global acceptance today depends on political and regulatory stability and transparency. Investors assess these. We believe these reforms will not deter investors; rather, they will encourage them.

¶ 05 After incorporation, companies issue shares to raise capital; investors across the country subscribe after assessing transparency and legality. This Bill strengthens that environment.

¶ 06 On the ROC website outage raised by Hon. Ajith P. Perera, we are aware. The service had been run by a company; during transition back to the Ministry, issues arose. We are still investigating whether it was due to the previous company’s actions or transition errors. Though the site was inactive for about 10 days, it has now been rectified.

¶ 07 Some will be fearful—those who set up multiple entities to recycle illicit funds. But at this important juncture, we must proceed. We expect broad support to implement these reforms to block money laundering via companies and prevent terror financing.

¶ 08 Thank you.